# STIFEL FINANCIAL CORP (SF) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from STIFEL FINANCIAL CORP's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/720672/000095017025027702/sf-20241231.htm
Accession: 0000950170-25-027702
Filing date: 2025-02-26
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/SF/
All MD&A years: /company/SF/mda/
Previous year: /company/SF/mda/fy2023/ (FY 2023)
Next year: /company/SF/mda/fy2025/ (FY 2025)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of our company should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Annual Report on Form 10-K for the year ended December 31, 2024.

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 U.S., Europe, and Canada. 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 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 associate focus have earned us a reputation as one of the nation’s leading wealth management and investment banking firms. 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 private client and institutional group businesses.

Stifel Financial Corp., 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, the United Kingdom, and Canada, with a growing presence in Europe. Our principal customers are individual investors, corporations, municipalities, and institutions.

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.

On July 18, 2024, the Company’s 4.25% Senior Notes matured, resulting in the Company's decision to retire the $500.0 million outstanding balance given its significant liquidity position.

On August 1, 2024, the Company acquired Finance 500, Inc. (“Finance 500”) and CB Resource, Inc. (“CBR”), which operate as strategic partners under common ownership. Finance 500 is a brokerage and investment services provider focused on underwriting FDIC-insured Certificates of Deposit and fixed income securities trading. CBR integrates ERM, strategic and capital plan solutions, and industry analytics through its fully integrated tech-enabled platform. Consideration for this acquisition consisted of cash from operations.

On January 6, 2025, the Company announced it signed a definitive agreement to acquire Bryan, Garnier & Co. (“Bryan Garnier”), an independent full-service investment bank focused on European technology and healthcare companies. Bryan Garnier’s product suite includes mergers & acquisitions advisory, private and public growth financing solutions, and institutional sales and execution. Bryan Garnier is headquartered in Europe with offices in Paris, London, Amsterdam, Munich, Oslo, Stockholm, and New York. The transaction is expected to close in the first half of 2025.

Results for the Year Ended December 31, 2024

For the year ended December 31, 2024, net revenues increased 14.3% to a record $4.97 billion compared to $4.35 billion during the comparable period in 2023. Net income available to common shareholders for the year ended December 31, 2024, increased 43.0% to $694.1 million, or $6.25 per diluted common share, compared to $485.3 million, or $4.28 per diluted common share, in 2023. For the year ended December 31, 2024, our Global Wealth Management segment posted record net revenues.

Our revenue growth for the year ended December 31, 2024, was primarily attributable to higher investment banking revenues, asset management revenues, and transactional revenues, partially offset by lower net interest income.

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We remain well-positioned entering fiscal 2025, with nearly $501 billion of client assets under administration, strong activity levels for financial advisory recruiting, a significant interest rate-sensitive asset base at our bank subsidiaries, and a strong investment banking pipeline. We expect wealth management revenues to grow as investors continue to redeploy cash into the markets and client assets grow through recruiting and market appreciation. Institutional revenues are expected to benefit from increased investment banking activity as well as continued growth in transactional revenues, particularly in the fixed income business.

Economic and Market Conditions

We currently operate in a challenging and uncertain economic environment. Results in the businesses in which we operate are highly correlated to general economic conditions and, more specifically, to the direction of the U.S. equity and fixed income markets. Market volatility, overall market conditions, interest rates, economic, political, and regulatory trends, and industry competition are among the factors which could affect us and which are unpredictable and beyond our control. These factors affect the financial decisions made by market participants who include investors and competitors, impacting their level of participation in the financial markets. In addition, in periods of reduced financial market activity, profitability is likely to be adversely affected because certain expenses remain relatively fixed, including salaries and related costs, as well as portions of communications costs and occupancy expenses. Accordingly, earnings for any period should not be considered representative of earnings to be expected for any other period.

For more information on economic and market conditions, and the potential effects of geopolitical events on our future results, refer to “Item 1A – Risk Factors” of this Form 10-K.

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RESULTS OF OPERATIONS

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

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31,","","","Percentage Change","","","As a Percentage of Net Revenues for the Year Ended December 31,"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022","","","2024","","","2023","","","2022"],["Revenues:"],["Commissions","","$","756,024","","","$","673,597","","","$","710,589","","","","12.2","%","","","(5.2",")%","","","15.2","%","","","15.5","%","","","16.2","%"],["Principal transactions","","","604,564","","","","490,440","","","","529,033","","","","23.3","","","","(7.3",")","","","12.2","","","","11.3","","","","12.0"],["Investment banking","","","994,831","","","","731,255","","","","971,485","","","","36.0","","","","(24.7",")","","","20.0","","","","16.8","","","","22.1"],["Asset management","","","1,536,674","","","","1,299,496","","","","1,262,919","","","","18.3","","","","2.9","","","","30.9","","","","29.9","","","","28.8"],["Interest","","","2,016,464","","","","1,955,745","","","","1,099,115","","","","3.1","","","","77.9","","","","40.6","","","","45.0","","","","25.0"],["Other income","","","43,129","","","","8,747","","","","19,685","","","","393.1","","","","(55.6",")","","","0.8","","","","0.1","","","","0.5"],["Total revenues","","","5,951,686","","","","5,159,280","","","","4,592,826","","","","15.4","","","","12.3","","","","119.7","","","","118.6","","","","104.6"],["Interest expense","","","981,366","","","","810,336","","","","201,387","","","","21.1","","","","302.4","","","","19.7","","","","18.6","","","","4.6"],["Net revenues","","","4,970,320","","","","4,348,944","","","","4,391,439","","","","14.3","","","","(1.0",")","","","100.0","","","","100.0","","","","100.0"],["Non-interest expenses:"],["Compensation and benefits","","","2,916,229","","","","2,554,581","","","","2,586,232","","","","14.2","","","","(1.2",")","","","58.7","","","","58.7","","","","58.9"],["Occupancy and equipment rental","","","362,402","","","","339,322","","","","313,247","","","","6.8","","","","8.3","","","","7.3","","","","7.8","","","","7.1"],["Communication and office supplies","","","194,382","","","","184,652","","","","175,135","","","","5.3","","","","5.4","","","","3.9","","","","4.3","","","","4.0"],["Commissions and floor brokerage","","","62,823","","","","58,344","","","","57,752","","","","7.7","","","","1.0","","","","1.3","","","","1.3","","","","1.3"],["Provision for credit losses","","","25,402","","","","24,999","","","","33,506","","","","1.6","","","","(25.4",")","","","0.5","","","","0.6","","","","0.8"],["Other operating expenses","","","480,638","","","","480,354","","","","340,451","","","","0.1","","","","41.1","","","","9.6","","","","11.1","","","","7.7"],["Total non-interest expenses","","","4,041,876","","","","3,642,252","","","","3,506,323","","","","11.0","","","","3.9","","","","81.3","","","","83.8","","","","79.8"],["Income before income taxes","","","928,444","","","","706,692","","","","885,116","","","","31.4","","","","(20.2",")","","","18.7","","","","16.2","","","","20.2"],["Provision for income taxes","","","197,065","","","","184,156","","","","222,961","","","","7.0","","","","(17.4",")","","","4.0","","","","4.2","","","","5.1"],["Net income","","","731,379","","","","522,536","","","","662,155","","","","40.0","","","","(21.1",")","","","14.7","","","","12.0","","","","15.1"],["Preferred dividends","","","37,281","","","","37,281","","","","37,281","","","","\u2014","","","","\u2014","","","","0.7","","","","0.8","","","","0.9"],["Net income available to common shareholders","","$","694,098","","","$","485,255","","","$","624,874","","","","43.0","%","","","(22.3",")%","","","14.0","%","","","11.2","%","","","14.2","%"]]
[[/GREPCENT_TABLE]]

NET REVENUES

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

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31,","","","Percentage Change"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022"],["Revenues:"],["Commissions","","$","756,024","","","$","673,597","","","$","710,589","","","","12.2","%","","","(5.2",")%"],["Principal transactions","","","604,564","","","","490,440","","","","529,033","","","","23.3","","","","(7.3",")"],["Transactional revenues","","","1,360,588","","","","1,164,037","","","","1,239,622","","","","16.9","","","","(6.1",")"],["Capital raising","","","417,399","","","","265,667","","","","256,862","","","","57.1","","","","3.4"],["Advisory","","","577,432","","","","465,588","","","","714,623","","","","24.0","","","","(34.8",")"],["Investment banking","","","994,831","","","","731,255","","","","971,485","","","","36.0","","","","(24.7",")"],["Asset management","","","1,536,674","","","","1,299,496","","","","1,262,919","","","","18.3","","","","2.9"],["Net interest","","","1,035,098","","","","1,145,409","","","","897,728","","","","(9.6",")","","","27.6"],["Other income","","","43,129","","","","8,747","","","","19,685","","","","393.1","","","","(55.6",")"],["Total net revenues","","$","4,970,320","","","$","4,348,944","","","$","4,391,439","","","","14.3","%","","","(1.0",")%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2024, Compared With Year Ended December 31, 2023

For the year ended December 31, 2024, net revenues increased 14.3% to a record $4.97 billion from $4.35 billion in 2023. The increase was primarily attributable to higher investment banking, asset management, and transactional revenues, partially offset by lower net interest income.

