Stifel Financial : 2020 2nd Quarter Earnings

July 29, 2020

FOR IMMEDIATE RELEASE

Media Contact: Neil Shapiro [phone]

Investor Contact: Joel Jeffrey [phone]

www.stifel.com/investor-relations

STIFEL REPORTS SECOND QUARTER 2020 RESULTS

• Net revenues of $895.8 million, increased 11.9% with the year-ago quarter, were the Company's third highest quarterly net revenues.
• Record Institutional Group net revenues and fixed income brokerage revenues.
• Net income available to common shareholders of $103.0 million, or $1.39 per diluted common share.
• Non-GAAPnet income available to common shareholders of $115.3 million, or $1.55 per diluted common share.
• Annualized return on average tangible common shareholders' equity (1) was 20.7%.
• Non-GAAPannualized return on average tangible common shareholders' equity (1) was 23.2%.

ST. LOUIS, MO - Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $103.0 million, or $1.39 per diluted common share on net revenues of $895.8 million for the three months ended June 30, 2020, compared with net income available to common shareholders of $103.8 million, or $1.31 per diluted common share, on net revenues of $800.8 million for the second quarter of 2019.

For the three months ended June 30, 2020, the Company reported non-GAAP net income available to common shareholders of $115.3 million, or $1.55 per diluted common share. The Company's reported GAAP net income for the three months ended June 30, 2020 was primarily impacted by merger-related expenses. Details discussed below and in the "Non-GAAP Financial Matters" section.

Chairman's Comments

"The benefits of the investments we have made in our business were again evident in our second quarter results. Net revenue and earnings per share were the third highest in our history. Our Institutional Group had a record quarter led by record fixed income brokerage revenue as well as strong investment banking results primarily from robust capital raising activity in both fixed income and equity. This helped to counter the impact of the market sell off in the first quarter and the zero rate environment had on revenue lines such as asset management and net interest income, respectively. In terms of the future, I remain cautiously optimistic. We enter the third quarter, with a strong and liquid balance sheet, our strongest capital ratios in nearly four years, and a solid and improving recruiting pipeline. While the economic outlook for the second half of the year remains unclear, I believe that the performance of our diversified financial services model will remain strong," stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

Financial Highlights (Unaudited)										Three Months Ended
																					Non-			Non-
			GAAP		GAAP	%				GAAP	%				GAAP (2)		GAAP (2)	%
($ in 000s, except per share data)	6/30/20		6/30/19		Change	3/31/20		Change	6/30/20		6/30/19		Change
Net revenues		$	895,817		$	800,787			11.9			$	913,034			(1.9	)			$	895,817			$	800,787			11.9
Net income applicable to Stifel Financial Corp.		$	107,887		$	109,085			(1.1	)		$	86,589			24.6				$	120,178			$	116,659			3.0
Preferred dividends			4,843			5,288			(8.4	)			4,844			(0.0	)				4,843				5,288			(8.4	)
Net income available to common shareholders		$	103,044		$	103,797			(0.7	)		$	81,745		26.1			$	115,335		$	111,371		3.6
Earnings per diluted common share		$	1.45		$	1.38			5.1			$	1.13			28.3				$	1.62			$	1.48			9.5
Earnings per diluted common share available to		$	1.39																	$	1.55
common shareholders			$	1.31			6.1			$	1.07			29.9						$	1.41			9.9
Compensation ratio			61.1%		58.3%						63.2	%							60.0	%			57.9	%
Non-compensation ratio			22.9%		23.2%						24.2	%							22.2	%			22.3	%
Pre-tax operating margin (3)			16.0%		18.5%						12.6	%							17.8	%			19.8	%

1

For the six months ended June 30, 2020, the Company reported net income available to common shareholders of $184.8 million, or $2.44 per diluted common share on record net revenues of $1.8 billion, compared with net income available to common shareholders of $200.7 million, or $2.53 per diluted common share, on net revenues of $1.6 billion for the six months ended June 30, 2019.

For the six months ended June 30, 2020, the Company reported non-GAAP net income available to common shareholders of $207.3 million, or $2.74 per diluted common share.

Financial Highlights (Unaudited)									Six Months Ended
															Non-			Non-
			GAAP			GAAP	%			GAAP (2)		GAAP (2)	%
($ in 000s, except per share data)		6/30/20				6/30/19			Change			6/30/20				6/30/19		Change
Net revenues		$	1,808,851			$	1,571,207				15.1			$	1,809,030			$	1,571,207			15.1
Net income applicable to Stifel Financial Corp.	$	194,476		$	208,292		(6.6)	$	216,955		$	223,523		(2.9)
Preferred dividends			9,687				7,632				26.9				9,687				7,632			26.9
Net income available to common shareholders	$	184,789		$	200,660		(7.9)	$	207,268		$	215,891		(4.0)
Earnings per diluted common share		$	2.57			$	2.63				(2.3	)		$	2.87			$	2.82			1.8
Earnings per diluted common share available to common		$	2.44										$	2.74
shareholders				$	2.53				(3.6	)		$	2.73		0.4
Compensation ratio			62.2	%			58.9%							61.3%			58.4%
Non-compensation ratio			23.5	%			22.9	%							22.8%			22.2	%
Pre-tax operating margin (4)			14.3	%			18.2%							15.9%			19.4%

Net Revenues

Net revenues were $895.8 million for the second quarter of 2020, an 11.9% increase from the second quarter of 2019 and a 1.9% decrease from the first quarter of 2020. Net revenues, compared with the second quarter of 2019, reflected significantly higher brokerage revenues, increased capital raising revenues, and advisory fee revenues, partially offset by lower net interest income and asset management and service fees. Net revenues, compared with the first quarter of 2020, reflected increased advisory fee revenues, principal transaction fee revenues, and capital raising revenues, partially offset by lower net interest income, asset management and service fees, and commission revenues.