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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 year ended December 31, 2024, commission revenues increased 12.2% to $756.0 million from $673.6 million in 2023.

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

For the year ended December 31, 2024, principal transactions revenues increased 23.3% to $604.6 million from $490.4 million in 2023.

Transactional revenues – For the year ended December 31, 2024, transactional revenues increased 16.9% to $1.36 billion from $1.16 billion in 2023 as a result of an increase in client activity.

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 year ended December 31, 2024, investment banking revenues increased 36.0% to $994.8 million from $731.3 million in 2023.

Capital-raising revenues increased 57.1% to $417.4 million for the year ended December 31, 2024, from $265.7 million in 2023. For the year ended December 31, 2024, equity capital-raising revenues increased 73.2% to $198.5 million from $114.6 million in 2023 driven by higher volumes during 2024. For the year ended December 31, 2024, fixed income capital-raising revenues increased 44.9% to $218.9 million from $151.1 million in 2023 driven by higher bond issuances during 2024.

Advisory revenues increased 24.0% to $577.4 million for the year ended December 31, 2024, from $465.6 million in 2023. The increase is primarily attributable to higher levels of completed advisory transactions during 2024.

Asset management – Asset management revenues include fees for asset-based financial services provided to individuals and institutional clients. Investment advisory fees are charged based on the value of assets in fee-based accounts. Asset management revenues are affected by changes in the balances of client assets due to market fluctuations and levels of net new client assets.

For the year ended December 31, 2024, asset management revenues increased 18.3% to a record $1.54 billion from $1.30 billion in 2023. The increase is primarily attributable to market appreciation leading to higher asset values and net cash inflows primarily as a result of our recruiting efforts. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.

Other income – For the year ended December 31, 2024, other income increased 393.1% to $43.1 million from $8.7 million during 2023. The increase is primarily attributable to higher investment gains over the comparable period in 2023.

Year Ended December 31, 2023, Compared With Year Ended December 31, 2022

For the year ended December 31, 2023, net revenues decreased 1.0% to $4.35 billion from $4.4 billion in 2022. The decrease was primarily attributable to lower advisory and transactional revenues, partially offset by higher net interest income, asset management, and capital-raising revenues.

Commissions – For the year ended December 31, 2023, commission revenues decreased 5.2% to $673.6 million from $710.6 million in 2022.

Principal transactions – For the year ended December 31, 2023, principal transactions revenues decreased 7.3% to $490.4 million from $529.0 million in 2022.

Transactional revenues – For the year ended December 31, 2023, transactional revenues decreased 6.1% to $1.16 billion from $1.24 billion in 2022 as a result of a decrease in client activity. Broad macroeconomic and geopolitical concerns led to volatility in global equity prices.

Investment banking – For the year ended December 31, 2023, investment banking revenues decreased 24.7% to $731.3 million from $971.5 million in 2022.

Capital-raising revenues increased 3.4% to $265.7 million for the year ended December 31, 2023, from $256.9 million in 2022. For the year ended December 31, 2023, equity capital-raising revenues increased 1.6% to $114.6 million from $112.7 million in 2022 driven by higher volumes during 2023. For the year ended December 31, 2023, fixed income capital-raising revenues increased 4.8% to $151.1 million from $144.2 million in 2022 driven by an increase in our corporate debt issuance business.

Advisory revenue decreased 34.8% to $465.6 million for the year ended December 31, 2023, from $714.6 million in 2022. The decrease is primarily attributable to lower levels of completed advisory transactions during 2023.

Asset management – For the year ended December 31, 2023, asset management revenues increased 2.9% to $1.30 billion from $1.26 billion in 2022. The increase is primarily attributable to higher asset values and strong recruiting. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.

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Other income – For the year ended December 31, 2023, other income decreased 55.6% to $8.7 million from $19.7 million in 2022. The decrease is primarily attributable to losses on the sale of investments in the first quarter of 2023 and a decrease in loan origination fees.

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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):

[[GREPCENT_TABLE]]
[["","","For the Year Ended"],["","","December 31, 2024","","","December 31, 2023","","December 31, 2022"],["","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate","","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate","","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate"],["Interest-earning assets:"],["Interest-bearing cash and federal funds sold","","$","3,126,654","","","$","164,110","","","","5.25","%","","$","2,394,404","","","$","123,363","","","","5.15","%","","$","1,346,939","","","$","29,996","","","","2.23","%"],["Financial instruments owned","","","1,126,934","","","","25,001","","","","2.22","","","","895,020","","","","16,726","","","","1.87","","","","1,059,013","","","","20,545","","","","1.94"],["Margin balances","","","698,487","","","","55,156","","","","7.90","","","","786,264","","","","61,138","","","","7.78","","","","1,060,724","","","","43,751","","","","4.12"],["Investment portfolio","","","7,772,968","","","","484,133","","","","6.23","","","","7,735,535","","","","467,199","","","","6.04","","","","7,670,470","","","","247,755","","","","3.23"],["Loans","","","20,239,599","","","","1,250,048","","","","6.18","","","","20,738,634","","","","1,253,008","","","","6.04","","","","19,457,051","","","","752,273","","","","3.87"],["Other interest-bearing assets","","","838,928","","","","38,016","","","","4.53","","","","764,679","","","","34,311","","","","4.49","","","","936,508","","","","4,795","","","","0.51"],["Total interest-earning assets/interest income","","$","33,803,570","","","$","2,016,464","","","","5.97","%","","$","33,314,536","","","$","1,955,745","","","","5.87","%","","$","31,530,705","","","$","1,099,115","","","","3.49","%"],["Interest-bearing liabilities:"],["Short-term borrowings","","$","404","","","$","26","","","","6.44","%","","$","2,412","","","$","144","","","","5.97","%","","$","1,323","","","$","23","","","","1.74","%"],["Stock loan","","","253,467","","","","(7,203",")","","","(2.84",")","","","147,904","","","","(8,028",")","","","(5.43",")","","","334,712","","","","(16,642",")","","","(4.97",")"],["Senior notes","","","905,733","","","","40,349","","","","4.45","","","","1,115,052","","","","50,025","","","","4.49","","","","1,113,977","","","","44,424","","","","3.99"],["Stifel Capital Trusts","","","60,000","","","","4,408","","","","7.35","","","","60,000","","","","4,363","","","","7.27","","","","60,000","","","","2,090","","","","3.48"],["Deposits","","","27,611,724","","","","888,453","","","","3.22","","","","27,267,429","","","","724,857","","","","2.66","","","","25,170,404","","","","146,636","","","","0.58"],["Federal Home Loan Bank advances","","","1","","","","\u2014","","","","2.15","","","","1,371","","","","68","","","","4.99","","","","238,508","","","","4,094","","","","1.72"],["Other interest-bearing liabilities","","","1,065,202","","","","55,333","","","","5.19","","","","1,027,985","","","","38,907","","","","3.78","","","","1,067,725","","","","20,762","","","","1.94"],["Total interest-bearing liabilities/interest expense","","$","29,896,531","","","","981,366","","","","3.28","%","","$","29,622,153","","","","810,336","","","","2.74","%","","$","27,986,649","","","","201,387","","","","0.72","%"],["Net interest income/margin","","","","","$","1,035,098","","","","3.06","%","","","","","$","1,145,409","","","","3.44","%","","","","","$","897,728","","","","2.85","%"]]
[[/GREPCENT_TABLE]]

Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table included in “Results of Operations – Global Wealth Management” for additional information on Stifel Bancorp’s average balances and interest income and expense.

Year Ended December 31, 2024, Compared With Year Ended December 31, 2023

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 year ended December 31, 2024, net interest income decreased 9.6% to $1.0 billion from $1.1 billion in 2023.

For the year ended December 31, 2024, interest revenue increased 3.1% to $2.02 billion from $1.96 billion in 2023, principally as a result of higher interest rates and an increase in interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $30.1 billion during the year ended December 31, 2024, compared to $29.9 billion in 2023 at average interest rates of 6.14% and 6.01%, respectively.

For the year ended December 31, 2024, interest expense increased 21.1% to $981.4 million from $810.3 million in 2023. The increase is primarily attributable to higher interest rates and higher interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $27.7 billion during the year ended December 31, 2024, compared to $27.3 billion in 2023 at average interest rates of 3.23% and 2.66%, respectively.

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Year Ended December 31, 2023, Compared With Year Ended December 31, 2022

Net interest income – For the year ended December 31, 2023, net interest income increased 27.6% to $1.1 billion from $897.7 million in 2022.

For the year ended December 31, 2023, interest revenue increased 77.9% to $2.0 billion from $1.1 billion in 2022, principally as a result of higher interest rates and an increase in interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $29.9 billion during the year ended December 31, 2023, compared to $27.8 billion in 2022 at average interest rates of 6.01% and 3.66%, respectively.

For the year ended December 31, 2023, interest expense increased 302.4% to $810.3 million from $201.4 million in 2022. The increase is primarily attributable to higher interest rates and higher interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $27.3 billion during the year ended December 31, 2023, compared to $25.4 billion in 2022 at average interest rates of 2.66% and 0.59%, respectively.

NON-INTEREST EXPENSES

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

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31,","","","Percentage Change"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022"],["Non-interest expenses:"],["Compensation and benefits","","$","2,916,229","","","$","2,554,581","","","$","2,586,232","","","","14.2","%","","","(1.2",")%"],["Occupancy and equipment rental","","","362,402","","","","339,322","","","","313,247","","","","6.8","","","","8.3"],["Communications and office supplies","","","194,382","","","","184,652","","","","175,135","","","","5.3","","","","5.4"],["Commissions and floor brokerage","","","62,823","","","","58,344","","","","57,752","","","","7.7","","","","1.0"],["Provision for credit losses","","","25,402","","","","24,999","","","","33,506","","","","1.6","","","","(25.4",")"],["Other operating expenses","","","480,638","","","","480,354","","","","340,451","","","","0.1","","","","41.1"],["Total non-interest expenses","","$","4,041,876","","","$","3,642,252","","","$","3,506,323","","","","11.0","%","","","3.9","%"]]
[[/GREPCENT_TABLE]]

Year Ended December 31, 2024, Compared With Year Ended December 31, 2023

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 associate-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 year ended December 31, 2024, compensation and benefits expense increased 14.2% to $2.92 billion from $2.55 billion in 2023. The increase in compensation and benefits expenses is primarily attributable to higher variable compensation expense. Compensation and benefits expense as a percentage of net revenues of 58.7% for the year ended December 31, 2024, was consistent with the comparable period in 2023.

Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 6.8% to $362.4 million from $339.3 million in 2023. The increase is primarily attributable to higher data processing and occupancy costs associated with the continued investments made in our business.

Communications and office supplies – Communications expense includes costs for telecommunication and data transmission, primarily for obtaining third-party market data information. For the year ended December 31, 2024, communications and office supplies expense increased 5.3% to $194.4 million from $184.7 million in 2023. The increase is primarily attributable to higher communication and quote equipment expenses associated with the continued investments made in our business.

Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage expense increased 7.7% to $62.8 million from $58.3 million in 2023. The increase is primarily attributable to higher clearing expense and electronic communication network (“ECN”) trading costs and processing expenses.

Provision for credit losses – For the year ended December 31, 2024, provision for credit losses increased 1.6% to $25.4 million from $25.0 million in 2023. Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.

Other operating expenses – Other operating expenses primarily include license and registration fees, litigation-related expenses, which consist of amounts we accrue and/or pay out for legal and regulatory matters, travel and entertainment, promotional, investment banking deal costs, and professional service expenses.

36

For the year ended December 31, 2024, other operating expenses increased 0.1% to $480.6 million from $480.4 million in 2023. The increase is primarily attributable to higher investment banking transaction expense, professional fees, advertising, conference-related expenses, and subscriptions, partially offset by lower litigation-related expenses. During the year ended December 31, 2023, we recorded $67 million related to provisions for legal and regulatory matters.

Provision for income taxes – For the year ended December 31, 2024, our provision for income taxes was $197.1 million, representing an effective tax rate of 21.2%, compared to $184.2 million in 2023, representing an effective tax rate of 26.1%. The effective tax rate in 2024 was impacted by the benefit related to the tax impact on stock-based compensation.

Year Ended December 31, 2023, Compared With Year Ended December 31, 2022

Except as noted in the following discussion of variances, the underlying reasons for the increase in non-interest expenses can be attributed principally to our continued expansion, both organically and through our acquisitions, and increased administrative overhead to support the growth in our segments.

Compensation and benefits – For the year ended December 31, 2023, compensation and benefits expense decreased 1.2% to $2.55 billion from $2.59 billion in 2022. The decrease in compensation and benefits expenses is primarily attributable to lower variable compensation expense.

Compensation and benefits expense as a percentage of net revenues was 58.7% for the year ended December 31, 2023, compared to 58.9% for the year ended December 31, 2022. The compensation ratio benefited from higher net interest income, which is a relatively low compensatory revenue source.

Occupancy and equipment rental – For the year ended December 31, 2023, occupancy and equipment rental expense increased 8.3% to $339.3 million from $313.2 million in 2022. The increase is primarily attributable to higher occupancy, data processing, and furniture and equipment costs associated with the continued investments made in our business.

Communications and office supplies – For the year ended December 31, 2023, communications and office supplies expense increased 5.4% to $184.7 million from $175.1 million in 2022. The increase is primarily attributable to higher communication and quote equipment expenses associated with the continued investments made in our business.

Commissions and floor brokerage – For the year ended December 31, 2023, commissions and floor brokerage expense increased 1.0% to $58.3 million from $57.8 million in 2022. The increase is primarily attributable to higher ECN trading costs and processing expenses, partially offset by lower clearing expenses.

Provision for credit losses – For the year ended December 31, 2023, provision for credit losses decreased 25.4% to $25.0 million from $33.5 million in 2022. Provision for credit losses was primarily impacted by a slightly better macroeconomic forecast, partially offset by a deterioration in certain asset classes.

Other operating expenses – For the year ended December 31, 2023, other operating expenses increased 41.1% to $480.4 million from $340.5 million in 2022. Elevated provisions for legal and regulatory matters during the third quarter of 2023 accounted for approximately $67 million of the increase, with the remainder primarily resulting from higher travel and entertainment expenses, FDIC-insurance expense, professional fees, advertising, conference-related expenses, and subscriptions, partially offset by lower investment banking transaction expenses.

Provision for income taxes – For the year ended December 31, 2023, our provision for income taxes was $184.2 million, representing an effective tax rate of 26.1%, compared to $223.0 million in 2022, representing an effective tax rate of 25.2%. The effective tax rate in 2023 was impacted by the benefit related to the tax impact on stock-based compensation and the non-deductibility of the provision for legal and regulatory matters recorded during the third quarter of 2023.

37

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. 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 FDIC-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.

The success of our Global Wealth Management segment is dependent upon the quality of our products, services, financial advisors, and support personnel, including our ability to attract, retain, and motivate a sufficient number of these associates. We face competition for qualified associates from major financial services companies, including other brokerage firms, insurance companies, banking institutions, and discount brokerage firms. Segment net revenues and operating income are used to evaluate and measure segment performance by management in assessing performance and deciding how to allocate resources.

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 success of our Institutional Group segment is dependent upon the quality of our personnel, the quality and selection of our investment products and services, pricing (such as execution pricing and fee levels), and reputation. Segment net revenues and operating income are used to evaluate and measure segment performance by management in assessing performance and deciding how to allocate resources.

The Other segment includes interest income and expense 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.