The operating environment continued to be impacted by the spread of the COVID-19 virus which caused a sharp contraction in global economic activity and increased market volatility. Economic indicators generally improved as the quarter progressed, following significant declines in March and April, as economies began to reopen and central banks, along with governments, continued to implement monetary easing measures and provide fiscal stimulus to support the economy. These contributed to higher global equity prices and tighter credit spreads compared with the end of the first quarter of 2020.

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $343.0 million, a 31.2% increase compared with the second quarter of 2019 and a 1.9% decrease compared with the first quarter of 2020.

($ in 000s)						Three Months Ended
	6/30/20				6/30/19				% Change					3/31/20			% Change
Global Wealth Management			$	159,123		$	162,388				(2.0	)			$	179,879			(11.5	)
Institutional brokerage:
Equity capital markets				63,193				40,670				55.4					70,195			(10.0	)
Fixed income capital markets		120,731				58,387	106.8					99,688			21.1
Total institutional brokerage				183,924				99,057				85.7					169,883			8.3
Total brokerage revenues (5)		$	343,047			$	261,445			31.2				$	349,762			(1.9	)

• Global Wealth Management brokerage revenues were $159.1 million, a 2.0% decrease compared with the second quarter of 2019 and an 11.5% decrease compared with the first quarter of 2020.
• Institutional equity brokerage revenues were $63.2 million, a 55.4% increase compared with the second quarter of 2019 and a 10.0% decrease compared with the first quarter of 2020.
• Institutional fixed income brokerage revenues were $120.7 million, a 106.8% increase compared with the second quarter of 2019 and a 21.1% increase compared with the first quarter of 2020.

2

Investment Banking Revenues

Investment banking revenues were $217.0 million, a 20.8% increase compared with the second quarter of 2019 and a 20.9% increase compared with the first quarter of 2020.

($ in 000s)					Three Months Ended
	6/30/20			6/30/19			% Change		3/31/20			% Change
Capital raising:
Global Wealth Management			$	8,016		$	10,559			(24.1	)	$	10,314			(22.3	)
Equity capital markets		63,277			59,156	7.0			60,195	5.1
Fixed income capital markets				47,904			26,997			77.4			32,887			45.7
Institutional Group		111,181			86,153			29.1			93,082			19.4
Total capital raising (5)				119,197			96,712			23.2			103,396			15.3
Advisory fees (5)		97,838			82,905	18.0			76,072	28.6
Total investment banking			$	217,035		$	179,617			20.8		$	179,468			20.9

• Global Wealth Management capital raising revenues were $8.0 million, a 24.1% decrease compared with the second quarter of 2019 and a 22.3% decrease compared with the first quarter of 2020.
• Institutional equity capital raising revenues were $63.3 million, a 7.0% increase compared with the second quarter of 2019 and a 5.1% increase compared with the first quarter of 2020.
• Institutional fixed income capital raising revenues were $47.9 million, a 77.4% increase compared with the second quarter of 2019 and a 45.7% increase compared with the first quarter of 2020.
• Advisory fee revenues were $97.8 million, an 18.0% increase compared with the second quarter of 2019 and a 28.6% increase compared with the first quarter of 2020.

Asset Management and Service Fee Revenues

Asset management and service fee revenues were $198.9 million, a 5.8% decrease compared with the second quarter of 2019 and a 16.3% decrease compared with the first quarter of 2020. The decrease from the comparative period in 2019 is primarily attributable to lower asset values at the beginning of the second quarter of 2020, partially offset by fee-based asset flows. See Asset Management and Service Fee Break-down table.

Net Interest Income

Net interest income of $115.3 million, a 14.6% decrease compared with the second quarter of 2019 and a 15.7% decrease compared with the first quarter of 2020. See Net Interest Income Analysis table.

• Interest income was $128.4 million, a 31.7% decrease compared with the second quarter of 2019 and a 20.4% decrease compared with the first quarter of 2020.
• Interest expense was $13.1 million, a 75.3% decrease compared with the second quarter of 2019 and a 46.3% decrease compared with the first quarter of 2020.

3

Compensation and Benefits Expenses

For the quarter ended June 30, 2020, compensation and benefits expenses were $547.2 million, which included $9.7 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $466.9 million in the second quarter of 2019 and $577.2 million in the first quarter of 2020. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 60.0% in the second quarter of 2020 (non-GAAP measure).