38

Results of Operations – Global Wealth Management

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

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31,","","","Percentage Change","","","As a Percentage of Net Revenues for the Year Ended December 31,"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022","","","2024","","","2023","","","2022"],["Revenues:"],["Commissions","","$","508,717","","","$","444,949","","","$","473,638","","","","14.3","%","","","(6.1",")%","","","15.5","%","","","14.6","%","","","16.8","%"],["Principal transactions","","","243,635","","","","209,282","","","","195,274","","","","16.4","","","","7.2","","","","7.4","","","","6.9","","","","6.9"],["Transactional revenues","","","752,352","","","","654,231","","","","668,912","","","","15.0","","","","(2.2",")","","","22.9","","","","21.5","","","","23.7"],["Asset management","","","1,536,296","","","","1,299,361","","","","1,262,841","","","","18.2","","","","2.9","","","","46.8","","","","42.6","","","","44.7"],["Interest","","","1,910,502","","","","1,861,873","","","","1,062,710","","","","2.6","","","","75.2","","","","58.2","","","","61.0","","","","37.6"],["Investment banking","","","21,475","","","","16,680","","","","19,515","","","","28.7","","","","(14.5",")","","","0.7","","","","0.5","","","","0.7"],["Other income","","","6,125","","","","(6,938",")","","","(5,182",")","","","188.3","","","","(33.9",")","","","0.1","","","","(0.2",")","","","(0.2",")"],["Total revenues","","","4,226,750","","","","3,825,207","","","","3,008,796","","","","10.5","","","","27.1","","","","128.7","","","","125.4","","","","106.5"],["Interest expense","","","942,790","","","","775,245","","","","182,930","","","","21.6","","","","323.8","","","","28.7","","","","25.4","","","","6.5"],["Net revenues","","","3,283,960","","","","3,049,962","","","","2,825,866","","","","7.7","","","","7.9","","","","100.0","","","","100.0","","","","100.0"],["Non-interest expenses:"],["Compensation and benefits","","","1,605,148","","","","1,415,210","","","","1,368,576","","","","13.4","","","","3.4","","","","48.9","","","","46.4","","","","48.4"],["Occupancy and equipment rental","","","175,389","","","","165,776","","","","153,079","","","","5.8","","","","8.3","","","","5.3","","","","5.4","","","","5.4"],["Communication and office supplies","","","65,383","","","","63,345","","","","60,791","","","","3.2","","","","4.2","","","","2.0","","","","2.1","","","","2.2"],["Commissions and floor brokerage","","","27,158","","","","25,458","","","","25,983","","","","6.7","","","","(2.0",")","","","0.8","","","","0.8","","","","0.9"],["Provision for credit losses","","","25,102","","","","22,699","","","","33,506","","","","10.6","","","","(32.3",")","","","0.8","","","","0.7","","","","1.2"],["Other operating expenses","","","177,838","","","","141,652","","","","116,360","","","","25.5","","","","21.7","","","","5.4","","","","4.7","","","","4.1"],["Total non-interest expenses","","","2,076,018","","","","1,834,140","","","","1,758,295","","","","13.2","","","","4.3","","","","63.2","","","","60.1","","","","62.2"],["Income before income taxes","","$","1,207,942","","","$","1,215,822","","","$","1,067,571","","","","(0.6",")%","","","13.9","%","","","36.8","%","","","39.9","%","","","37.8","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","","December 31,"],["","","2024","","","2023","","","2022"],["Branch offices","","","389","","","","398","","","","398"],["Financial advisors","","","2,229","","","","2,278","","","","2,242"],["Independent contractors","","","113","","","","108","","","","102"],["Total financial advisors","","","2,342","","","","2,386","","","","2,344"]]
[[/GREPCENT_TABLE]]

39

Year Ended December 31, 2024, Compared With Year Ended December 31, 2023

NET REVENUES

For the year ended December 31, 2024, Global Wealth Management net revenues increased 7.7% to a record $3.3 billion from $3.0 billion in 2023. The increase in net revenues is primarily attributable to increases in asset management revenues and transactional revenues, partially offset by lower net interest income.

Commissions – For the year ended December 31, 2024, commission revenues increased 14.3% to $508.7 million from $444.9 million in 2023. The increase is primarily attributable to a increase in equities trading and mutual funds revenue.

Principal transactions – For the year ended December 31, 2024, principal transactions revenues increased 16.4% to $243.6 million from $209.3 million in 2023.

Transactional revenues – For the year ended December 31, 2024, transactional revenues increased 15.0% to $752.4 million from $654.2 million in 2023 as a result of a increase in client activity.

Asset management – For the year ended December 31, 2024, asset management revenues increased 18.2% to a record $1.54 billion from $1.30 billion in 2023. The increase 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 of the prior quarter.

Client asset metrics as of the periods indicated (in thousands):

[[GREPCENT_TABLE]]
[["","","December 31,","","","Percentage Change"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022"],["Client assets","","$","501,402,000","","","$","444,318,000","","","$","389,818,000","","","","12.8","%","","","14.0","%"],["Fee-based client assets","","$","192,705,000","","","$","165,301,000","","","$","144,952,000","","","","16.6","","","","14.0"],["Number of client accounts","","","1,246,000","","","","1,213,000","","","","1,183,000","","","","2.7","","","","2.5"],["Number of fee-based client accounts","","","355,000","","","","333,000","","","","319,000","","","","6.6","","","","4.4"]]
[[/GREPCENT_TABLE]]

The increase in the value of our client assets and fee-based assets was primarily attributable to improved market conditions and asset growth resulting from our recruiting efforts.

Interest revenue – For the year ended December 31, 2024, interest revenue increased 2.6% to $1.91 billion from $1.86 billion in 2023. The increase is primarily attributable to higher interest-earning assets and higher interest rates. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table below for additional information on Stifel Bancorp’s average balances and interest income and expense.

Investment banking – Investment banking, which represents sales credits for investment banking underwritings, increased 28.7% to $21.5 million for the year ended December 31, 2024, from $16.7 million in 2023. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in investment banking revenues.

Other income – For the year ended December 31, 2024, other income increased 188.3% to $6.1 million from a loss of $6.9 million in 2023. The increase is primarily attributable an increase in investment gains over 2023.

Interest expense – For the year ended December 31, 2024, interest expense increased 21.6% to $942.8 million from $775.2 million in 2023. The increase in interest expense is primarily attributable to higher interest rates and higher interest-bearing liabilities. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table below for additional information on Stifel Bancorp’s average balances and interest income and expense.

NON-INTEREST EXPENSES

For the year ended December 31, 2024, Global Wealth Management non-interest expenses increased 13.2% to $2.08 billion from $1.83 billion in 2023.

Compensation and benefits – For the year ended December 31, 2024, compensation and benefits expense increased 13.4% to $1.61 billion from $1.42 billion in 2023. The increase is primarily attributable to increased variable compensation from our continued recruiting efforts.

Compensation and benefits expense as a percentage of net revenues was 48.9% for the year ended December 31, 2024, compared to 46.4% in 2023. The increase is primarily as a result of the revenue mix across the segment.

Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 5.8% to $175.4 million from $165.8 million in 2023. The increase is primarily attributable to higher data processing, occupancy, and furniture and equipment costs associated with an increase in business activity.

40

Communications and office supplies – For the year ended December 31, 2024, communications and office supplies expense increased 3.2% to $65.4 million from $63.3 million in 2023. The increase is primarily attributable to higher postage and shipping expenses and communication and quote equipment expenses associated with the continued growth of our business, partially offset by lower internet costs.

Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage expense increased 6.7% to $27.2 million from $25.5 million in 2023. The increase is primarily attributable to higher clearing expenses.

Provision for credit losses – For the year ended December 31, 2024, provision for credit losses increased 10.6% to $25.1 million from $22.7 million in 2023. Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.

Other operating expenses – For the year ended December 31, 2024, other operating expenses increased 25.5% to $177.8 million from $141.7 million in 2023. The increase is primarily attributable to increases in litigation-related expense, professional fees, subscription expense, and travel and conference-related expenses, partially offset by lower insurance expense and bank service charges.

INCOME BEFORE INCOME TAXES

For the year ended December 31, 2024, income before income taxes decreased 0.6% to $1.21 billion from $1.22 billion in 2023. Profit margins (income before income taxes as a percent of net revenues) have decreased to 36.8% for the year ended December 31, 2024, from 39.9% in 2023. The profit margin was impacted by an increase in litigation-related expenses and provision for credit losses, as well as a change in the composition of revenue (lower net interest income).

Year Ended December 31, 2023, Compared With Year Ended December 31, 2022

NET REVENUES

For the year ended December 31, 2023, Global Wealth Management net revenues increased 7.9% to $3.0 billion from $2.8 billion in 2022. The increase in net revenues is primarily attributable to increases in net interest income, asset management revenues, and principal transaction revenues, partially offset by lower commission revenues and investment banking revenues.

Commissions – For the year ended December 31, 2023, commission revenues decreased 6.1% to $444.9 million from $473.6 million in 2022. The decrease is primarily attributable to a decrease in equities trading and mutual funds revenue.

Principal transactions – For the year ended December 31, 2023, principal transactions revenues increased 7.2% to $209.3 million from $195.3 million in 2022.

Transactional revenues – For the year ended December 31, 2023, transactional revenues decreased 2.2% to $654.2 million from $668.9 million in 2023 as a result of a decrease in client activity amid uncertainty in the markets, partially offset by an increase in fixed income revenue as our rates business began to rebound in the fourth quarter from the weakness tied to the bank failures, higher rates, and an inverted yield curve.