The increase in compensation and benefits expenses, compared with the second quarter of 2019, is primarily attributable to higher volume and revenue-related expense and investments.

($ in 000s)		Three Months Ended		Six Months Ended
	6/30/20			6/30/19			6/30/20			6/30/19
GAAP compensation and benefits		$	547,174		$	466,861		$	1,124,353		$	924,975
As a percentage of net revenues		61.1%		58.3%		62.2%		58.9%
Non-GAAP adjustments: (6)
Merger-related and severance		(9,710)		(3,304)		(16,137)		(7,236)
Non-GAAP compensation and benefits		$	537,464		$	463,557		$	1,108,216		$	917,739
As a percentage of non-GAAP net revenues		60.0%		57.9%		61.3%		58.4%

Non-Compensation Operating Expenses

For the quarter ended June 30, 2020, non-compensation operating expenses were $205.7 million, which included $6.5 million of merger-related expenses (non-GAAP adjustments). This compares with $185.9 million in the second quarter of 2019 and $220.7 million in the first quarter of 2020. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended June 30, 2020 were 22.2% (non-GAAP measure).

The increase in non-compensation operating expenses, compared with the second quarter of 2019, is primarily attributable to the increase in the provision for credit losses as a result of the impact of COVID-19 on the broader economic environment, volume- related expenses, net provisions for regulatory matters, and professional fees, partially offset by decreases in travel and conference- related expenses as a result of COVID-19. In addition, the second quarter of 2020 included provisions related to growth in loans and the impact of accounting for credit losses under the CECL standard (7).

($ in 000s)		Three Months Ended		Six Months Ended
	6/30/20				6/30/19			6/30/20				6/30/19
GAAP non-compensation expenses		$	205,683			$	185,944		$	426,432			$	360,441
As a percentage of net revenues		22.9%			23.2%		23.5%			22.9%
Non-GAAP adjustments: (6)
Merger-related		(6,549)			(3,417)		(13,453)			(7,676)
Litigation-related			-				(3,507)			-				(3,507)
			(6,549)			(6,924)		(13,453)			(11,183)
Non-GAAPnon-compensation expenses		$	199,134			$	179,020		$	412,979			$	349,258
As a percentage of non-GAAP net revenues		22.2%			22.3%		22.8%			22.2%

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended June 30, 2020 was 24.5%. This compares with an effective income tax rate of 25.9% for the second quarter of 2019 and 24.8% for the first quarter of 2020. The adjusted non-GAAP effective income tax rate for the quarter ended June 30, 2020 was 24.5%.

($ in 000s)		Three Months Ended		Six Months Ended
	6/30/20			6/30/19			6/30/20			6/30/19
GAAP provision for income taxes		$	35,073		$	38,225		$	63,590		$	76,595
GAAP effective tax rate			24.5	%		25.9%		24.6	%		26.9%
Non-GAAP adjustments: (6)
Merger-related,litigation-related, and severance			3,986			2,752			7,286			4,955
Other			(18	)		(98	)		4			(1,767)
			3,968			2,654			7,290			3,188
Non-GAAP provision for income taxes		$	39,041		$	40,879		$	70,880		$	79,783
Non-GAAP effective tax rate		24.5%		25.9%		24.6%		26.3%

4

Conference Call Information

Stifel Financial Corp. will host its first quarter 2020 financial results conference call on Wednesday, July 29, 2020, at 9:30 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 2565812. 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, including its Eaton Partners business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Century Securities Associates, Inc. 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 website at www.stifel.com. For global disclosures, please visit www.stifel.com/investor-relations/press-releases.

Cautionary Note Regarding 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. For information about the risks and important factors that could affect the Company's future results, financial condition and liquidity, see "Risk Factors" in Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2020 and "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Forward-looking statements speak only as to the date they are made. The Company 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.

Statements about the effects of the COVID-19 pandemic on the Company's business, results, financial position and liquidity may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected.

5

		Summary Results of Operations (Unaudited)
					Three Months Ended								Six Months Ended
		6/30/20				%					%				6/30/20				%
($ in 000s, except per share amounts)				6/30/19		Change		3/31/20			Change					6/30/19		Change
Revenues:
Commissions	$	177,028		$	164,981		7.3		$	211,098			(16.1	)	$	388,126		$	320,430		21.1
Principal transactions		166,017			96,464		72.1			138,666			19.7				304,683			200,496		52.0
Brokerage revenues		343,045			261,445		31.2			349,764			(1.9	)			692,809			520,926		33.0
Advisory fees		97,838			82,911		18.0			76,072			28.6				173,910			187,801		(7.4	)
Capital raising		119,197			96,706		23.3			103,396			15.3				222,593			153,656		44.9
Investment banking		217,035			179,617		20.8			179,468			20.9				396,503			341,457		16.1
Asset management and service fees		198,939			211,171		(5.8	)		237,775			(16.3	)			436,714			406,438		7.4
Other income		21,514			13,505	59.3			9,207		133.7				30,721			25,714	19.5
Operating revenues		780,533			665,738		17.2			776,214			0.6				1,556,747			1,294,535		20.3
Interest revenue		128,368			187,940	(31.7)		161,177		(20.4)			289,545			379,011	(23.6)
Total revenues		908,901			853,678		6.5			937,391			(3.0	)			1,846,292			1,673,546		10.3
Interest expense		13,084			52,891	(75.3)		24,357		(46.3)			37,441			102,339	(63.4)
Net revenues		895,817			800,787		11.9			913,034			(1.9	)			1,808,851			1,571,207		15.1
Non-interest expenses:
Compensation and benefits		547,174			466,861		17.2			577,179			(5.2	)			1,124,353			924,975		21.6
Occupancy and equipment rental		66,264			61,055		8.5			66,073			0.3				132,337			119,917		10.4
Communication and office supplies		43,046			35,069		22.7			41,124			4.7				84,170			70,766		18.9
Commissions and floor brokerage		15,177			11,008		37.9			14,842			2.3				30,019			21,964		36.7
Provision for credit losses		19,210			2,353		716.4			16,068			19.6				35,278			4,636		661.0
Other operating expenses		61,986			76,459		(18.9	)		82,642			(25.0	)			144,628			143,158		1.0
Total non-interest expenses		752,857			652,805		15.3			797,928			(5.6	)			1,550,785			1,285,416		20.6
Income before income taxes		142,960			147,982		(3.4	)		115,106			24.2				258,066			285,791		(9.7	)
Provision for income taxes		35,073			38,225		(8.2	)		28,517			23.0				63,590			76,595		(17.0	)
Net income		107,887			109,757		(1.7	)		86,589			24.6				194,476			209,196		(7.0	)
Net income applicable to non-controlling		-
interests				672		n/m		-		-			-			904		n/m
Net income applicable to Stifel
Financial Corp.		107,887			109,085		(1.1	)		86,589			24.6				194,476			208,292		(6.6	)
Preferred dividends		4,843			5,288	(8.4)		4,844		(0.0)			9,687			7,632	26.9
Net income available to common
shareholders	$	103,044		$	103,797		(0.7	)	$	81,745			26.1		$	184,789		$	200,660		(7.9	)
Earnings per common share:
Basic	$	1.46		$	1.43		2.1		$	1.15			27.0		$	2.61		$	2.74		(4.7	)
Diluted	$	1.39		$	1.31		6.1		$	1.07			29.9		$	2.44		$	2.53		(3.6	)
Cash dividends declared per common
share	$	0.17		$	0.15		13.3		$	0.17			-		$	0.34		$	0.30		13.3
Weighted average number of common
shares outstanding:
Basic		70,527			72,519		(2.7	)		71,286			(1.1	)			70,905			73,180		(3.1	)
Diluted		74,387			79,079		(5.9	)		76,619			(2.9	)			75,651			79,160		(4.4	)

6

	Summary Segment Results (Unaudited)
		Three Months Ended		Six Months Ended
	6/30/20		%		%			%
($ in 000s)	6/30/19	Change	3/31/20	Change	6/30/20	6/30/19	Change
Net revenues:	$ 505,782					$1,088,738
Global Wealth Management	$ 532,433	(5.0)	$ 582,956	(13.2)	$1,043,043	4.4
Institutional Group	398,096	270,602	47.1	332,238	19.8	730,334	531,888	37.3
Other	(8,061)	(2,248)	n/m	(2,160)	n/m	(10,221)	(3,724)	n/m
Total net revenues	$ 895,817	$ 800,787	11.9	$ 913,034	(1.9)	$1,808,851	$1,571,207	15.1

Operating expenses:	$ 349,457					$	738,246
Global Wealth Management	$ 340,081	2.8	$ 388,789	(10.1)	$	656,201	12.5
Institutional Group	315,047	231,300	36.2	290,498	8.5		605,545		460,382	31.5
Other	88,353	81,424	8.5	118,641	(25.5)		206,994		168,833	22.6
Total operating expenses	$ 752,857	$ 652,805	15.3	$ 797,928	(5.6)	$	1,550,785	$	1,285,416	20.6

Operating contribution:	$ 156,325					$	350,492
Global Wealth Management	$ 192,352	(18.7)	$ 194,167	(19.5)	$	386,842	(9.4)
Institutional Group	83,049	39,302	111.3	41,740	99.0		124,789		71,506	74.5
Other	(96,414)	(83,672)	15.2	(120,801)	(20.2)		(217,215)		(172,557)	25.9
Income before income taxes	$ 142,960	$ 147,982	(3.4)	$ 115,106	24.2	$	258,066	$	285,791	(9.7)

As a percentage of net revenues:
Compensation and benefits
Global Wealth Management	51.1	49.3	51.2	51.1	48.9
Institutional Group	60.6	57.6	62.0	61.3	59.3
Non-comp. operating expenses	18.0			16.7
Global Wealth Management	14.6	15.5	14.0
Institutional Group	18.5	27.9	25.4	21.6	27.3
Income before income taxes	30.9			32.2
Global Wealth Management	36.1	33.3	37.1
Institutional Group	20.9	14.5	12.6	17.1	13.4
Consolidated pre-tax margin	16.0	18.5	12.6	14.3	18.2