Asset management – For the year ended December 31, 2023, asset management revenues increased 2.9% to $1.30 billion from $1.26 billion in 2022. The increase 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 of the prior quarter.

The value of assets in fee-based accounts at December 31, 2023, increased 14.0% to $165.3 billion from $145.0 billion at December 31, 2022.

Interest revenue– For the year ended December 31, 2023, interest revenue increased 75.2% to $1.9 billion from $1.1 billion in 2022. The increase is primarily attributable to higher interest-earning assets and higher interest rates. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table below for additional information on Stifel Bancorp’s average balances and interest income and expense.

Investment banking – Investment banking decreased 14.5% to $16.7 million for the year ended December 31, 2023, from $19.5 million in 2022. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in investment banking revenues.

Other income – For the year ended December 31, 2023, other income decreased 33.9% to a loss of $6.9 million from a loss of $5.2 million in 2022. The decrease is primarily attributable to losses on the sale of investments in the first quarter of 2023 and a decrease in loan origination fees.

Interest expense – For the year ended December 31, 2023, interest expense increased 323.8% to $775.2 million from $182.9 million in 2022. The increase in interest expense is primarily attributable to higher interest rates and higher interest-bearing liabilities. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table below for additional information on Stifel Bancorp’s average balances and interest income and expense.

41

NON-INTEREST EXPENSES

For the year ended December 31, 2023, Global Wealth Management non-interest expenses increased 4.3% to $1.83 billion from $1.76 billion in 2022.

Compensation and benefits – For the year ended December 31, 2023, compensation and benefits expense increased 3.4% to $1.42 billion from $1.37 billion in 2023. The increase is primarily attributable to increased variable compensation from our continued recruiting efforts.

Compensation and benefits expense as a percentage of net revenues was 46.4% for the year ended December 31, 2023, compared to 48.4% in 2022. The decrease is primarily as a result of higher net interest income, which is a relatively low compensatory revenue source.

Occupancy and equipment rental – For the year ended December 31, 2023, occupancy and equipment rental expense increased 8.3% to $165.8 million from $153.1 million in 2022. The increase is primarily attributable to higher occupancy and furniture and equipment costs and higher data processing costs associated with an increase in business activity.

Communications and office supplies – For the year ended December 31, 2023, communications and office supplies expense increased 4.2% to $63.3 million from $60.8 million in 2022. The increase is primarily attributable to higher postage and shipping expenses and communication and quote equipment expenses associated with the continued growth of our business.

Commissions and floor brokerage – For the year ended December 31, 2023, commissions and floor brokerage expense decreased 2.0% to $25.5 million from $26.0 million in 2023. The decrease is primarily attributable to lower clearing expenses.

Provision for credit losses – For the year ended December 31, 2023, provision for credit losses decreased 32.3% to $22.7 million from $33.5 million in 2022. Provision for credit losses was primarily impacted by a slightly better macroeconomic forecast, partially offset by a deterioration in certain asset classes.

Other operating expenses – For the year ended December 31, 2023, other operating expenses increased 21.7% to $141.7 million from $116.4 million in 2022. The increase is primarily attributable to increases in FDIC-insurance expense, travel and conference-related expenses, legal costs, and subscription expense, partially offset by lower advertising expense and professional fees.

INCOME BEFORE INCOME TAXES

For the year ended December 31, 2023, income before income taxes increased 13.9% to $1.2 billion from $1.1 billion in 2022. Profit margins (income before income taxes as a percent of net revenues) increased to 39.9% for the year ended December 31, 2023, from 37.8% in 2022. The improved profit margin is a result of strong revenue growth and our continued expense discipline, as well as a change in the composition of revenue (higher net interest income).

42

I. Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential

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):

[[GREPCENT_TABLE]]
[["","","For the Year Ended"],["","","December 31, 2024","","","December 31, 2023"],["","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate","","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate"],["Assets:"],["Interest-bearing cash and federal funds sold","","$","2,045,304","","","$","112,835","","","","5.52","%","","$","1,358,817","","","$","74,486","","","","5.48","%"],["U.S. government agencies","","","2,390","","","","50","","","","2.11","","","","2,359","","","","49","","","","2.10"],["State and municipal securities (tax-exempt) (1)","","","2,350","","","","71","","","","3.00","","","","2,350","","","","71","","","","3.00"],["Mortgage-backed securities","","","993,619","","","","26,368","","","","2.65","","","","963,414","","","","21,355","","","","2.22"],["Corporate fixed income securities","","","564,101","","","","15,469","","","","2.74","","","","624,079","","","","17,060","","","","2.73"],["Asset-backed securities","","","6,210,508","","","","442,176","","","","7.12","","","","6,143,333","","","","428,664","","","","6.98"],["Federal Home Loan Bank and other capital stock","","","65,553","","","","3,454","","","","5.27","","","","62,517","","","","2,602","","","","4.16"],["Loans (2)"],["Securities-based loans","","","2,292,176","","","","162,161","","","","7.07","","","","2,440,912","","","","170,699","","","","6.99"],["Commercial and industrial","","","3,734,097","","","","323,531","","","","8.66","","","","4,491,531","","","","378,277","","","","8.42"],["Fund banking","","","3,458,175","","","","273,907","","","","7.92","","","","4,256,903","","","","323,120","","","","7.59"],["Residential real estate","","","8,268,123","","","","291,376","","","","3.52","","","","7,731,478","","","","241,730","","","","3.13"],["Commercial real estate","","","612,374","","","","44,658","","","","7.29","","","","670,556","","","","49,715","","","","7.41"],["Home equity lines of credit","","","161,343","","","","13,490","","","","8.36","","","","116,668","","","","9,512","","","","8.15"],["Construction and land","","","1,176,660","","","","96,929","","","","8.24","","","","770,563","","","","63,134","","","","8.19"],["Other","","","50,389","","","","2,925","","","","5.80","","","","49,577","","","","3,193","","","","6.44"],["Loans held for sale","","","486,261","","","","41,071","","","","8.45","","","","210,446","","","","13,628","","","","6.48"],["Total interest-earning assets (3)","","$","30,123,423","","","$","1,850,471","","","","6.14","%","","$","29,895,503","","","$","1,797,295","","","","6.01","%"],["Cash and due from banks","","","20,633","","","","","","","","","","9,127"],["Other non-interest-earning assets","","","194,409","","","","","","","","","","140,958"],["Total assets","","$","30,338,465","","","","","","","","","$","30,045,588"],["Liabilities and stockholders\u2019 equity:"],["Deposits:"],["Money market","","$","25,581,967","","","$","814,527","","","","3.18","%","","$","24,967,085","","","$","632,251","","","","2.53","%"],["Time deposits","","","114,681","","","","5,995","","","","5.23","","","","2,535","","","","75","","","","2.95"],["Demand deposits","","","1,913,841","","","","67,920","","","","3.55","","","","2,297,253","","","","92,527","","","","4.03"],["Savings","","","1,236","","","","11","","","","0.88","","","","556","","","","4","","","","0.72"],["Federal Home Loan Bank advances","","","1","","","","0","","","","2.15","","","","1,371","","","","68","","","","4.99"],["Other borrowings","","","82,315","","","","5,891","","","","7.16","","","","19,076","","","","1,725","","","","9.04"],["Total interest-bearing liabilities (3)","","$","27,694,041","","","$","894,344","","","","3.23","%","","$","27,287,876","","","$","726,650","","","","2.66","%"],["Non-interest-bearing deposits","","","372,601","","","","","","","","","","382,686"],["Other non-interest-bearing liabilities","","","141,080","","","","","","","","","","153,543"],["Total liabilities","","$","28,207,722","","","","","","","","","$","27,824,105"],["Stockholders\u2019 equity","","","2,130,743","","","","","","","","","","2,221,483"],["Total liabilities and stockholders\u2019 equity","","$","30,338,465","","","","","","","","","$","30,045,588"],["Net interest income/spread","","","","","$","956,127","","","","2.91","%","","","","","$","1,070,645","","","","3.35","%"],["Net interest margin","","","","","","","","","3.17","%","","","","","","","","","3.58","%"]]
[[/GREPCENT_TABLE]]

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

(2)
Loans on nonaccrual status are included in average balances.