7

Financial metrics (unaudited):		As of and For the Three Months Ended
($ in 000s, except percentages and per share amounts)		6/30/20			6/30/19		3/31/20
Total assets	$	25,624,225		$	24,343,597	$	25,896,006
Total Stifel Financial shareholders' equity	$	3,884,060		$	3,429,126	$	3,470,326
Book value per common share (8)	$	48.84	$	44.68	$	46.13

Return on common equity (9)	12.6	%	13.4	%	10.0	%
Non-GAAP return on common equity (2) (9)	14.1	%	14.3	%	11.2	%
Return on tangible common equity (1)	20.7	%	21.1	%	16.6	%
Non-GAAP return on tangible common equity (1) (2)	23.2	%	22.6	%	18.6	%
Tier 1 common capital ratio (10)	15.3	%	15.6	%	14.3	%
Tier 1 risk based capital ratio (10)	19.3	%	18.0	%	16.6	%
Tier 1 leverage capital ratio (10)	11.0	%	10.0	%	9.6	%
Pre-tax margin on net revenues	16.0	%	18.5	%	12.6	%
Non-GAAPpre-tax margin on net revenues (2) (3)	17.8	%	19.8	%	14.1	%
Effective tax rate	24.5	%	25.9	%	24.8	%
Non-GAAP effective tax rate (2)	24.5	%	25.9	%	24.8	%

Statistical Information (unaudited):													As of and For the Three Months Ended
($ in 000s, except financial advisors and locations)					6/30/20							6/30/19						% Change				3/31/20							% Change
Financial advisors					2,138							2,097						2.0						2,130						0.4
Independent contractors					94							96			(2.1)					94						-
Total financial advisors					2,232							2,193						1.8						2,224						0.4
Locations					447							413			8.2						447						-
Total client assets			$	306,235,000					$	305,233,000						0.3			$			276,627,000						10.7
Fee-based client assets	$	106,218,000				$	103,824,000			2.3			$			93,633,000		13.4
Client money market and insured product			$	18,664,000					$	13,674,000						36.5			$			17,234,000						8.3
Secured client lending (11)	$	2,563,773				$	3,251,723			(21.2)		$			3,148,790		(18.6)
Asset Management and Service Fee Revenues:					Asset Management and Service Fee Break-down (unaudited)
													Three Months Ended
($ in 000s)					6/30/20							6/30/19							% Change				3/31/20							% Change
Private Client Group (12)			$		164,403					$		164,554						(0.1	)			$	193,260						(14.9	)
Asset Management					23,769							29,485						(19.4)				29,762			(20.1)
Third-party Bank Sweep Program						522								6,869						(92.4	)				3,308						(84.2	)
Other (13)					10,245							10,263			(0.2)				11,445			(10.5)
Total asset management and service fee revenues			$		198,939					$		211,171						(5.8	)			$	237,775						(16.3	)
Fee-based Assets:														Three Months Ended
($ in millions)					6/30/20							6/30/19							% Change				3/31/20							% Change
Private Client Group (12)			$		91,360						$		80,983						12.8				$	80,617						13.3
Asset Management						25,706								33,156						(22.5	)				22,752						13.0
Elimination (14)						(10,848	)						(10,315	)					5.2					(9,736	)					11.4
Total fee-based assets		$		106,218					$	103,824						2.3			$	93,633				13.4
Individual Program Banks	$		3,007				$	1,459		106.1		$	1,491			101.7
ROA (bps) (15)
Private Client Group (12)						81.6								89.5												83.9
Asset Management						37.0								35.6												38.0
Individual Program Banks						7.1								163.6												95.0