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

43

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31, 2022"],["","","Average Balance","","","Interest Income/ Expense","","","Average Interest Rate"],["Assets:"],["Interest-bearing cash and federal funds sold","","$","603,840","","","$","13,915","","","","2.30","%"],["U.S. government agencies","","","2,493","","","","42","","","","1.70"],["State and municipal securities (tax-exempt) (1)","","","2,361","","","","49","","","","2.06"],["Mortgage-backed securities","","","1,008,770","","","","19,840","","","","1.97"],["Corporate fixed income securities","","","724,184","","","","19,627","","","","2.71"],["Asset-backed securities","","","5,932,662","","","","208,197","","","","3.51"],["Federal Home Loan Bank and other capital stock","","","62,339","","","","2,612","","","","4.19"],["Loans (2)"],["Securities-based loans","","","2,879,651","","","","106,758","","","","3.71"],["Commercial and industrial","","","4,784,928","","","","241,792","","","","5.05"],["Fund banking","","","3,750,297","","","","160,780","","","","4.29"],["Residential real estate","","","6,517,911","","","","175,545","","","","2.69"],["Commercial real estate","","","649,663","","","","28,937","","","","4.45"],["Home equity lines of credit","","","98,120","","","","4,627","","","","4.72"],["Construction and land","","","508,676","","","","24,624","","","","4.84"],["Other","","","39,391","","","","1,873","","","","4.75"],["Loans held for sale","","","228,414","","","","7,337","","","","3.21"],["Total interest-earning assets (3)","","$","27,793,700","","","$","1,016,555","","","","3.66","%"],["Cash and due from banks","","","15,954"],["Other non-interest-earning assets","","","117,016"],["Total assets","","$","27,926,670"],["Liabilities and stockholders\u2019 equity:"],["Deposits:"],["Money market","","$","23,771,966","","","$","125,816","","","","0.53","%"],["Time deposits","","","16,976","","","","456","","","","2.69"],["Demand deposits","","","1,327,711","","","","18,812","","","","1.42"],["Savings","","","53,751","","","","1,552","","","","2.89"],["Federal Home Loan Bank advances","","","238,508","","","","4,094","","","","1.72"],["Other borrowings","","","966","","","","141","","","","14.63"],["Total interest-bearing liabilities (3)","","$","25,409,878","","","$","150,871","","","","0.59","%"],["Non-interest-bearing deposits","","","515,767"],["Other non-interest-bearing liabilities","","","108,896"],["Total liabilities","","$","26,034,541"],["Stockholders\u2019 equity","","","1,892,129"],["Total liabilities and stockholders\u2019 equity","","$","27,926,670"],["Net interest income/spread","","","","","$","865,684","","","","3.07","%"],["Net interest margin","","","","","","","","","3.11","%"]]
[[/GREPCENT_TABLE]]

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

(2)
Loans on nonaccrual status are included in average balances.

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

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 year ended December 31, 2024, interest revenue for Stifel Bancorp of $1.9 billion was generated from weighted-average interest-earning assets of $30.1 billion at a weighted-average interest rate of 6.14%. For the year ended December 31, 2023, interest revenue for Stifel Bancorp of $1.8 billion was generated from weighted-average interest-earning assets of $29.9 billion at a weighted-average interest rate of 6.01%. For the year ended December 31, 2022, interest revenue for Stifel Bancorp of $1.0 billion was generated from weighted-average interest-earning assets of $27.8 billion at a weighted-average interest rate of 3.66%. Interest-earning assets principally consist of residential, commercial and industrial, fund banking, and securities-based loans, investment securities, and interest-bearing cash and federal funds sold.

44

For the year ended December 31, 2024, interest expense for Stifel Bancorp of $894.3 million was incurred from weighted-average interest-bearing liabilities of $27.7 billion at a weighted-average interest rate of 3.23%. For the year ended December 31, 2023, interest expense for Stifel Bancorp of $726.7 million was incurred from weighted-average interest-bearing liabilities of $27.3 billion at a weighted-average interest rate of 2.66%. For the year ended December 31, 2022, interest expense for Stifel Bancorp of $150.9 million was incurred from weighted-average interest-bearing liabilities of $25.4 billion at a weighted-average interest rate of 0.59%. Interest expense represents interest on customer money market accounts, time deposits, Federal Home Loan Bank advances, and other borrowings.

The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the periods indicated (in thousands):

[[GREPCENT_TABLE]]
[["","","Year Ended December 31, 2024 Compared to Year Ended December 31, 2023","","","Year Ended December 31, 2023 Compared to Year Ended December 31, 2022"],["","","Increase (decrease) due to:","","","Increase (decrease) due to:"],["","","Volume","","","Rate","","","Total","","","Volume","","","Rate","","","Total"],["Interest income:"],["Interest-bearing cash and federal funds sold","","$","37,869","","","$","480","","","$","38,349","","","$","28,807","","","$","31,764","","","$","60,571"],["U.S. government agencies","","","1","","","","\u2014","","","","1","","","","(2",")","","","9","","","","7"],["State and municipal securities (tax-exempt)","","","\u2014","","","","\u2014","","","","\u2014","","","","(1",")","","","23","","","","22"],["Mortgage-backed securities","","","688","","","","4,325","","","","5,013","","","","(830",")","","","2,345","","","","1,515"],["Corporate fixed income securities","","","(1,645",")","","","54","","","","(1,591",")","","","(2,738",")","","","171","","","","(2,567",")"],["Asset-backed securities","","","4,721","","","","8,791","","","","13,512","","","","7,647","","","","212,820","","","","220,467"],["Federal Home Loan Bank and other capital stock","","","131","","","","721","","","","852","","","","7","","","","(17",")","","","(10",")"],["Loans"],["Securities-based loans","","","(10,551",")","","","2,013","","","","(8,538",")","","","(13,273",")","","","77,214","","","","63,941"],["Commercial and industrial","","","(66,003",")","","","11,257","","","","(54,746",")","","","(13,825",")","","","150,310","","","","136,485"],["Fund banking","","","(64,059",")","","","14,846","","","","(49,213",")","","","24,215","","","","138,125","","","","162,340"],["Residential real estate","","","17,532","","","","32,114","","","","49,646","","","","35,506","","","","30,679","","","","66,185"],["Commercial real estate","","","(4,254",")","","","(803",")","","","(5,057",")","","","959","","","","19,819","","","","20,778"],["Home equity lines of credit","","","3,729","","","","249","","","","3,978","","","","1,006","","","","3,879","","","","4,885"],["Construction and land","","","33,451","","","","344","","","","33,795","","","","16,421","","","","22,089","","","","38,510"],["Other","","","53","","","","(321",")","","","(268",")","","","557","","","","763","","","","1,320"],["Loans held for sale","","","22,273","","","","5,170","","","","27,443","","","","(528",")","","","6,819","","","","6,291"],["","","$","(26,064",")","","$","79,240","","","$","53,176","","","$","83,928","","","$","696,812","","","$","780,740"],["Interest expense:"],["Deposits:"],["Money market","","$","15,921","","","$","166,355","","","$","182,276","","","$","6,639","","","$","499,796","","","$","506,435"],["Time deposits","","","5,819","","","","101","","","","5,920","","","","(431",")","","","50","","","","(381",")"],["Demand deposits","","","(14,371",")","","","(10,236",")","","","(24,607",")","","","20,921","","","","52,794","","","","73,715"],["Savings","","","6","","","","1","","","","7","","","","(880",")","","","(668",")","","","(1,548",")"],["Federal Home Loan Bank advances","","","(44",")","","","(24",")","","","(68",")","","","(8,424",")","","","4,398","","","","(4,026",")"],["Other borrowings","","","4,446","","","","(280",")","","","4,166","","","","1,617","","","","(33",")","","","1,584"],["","","$","11,777","","","$","155,917","","","$","167,694","","","$","19,442","","","$","556,337","","","$","575,779"]]
[[/GREPCENT_TABLE]]

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.

45

II. Investment in Debt Securities

The maturities and related weighted-average yields of our debt securities not carried at fair value at December 31, 2024, are as follows (in thousands, except rates):

[[GREPCENT_TABLE]]
[["","","Within 1 Year","","","1-5 Years","","","5-10 Years","","","After 10 Years","","","Total"],["Asset-backed securities","","$","\u2014","","","$","91,184","","","$","3,063,278","","","$","3,370,492","","","$","6,524,954"],["Weighted-average yield (1)","","","0.00","%","","","6.59","%","","","6.56","%","","","6.43","%","","","6.49","%"]]
[[/GREPCENT_TABLE]]

(1)
The weighted-average yield is computed using the expected maturity of each security weighted based on the amortized cost of each security.