8

Consolidated Net Interest Income Analysis (Unaudited):
												Three Months Ended
			June 30, 2020		June 30, 2019		March 31, 2020
						Interest	Average						Interest	Average						Interest	Average
		Average			Income/	Interest	Average			Income/	Interest	Average			Income/	Interest
($ in millions, except percentages)		Balance			Expense	Rate	Balance			Expense	Rate	Balance			Expense	Rate
Interest-earning assets:
Cash and federal funds sold	$	1,674.0			$	1.0		0.24	%	$	750.4			$	4.3		2.31	%	$	931.8			$	3.7		1.58	%
Financial instruments owned			761.7				2.9		1.50			1,320.5				6.4		1.94			1,076.6				4.6		1.70
Margin balances			981.5				6.4		2.59			1,291.5				13.7		4.23			1,231.7				10.1		3.29
Investments:
Asset-backed securities			4,842.0				32.6		2.70			4,508.4				46.0		4.08			4,538.5				37.0		3.26
Mortgage-backed securities			877.2				4.6		2.09			1,470.9				8.6		2.33			1,094.2				6.0		2.18
Corporate fixed income securities			648.9				4.2		2.59			915.0				6.9		3.02			732.8				5.0		2.76
State and municipal securities			12.2				0.1		2.19			48.0				0.2		1.85			18.4				0.1		2.13
Other			5.3				-		2.02			-				-		-			3.9				-		2.17
Total Investments			6,385.6				41.5		2.60			6,942.3				61.7		3.56			6,387.8				48.1		3.01
Loans:
Commercial and industrial			4,095.4				31.8		3.10			3,337.4				41.3		4.95			3,560.3				38.0		4.27
Residential real estate			3,589.2				25.6		2.85			2,953.7				22.5		3.05			3,416.1				25.3		2.96
Securities-based loans			1,789.2				9.9		2.22			1,916.3				20.2		4.21			2,063.8				16.5		3.19
Commercial real estate			402.6				4.0		3.98			354.3				5.0		5.63			445.0				5.8		5.22
Loans held for sale			486.7				3.3		2.68			178.6				1.8		4.02			374.5				4.0		4.26
Other			546.3				4.6		3.36			377.9				5.1		5.38			500.1				5.6		4.46
Total Loans			10,909.4				79.2		2.90			9,118.2				95.9		4.21			10,359.8				95.2		3.67
Other interest-bearing assets			476.3				(2.6	)	(2.15	)		831.6				5.9		2.86			607.9				(0.5	)	(0.30	)
Total interest-earning assets/interest income			21,188.5				128.4		2.42			20,254.5				187.9		3.71			20,595.6				161.2		3.13
Interest-bearing liabilities:
Short-term borrowings			11.4				0.1		2.83			29.8				0.2		3.16			91.3				0.2		0.88
Senior notes			1,195.0				13.1		4.38			1,016.2				11.1		4.38			1,017.1				11.2		4.40
Deposits			16,676.5				2.3		0.05			14,660.7				29.3		0.80			15,377.9				9.6		0.25
FHLB			250.8				0.7		1.09			550.2				2.9		2.12			590.5				2.4		1.59
Other interest-bearing liabilities			1,179.2				(3.1	)	(1.03	)		1,764.4				9.4		2.10			1,628.1				1.0		0.26
Total interest-bearing liabilities/interest expense		$	19,312.9			$	13.1		0.27	%	$	18,021.3			$	52.9		1.17	%	$	18,704.9			$	24.4		0.52	%
Net interest income/margin				$	115.3		2.18%			$	135.0		2.67	%			$	136.8		2.66	%

Stifel Bancorp, Inc. (16) Net Interest Income Analysis (Unaudited):
										Three Months Ended
		June 30, 2020				June 30, 2019		March 31, 2020
			Interest Average						Interest	Average				Interest	Average
	Average	Income/ Interest	Average			Income/	Interest	Average	Income/	Interest
($ in millions, except percentages)	Balance	Expense	Rate	Balance			Expense	Rate	Balance	Expense	Rate
Interest-earning assets:
Cash and federal funds sold	$	961.1	$	0.3			0.13%	$	330.6			$	1.8		2.15	%	$	446.0	$	1.2		1.10	%
Investments		6,385.6		41.5			2.60			6,942.3				61.7		3.56			6,387.8		48.1		3.01
Loans		10,909.4		79.2			2.90			9,118.2				95.9		4.21			10,359.8		95.2		3.67
Other interest-bearing assets		46.7		0.3			2.46			57.2				0.6		4.38			59.6		0.6		4.02
Total interest-earning assets/interest income		18,302.8		121.3			2.65			16,448.3				160.0		3.89			17,253.2		145.1		3.36
Interest-bearing liabilities:
Deposits		16,676.5		2.3			0.05			14,660.7				29.3		0.80			15,377.9		9.6		0.25
FHLB		250.8		0.7			1.09			550.2				2.9		2.12			590.5		2.4		1.59
Other interest-bearing liabilities		1.5		-			6.71			1.7				0.1		6.73			1.6		-		7.09
Total interest-bearing liabilities/interest expense	$	16,928.8		3.0			0.07%	$	15,212.6				32.3		0.85	%	$	15,970.0		12.0		0.30	%
Net interest income/margin			$	118.3			2.59%					$	127.7		3.11	%			$	133.1		3.09	%

9

		Stifel Bancorp, Inc. (16) - a component of Global Wealth Management
Selected operating data
(unaudited):						Three Months Ended								Six Months Ended
($ in 000s, except percentages)		6/30/20	6/30/19		% Change	3/31/20		% Change			6/30/20	6/30/19			% Change
	Net interest income		$	118,298		$	127,714		(7.4	)		$	133,131			(11.1	)		$	251,429		$	262,278			(4.1	)
	Credit loss provision	19,210	2,353	716.4		16,068			19.6		35,278	4,636		661.0
	Charge-offs			150			54		177.8				20			650.0				170				110			54.5
	Net interest margin	2.59%	3.11%		(52) bps	3.09%			(50) bps	2.83%	3.14%		(31) bps
	Financial Metrics (unaudited):																			As of
	($ in 000s, except percentages)											6/30/20						6/30/19	3/31/20
	Total assets									$		18,123,326		$		16,645,984				$	18,442,914
	Total shareholders' equity											1,378,096				1,236,318						1,224,307
	Total loans, net (includes loans held for sale)								10,923,212				9,127,836					10,565,287
	Total deposits											16,302,281				14,901,061					16,880,933
	Available-for-sale securities, at fair value								3,172,160				2,702,211						3,363,961
	Held-to-maturity securities, at amortized cost								3,083,126				3,957,629						3,083,065
	Commercial and industrial											4,149,307				3,338,127						3,813,862
	Residential real estate											3,710,657				2,984,725						3,495,136
	Securities-based loans											1,716,786				1,962,528						1,945,371
	Commercial real estate											406,788				367,283						399,732
	Loans held for sale											474,899				163,511						570,787

Stifel Bank & Trust:
Common equity tier 1 capital ratio (10)		12.4%		13.4	%		11.7	%
Tier 1 capital ratio (10)		12.4%		13.4%		11.7%
Total capital ratio (10)		13.9%		14.5	%		13.0	%
Tier 1 leverage ratio (10)		7.2%		7.2%		7.1%
Stifel Bank:
Common equity tier 1 capital ratio (10)		18.8%		17.7%		15.6%
Tier 1 capital ratio (10)		18.8%		17.7	%		15.6	%
Total capital ratio (10)		20.1%		18.9	%		16.5	%
Tier 1 leverage ratio (10)		7.1%		7.3	%		7.3	%
Credit Metrics:
Allowance for credit losses	$	139,949	$	90,472		$	121,017
Allowance as a percentage of retained loans		1.32%		1.00	%		1.20	%
Net charge-offs as a percentage of average loans		0.00%		0.00	%		0.00	%
Total nonperforming assets	$	14,602	$	21,111		$	14,616
Nonperforming assets as % of total assets		0.08%		0.13	%		0.08	%

10

Global Wealth Management Summary Results of Operations (Unaudited)
									Three Months Ended													Six Months Ended
			6/30/20							%											%					6/30/20									%
($ in 000s)		6/30/19				Change	3/31/20			Change				6/30/19					Change
Revenues:
Commissions		$	116,156		$	120,284				(3.4	)				$	136,897				(15.2	)			$	253,053			$		230,211					9.9
Principal transactions				42,967				42,104				2.0							42,982				(0.0	)				85,949						85,371					0.7
Brokerage revenues		159,123				162,388				(2.0	)				179,879				(11.5	)				339,002						315,582					7.4
Asset management and service fees				198,921				211,156				(5.8	)					237,760				(16.3	)				436,681						406,409					7.4
Net interest				121,564				137,599				(11.7	)					138,682				(12.3	)				260,246						282,894					(8.0	)
Investment banking (17)				8,016				10,559				(24.1	)						10,333				(22.4	)				18,349						18,782					(2.3	)
Other income				18,158				10,731				69.2							16,302				11.4					34,460						19,376					77.8
Net revenues		505,782				532,433				(5.0	)				582,956				(13.2	)				1,088,738				1,043,043					4.4
Non-interest expenses:
Compensation and benefits		258,291				262,321			(1.5)			298,370				(13.4)				556,661						509,794			9.2
Non-compensation operating				91,166																										181,585
expenses							77,760				17.2							90,419				0.8										146,407					24.0
Total non-interest expenses		349,457				340,081				2.8					388,789				(10.1	)				738,246						656,201					12.5
Income before income taxes		$	156,325		$	192,352				(18.7	)				$	194,167				(19.5	)			$	350,492				$		386,842					(9.4	)
As a percentage of net revenues:
Compensation and benefits				51.1				49.3												51.2										51.1						48.9
Non-compensation operating				18.0																										16.7
expenses							14.6												15.5															14.0
Income before income taxes				30.9				36.1												33.3										32.2						37.1
Institutional Group Summary Results of Operations (Unaudited)
									Three Months Ended													Six Months Ended
			6/30/20							%											%					6/30/20									%
($ in 000s)					6/30/19					Change				3/31/20				Change				6/30/19				Change
Revenues:
Commissions	$	60,875	$	44,697		36.2			$	74,198			(18.0)		$ 135,073		$	90,219			49.7
Principal transactions				123,049				54,360				126.4						95,685				28.6					218,734					115,125					90.0
Brokerage revenues		183,924				99,057			85.7						169,883				8.3			353,807					205,344				72.3
Advisory fees				97,838				82,905				18.0						76,053				28.6					173,891					187,800					(7.4	)
Capital raising		111,181				86,153		29.1						93,082			19.4			204,263					134,875			51.4
Investment banking				209,019				169,058				23.6						169,135				23.6					378,154					322,675					17.2
Other (18)		5,153				2,487		107.2						(6,780)	(176.0)		(1,627)				3,869			(142.1)
Net revenues				398,096				270,602				47.1						332,238				19.8					730,334					531,888					37.3
Non-interest expenses:
Compensation and benefits				241,420				155,779				55.0						205,988				17.2					447,408					315,190					41.9
Non-compensation operating				73,627																												158,137
expenses							75,521				(2.5		)				84,510				(12.9	)								145,192					8.9
Total non-interest expenses				315,047				231,300				36.2						290,498				8.5					605,545					460,382					31.5
Income before income taxes	$	83,049	$	39,302			111.3				$	41,740				99.0			$ 124,789		$	71,506				74.5
As a percentage of net revenues:
Compensation and benefits				60.6				57.6											62.0											61.3					59.3
Non-compensation operating		18.5																										21.6
expenses					27.9											25.4													27.3
Income before income taxes				20.9				14.5											12.6											17.1					13.4

11

Non-GAAP Financial Measures

The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company's financial results for the three months ended June 30, 2020, June 30, 2019, and March 31, 2020. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company's core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company's results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non- recurring and not representative of on-going business.