III. Loan Portfolio

The following table presents the maturities of each major loan category in Stifel Bancorp’s loan portfolio held for investment for the periods indicated (in thousands):

[[GREPCENT_TABLE]]
[["","","Within 1 Year","","","1-5 Years","","","5-15 years","","","Over 15 Years","","","Total"],["Residential real estate","","$","\u2014","","","$","574","","","$","670,844","","","$","7,893,775","","","$","8,565,193"],["Commercial and industrial","","","358,772","","","","3,174,420","","","","528,837","","","","\u2014","","","","4,062,029"],["Fund banking","","","2,674,004","","","","1,173,804","","","","6,414","","","","\u2014","","","","3,854,222"],["Securities-based loans","","","2,314,649","","","","74,944","","","","\u2014","","","","\u2014","","","","2,389,593"],["Construction and land","","","598,676","","","","643,326","","","","\u2014","","","","\u2014","","","","1,242,002"],["Commercial real estate","","","355,807","","","","162,543","","","","573","","","","\u2014","","","","518,923"],["Home equity lines of credit","","","20,579","","","","13,803","","","","158,603","","","","865","","","","193,850"],["Other","","","31,345","","","","22,587","","","","\u2014","","","","1","","","","53,933"],["","","$","6,353,832","","","$","5,266,001","","","$","1,365,271","","","$","7,894,641","","","$","20,879,745"]]
[[/GREPCENT_TABLE]]

The sensitivity of loans with maturities in excess of one year at December 31, 2024, is as follows (in thousands):

[[GREPCENT_TABLE]]
[["Variable or adjusted-rate loans"],["Residential real estate","","$","6,642,079"],["Commercial and industrial","","","3,292,861"],["Fund banking","","","1,180,218"],["Securities-based loans","","","68,874"],["Construction and land","","","643,326"],["Commercial real estate","","","151,616"],["Home equity lines of credit","","","173,271"],["Other","","","22,587"],["","","$","12,174,832"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["Fixed-rate loans"],["Residential real estate","","$","1,923,114"],["Commercial and industrial","","","410,396"],["Fund banking","","","\u2014"],["Securities-based loans","","","6,070"],["Construction and land","","","\u2014"],["Commercial real estate","","","11,500"],["Home equity lines of credit","","","\u2014"],["Other","","","1"],["","","$","2,351,081"]]
[[/GREPCENT_TABLE]]

46

The following table presents the Company’s credit ratios, as well as the component of the ratio’s calculation, for the periods indicated (in thousands, except percentages):

[[GREPCENT_TABLE]]
[["","","As of and for the year ending December 31,"],["","","2024","","","2023","","","2022"],["Allowance for credit losses to total loans outstanding","","","0.81","%","","","0.83","%","","","0.72","%"],["Allowance for credit losses","","$","170,044","","","$","161,605","","","$","147,853"],["Retained loans outstanding","","$","20,879,745","","","$","19,441,467","","","$","20,602,558"],["Nonaccrual loans to total loans outstanding","","","0.77","%","","","0.22","%","","","0.05","%"],["Nonaccrual loans","","$","160,900","","","$","42,366","","","$","10,102"],["Retained loans outstanding","","$","20,879,745","","","$","19,441,467","","","$","20,602,558"],["Allowance for credit losses to nonaccrual loans","","1.06x","","","3.83x","","","14.64x"],["Allowance for credit losses","","$","170,044","","","$","161,605","","","$","147,853"],["Nonaccrual loans","","$","160,900","","","$","42,366","","","$","10,102"]]
[[/GREPCENT_TABLE]]

The following table presents net charge-offs to average loans outstanding by major loan category for the year ended December 31, 2024 (in thousands, except percentages):

[[GREPCENT_TABLE]]
[["Residential real estate","","","0.00","%"],["Net charge-off during the period","","$","\u2014"],["Average amount outstanding","","$","8,268,123"],["Commercial and industrial","","","0.29","%"],["Net charge-off during the period","","$","10,688"],["Average amount outstanding","","$","3,734,097"],["Fund banking","","","0.00","%"],["Net charge-off during the period","","$","\u2014"],["Average amount outstanding","","$","3,458,175"],["Securities-based loans","","","0.00","%"],["Net charge-off during the period","","$","\u2014"],["Average amount outstanding","","$","2,292,176"],["Construction and land","","","0.57","%"],["Net charge-off during the period","","$","6,760"],["Average amount outstanding","","$","1,176,660"],["Commercial real estate","","","0.28","%"],["Net charge-off during the period","","$","1,690"],["Average amount outstanding","","$","612,374"],["Home equity lines of credit","","","0.00","%"],["Net charge-off during the period","","$","\u2014"],["Average amount outstanding","","$","161,343"],["Other","","","0.32","%"],["Net charge-off during the period","","$","159"],["Average amount outstanding","","$","50,389"],["Total retained loans","","","0.10","%"],["Net charge-off during the period","","$","19,297"],["Average amount outstanding","","$","19,753,337"]]
[[/GREPCENT_TABLE]]

47

Allocation of the Allowance for Loan Losses

The following is a breakdown of the allowance for loan losses by each major loan category at December 31, 2024 and 2023 (in thousands, except rates):

[[GREPCENT_TABLE]]
[["","","December 31, 2024","","","December 31, 2023"],["","","Balance","","","Percent (1)","","","Balance","","","Percent (1)"],["Commercial and industrial","","$","92,698","","","","19.5","%","","$","67,077","","","","18.3","%"],["Construction and land","","","12,866","","","","5.9","","","","11,817","","","","5.3"],["Residential real estate","","","11,061","","","","41.0","","","","13,855","","","","41.4"],["Fund banking","","","10,792","","","","18.5","","","","10,173","","","","18.7"],["Commercial real estate","","","8,057","","","","2.5","","","","21,386","","","","3.4"],["Securities-based loans","","","2,917","","","","11.4","","","","3,035","","","","11.9"],["Home equity lines of credit","","","317","","","","0.9","","","","371","","","","0.7"],["Other","","","600","","","","0.3","","","","578","","","","0.3"],["","","$","139,308","","","","100.0","%","","$","128,292","","","","100.0","%"]]
[[/GREPCENT_TABLE]]

(1)
Loan category as a percentage of total loan portfolio.

A loan is determined to be impaired usually 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 (“nonaccrual status”) and any accrued and unpaid interest income is reversed.

Please refer to the section entitled “Critical Accounting Policies and Estimates” herein regarding our policies for establishing loan loss reserves, including placing loans on nonaccrual status.

IV. Deposits

Deposits consist of money market and savings accounts, certificates of deposit, and demand deposits. The average balances of deposits and the associated weighted-average interest rates for the periods indicated are as follows (in thousands, except percentages):

[[GREPCENT_TABLE]]
[["","","December 31, 2024","","","December 31, 2023","","","December 31, 2022"],["","","Average Balance","","","Average Interest Rate","","","Average Balance","","","Average Interest Rate","","","Average Balance","","","Average Interest Rate"],["Non-interest bearing demand deposits","","$","372,601","","","*","","","$","382,686","","","*","","","$","515,767","","","*"],["Interest-bearing demand deposits","","","1,913,841","","","","3.55","%","","","2,297,253","","","","4.03","%","","","1,327,711","","","","1.42","%"],["Money Market and Savings deposits","","","25,583,203","","","","3.18","%","","","24,967,641","","","","2.53","%","","","23,825,717","","","","0.53","%"],["Time deposits","","","114,681","","","","5.23","%","","","2,535","","","","2.95","%","","","16,976","","","","2.69","%"],["Other","","","82,316","","","","7.16","%","","","20,447","","","","8.77","%","","","239,474","","","","1.77","%"]]
[[/GREPCENT_TABLE]]

* Not applicable.