A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of the Company's business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company's financial performance should be considered together.

The following table provides details with respect to reconciling net income and earnings per diluted common share on a GAAP basis for the three and six months ended June 30, 2020 and 2019, and the three months ended March 31, 2020 to net income and earnings per diluted common share on a non-GAAP basis for the same period.

($ in 000s)		Three Months Ended				Six Months Ended
	6/30/20				6/30/19					3/31/20			6/30/20				6/30/19
GAAP net income applicable to Stifel Financial Corp.		$	107,887			$	109,085				$	86,589		$	194,476			$	208,292
Preferred dividend		4,843				5,288					4,844			9,687				7,632
Net income available to common shareholders			103,044				103,797					81,745			184,789				200,660
Non-GAAP adjustments:
Merger-related and severance (19)		16,259				6,721					13,510			29,769				14,912
Litigation-related(20)			-				3,507					-			-				3,507
Provision for income taxes (21)		(3,968)			(2,654)				(3,322)		(7,290)			(3,188)
Total non-GAAP adjustments			12,291				7,574					10,188			22,479				15,231
Non-GAAP net income available to common shareholders	$	115,335		$	111,371		$	91,933		$	207,268		$	215,891
Weighted average diluted shares outstanding			74,387				79,079					76,619			75,651				79,160
GAAP earnings per diluted common share		$	1.45			$	1.38				$	1.13		$	2.57			$	2.63
Non-GAAP adjustments			0.17				0.10					0.13			0.30				0.19
Non-GAAP earnings per diluted common share	$	1.62		$	1.48		$	1.26		$	2.87		$	2.82
GAAP earnings per diluted common share available to common
shareholders		$	1.39			$	1.31				$	1.07		$	2.44			$	2.53
Non-GAAP adjustments			0.16				0.10					0.13			0.30				0.20
Non-GAAP earnings per diluted common share available to	$	1.55											$	2.74
common shareholders				$	1.41			$	1.20				$	2.73

12

Footnotes

1. Annualized return on average tangible common shareholders' equity ("ROTE") is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders' equity or, in the case of non-GAAP ROTE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible shareholders' equity. Tangible common shareholders' equity equals total Stifel Financial common shareholders' equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Deferred taxes on goodwill and tangible assets was $48.5 million, $41.6 million, and $47.2 million, as of June 30, 2020 and 2019, and March 31, 2020, respectively. Historical periods have been restated to conform with the current period presentation.
2. Reconciliations of the Company's GAAP results to these non-GAAP measures are discussed within and under "Non-GAAP Financial Measures."
3. Non-GAAPpre-tax margin for the three months ended June 30, 2020 of 17.8% is calculated by adding non-GAAP adjustments of $16.3 million to our GAAP income before income taxes of $143.0 million and dividing it by non-GAAP net revenues for the quarter of $895.8 million. Reconciliations of the Company's GAAP results to certain non-GAAP measures is discussed within and under "Non-GAAP Financial Measures."
4. Non-GAAPpre-tax margin for the six months ended June 30, 2020 of 15.9% is calculated by adding non-GAAP adjustments of $29.8 million to our GAAP income before income taxes of $258.1 million and dividing it by non-GAAP net revenues of $1.8 billion. Reconciliations of the Company's GAAP results to certain non-GAAP measures is discussed within and under "Non-GAAP Financial Measures."
5. Excludes revenue included in the Other segment.
6. See further discussion of non-GAAP adjustments under "Non-GAAP Financial Measures."
7. In the first quarter of 2020, the Company adopted ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments," which amends several aspects of the measurement of credit losses on certain financial instruments, including replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses (CECL) model. For further information about ASU No. 2016-13, see Note 2 "Summary of Significant Accounting Policies" in Part II, Item 8 "Financial Statements and Supplementary Data" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
8. Book value per common share represents shareholders' equity (excluding preferred stock and non-controlling interests) divided by period end common shares outstanding.
9. Annualized return on average common shareholders' equity ("ROE") is calculated by dividing annualized net income applicable to common shareholders by average Stifel Financial common shareholders' equity or, in the case of non-GAAP ROE, calculated by dividing non-GAAP net income applicable to commons shareholders by average Stifel Financial common shareholders' equity.
10. Capital ratios are estimates at time of the Company's earnings release.
11. Includes client margin balances held by our broker-dealer subsidiaries and securities-based loans held at our bank subsidiaries.
12. Includes Private Client Group and Trust Business.
13. Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees.
14. Asset management assets managed in Private Client Group or Trust accounts.
15. Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks.
16. Includes Stifel Bank & Trust, Stifel Bank, Stifel Trust Company, N.A, and Stifel Trust Company Delaware, N.A.
17. Includes capital raising and advisory fees.
18. Includes net interest, asset management and service fees, and other income.
19. Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, professional fees, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company's on-going business.
20. Primarily related to costs associated with Company's legal matters.
21. See details of non-GAAP adjustments under "Provision for Income Taxes."

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