48

Results of Operations – Institutional Group

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

[[GREPCENT_TABLE]]
[["","","For the Year Ended December 31,","","","Percentage Change","","","As a Percentage of Net Revenues for the Year Ended December 31,"],["","","2024","","","2023","","","2022","","","2024 vs. 2023","","","2023 vs. 2022","","","2024","","","2023","","","2022"],["Revenues:"],["Commissions","","$","247,307","","","$","228,648","","","$","236,951","","","","8.2","%","","","(3.5",")%","","","15.5","%","","","18.6","%","","","15.4","%"],["Principal transactions","","","360,929","","","","281,158","","","","333,759","","","","28.4","","","","(15.8",")","","","22.7","","","","22.9","","","","21.7"],["Transactional revenues","","","608,236","","","","509,806","","","","570,710","","","","19.3","","","","(10.7",")","","","38.2","","","","41.5","","","","37.1"],["Capital raising","","","395,924","","","","248,987","","","","237,347","","","","59.0","","","","4.9","","","","24.9","","","","20.3","","","","15.5"],["Advisory","","","577,432","","","","465,588","","","","714,623","","","","24.0","","","","(34.8",")","","","36.3","","","","38.0","","","","46.5"],["Investment banking","","","973,356","","","","714,575","","","","951,970","","","","36.2","","","","(24.9",")","","","61.2","","","","58.3","","","","62.0"],["Interest","","","34,782","","","","24,025","","","","25,430","","","","44.8","","","","(5.5",")","","","2.2","","","","2.0","","","","1.7"],["Other income (1)","","","31,659","","","","12,680","","","","7,075","","","","149.7","","","","79.2","","","","1.9","","","","1.0","","","","0.4"],["Total revenues","","","1,648,033","","","","1,261,086","","","","1,555,185","","","","30.7","","","","(18.9",")","","","103.5","","","","102.8","","","","101.2"],["Interest expense","","","55,200","","","","34,769","","","","19,168","","","","58.8","","","","81.4","","","","3.5","","","","2.8","","","","1.2"],["Net revenues","","","1,592,833","","","","1,226,317","","","","1,536,017","","","","29.9","","","","(20.2",")","","","100.0","","","","100.0","","","","100.0"],["Non-interest expenses:"],["Compensation and benefits","","","959,602","","","","841,671","","","","929,606","","","","14.0","","","","(9.5",")","","","60.2","","","","68.6","","","","60.5"],["Occupancy and equipment rental","","","88,819","","","","85,644","","","","77,111","","","","3.7","","","","11.1","","","","5.6","","","","7.0","","","","5.0"],["Communication and office supplies","","","105,586","","","","100,831","","","","95,103","","","","4.7","","","","6.0","","","","6.6","","","","8.2","","","","6.2"],["Commissions and floor brokerage","","","35,665","","","","32,886","","","","31,769","","","","8.5","","","","3.5","","","","2.2","","","","2.7","","","","2.1"],["Other operating expenses","","","179,761","","","","163,185","","","","148,296","","","","10.2","","","","10.0","","","","11.4","","","","13.3","","","","9.7"],["Total non-interest expenses","","","1,369,433","","","","1,224,217","","","","1,281,885","","","","11.9","","","","(4.5",")","","","86.0","","","","99.8","","","","83.5"],["Income before income taxes","","$","223,400","","","$","2,100","","","$","254,132","","","nm","","","","(99.2",")%","","","14.0","%","","","0.2","%","","","16.5","%"]]
[[/GREPCENT_TABLE]]

(1)
Includes asset management revenues.

Year Ended December 31, 2024, Compared With Year Ended December 31, 2023

NET REVENUES

For the year ended December 31, 2024, Institutional Group net revenues increased 29.9% to $1.6 billion from $1.2 billion in 2023. The increase in net revenues is primarily attributable to higher capital-raising, advisory, and transactional revenues.

Commissions – For the year ended December 31, 2024, commission revenues increased 8.2% to $247.3 million from $228.6 million in 2023.

Principal transactions – For the year ended December 31, 2024, principal transactions revenues increased 28.4% to $360.9 million from $281.2 million in 2023.

Transactional revenues – For the year ended December 31, 2024, transactional revenues increased 19.3% to $608.2 million from $509.8 million in 2023.

For the year ended December 31, 2024, fixed income transactional revenues increased 27.4% to $393.0 million from $308.4 million in 2023. The increase in fixed income transactional revenues is primarily attributable to increased activity as a result of market volatility and higher trading gains.

For the year ended December 31, 2024, equity transactional revenues increased 6.9% to $215.2 million from $201.4 million in 2023. The increase in equity transactional revenues is primarily attributable to higher volumes.

Investment banking – For the year ended December 31, 2024, investment banking revenues increased 36.2% to $973.4 million from $714.6 million in 2023.

For the year ended December 31, 2024, capital-raising revenues increased 59.0% to $395.9 million from $249.0 million in 2023.

For the year ended December 31, 2024, equity capital-raising revenues increased 74.2% to $186.9 million from $107.3 million in 2023 driven by higher volumes.

For the year ended December 31, 2024, fixed income capital-raising revenues increased 47.6% to $209.0 million from $141.6 million in 2023. The increase is primarily attributable to an increase in our corporate debt issuance business.

49

For the year ended December 31, 2024, advisory revenues increased 24.0% to $577.4 million from $465.6 million in 2023. The increase is primarily attributable to higher levels of completed advisory transactions.

Interest income – For the year ended December 31, 2024, interest income increased 44.8% to $34.8 million from $24.0 million in 2023.

Other income – For the year ended December 31, 2024, other income increased 149.7% to $31.7 million from $12.7 million in 2023. The increase is primarily attributable to an increase in investment gains.

Interest expense – For the year ended December 31, 2024, interest expense increased 58.8% to $55.2 million from $34.8 million in 2023. The increase is primarily attributable to higher interest rates and an increase in inventory levels.

NON-INTEREST EXPENSES

For the year ended December 31, 2024, Institutional Group non-interest expenses increased 11.9% to $1.4 billion from $1.2 billion in 2023.

Compensation and benefits – For the year ended December 31, 2024, compensation and benefits expense increased 14.0% to $959.6 million from $841.7 million in 2023. The increase is driven by higher compensable revenues.

Compensation and benefits expense as a percentage of net revenues was 60.2% for the year ended December 31, 2024, compared to 68.6% in 2023. The decrease is primarily attributable to revenue growth.

Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 3.7% to $88.8 million from $85.6 million in 2023. The increase is attributable to higher furniture and equipment, repair and maintenance, and occupancy costs associated with continued investments in our business.

Communications and office supplies – For the year ended December 31, 2024, communications and office supplies expense increased 4.7% to $105.6 million from $100.8 million in 2023. The increase is primarily attributable to higher communication and quote expenses.

Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage increased 8.5% to $35.7 million from $32.9 million in 2023. The increase was primarily attributable to higher clearing expenses and ECN trading costs, partially offset by lower processing expenses.

Other operating expenses – For the year ended December 31, 2024, other operating expenses increased 10.2% to $179.8 million from $163.2 million in 2023. The increase is primarily attributable to higher investment banking transaction expenses, professional fees, and conference-related expenses, partially offset by lower litigation-related expenses, travel-related expenses, and taxes and licenses expense.

INCOME BEFORE INCOME TAXES

For the year ended December 31, 2024, income before income taxes for the Institutional Group segment increased to $223.4 million from $2.1 million in 2023. Profit margins (income before income taxes as a percentage of net revenues) have increased to 14.0% for the year ended December 31, 2024, from 0.2% in 2023 as a result of higher revenues.

Year Ended December 31, 2023, Compared With Year Ended December 31, 2022

NET REVENUES

For the year ended December 31, 2023, Institutional Group net revenues decreased 20.2% to $1.2 billion from $1.5 billion in 2022. The decrease in net revenues is primarily attributable to lower advisory revenues and fixed income transactional revenues, partially offset by an increase in capital-raising revenues and equity transactional revenues.

Commissions – For the year ended December 31, 2023, commission revenues decreased 3.5% to $228.6 million from $237.0 million in 2022.

Principal transactions – For the year ended December 31, 2023, principal transactions revenues decreased 15.8% to $281.2 million from $333.8 million in 2022.

Transactional revenues – For the year ended December 31, 2023, transactional revenues decreased 10.7% to $509.8 million from $570.7 million in 2022.

For the year ended December 31, 2023, fixed income transactional revenues decreased 16.7% to $308.4 million from $370.2 million in 2022. The decrease in fixed income transactional revenues is primarily attributable to decreased activity as a result of lower market volatility, compared with elevated levels in 2022, partially offset by higher trading gains.

For the year ended December 31, 2023, equity transactional revenues increased 0.4% to $201.4 million from $200.5 million in 2022. The increase in equity transactional revenues is primarily attributable to higher trading gains.

Investment banking – For the year ended December 31, 2023, investment banking revenues decreased 24.9% to $714.6 million from $952.0 million in 2022.

50

For the year ended December 31, 2023, capital-raising revenues increased 4.9% to $249.0 million from $237.3 million in 2022.

For the year ended December 31, 2023, equity capital-raising revenues increased 3.8% to $107.3 million from $103.4 million in 2022 driven by higher volumes.

For the year ended December 31, 2023, fixed income capital-raising revenues increased 5.8% to $141.6 million from $133.9 million in 2022. The increase is primarily attributable to an increase in our corporate debt issuance business.

For the year ended December 31, 2023, advisory revenues decreased 34.8% to $465.6 million from $714.6 million in 2022. The decrease is primarily attributable to lower levels of completed advisory transactions.

Interest income – For the year ended December 31, 2023, interest income decreased 5.5% to $24.0 million from $25.4 million in 2022.

Other income – For the year ended December 31, 2023, other income increased 79.2% to $12.7 million from $7.1 million in 2022. The increase is primarily attributable to an increase in investment gains.

Interest expense – For the year ended December 31, 2023, interest expense increased 81.4% to $34.8 million from $19.2 million in 2022. The increase is primarily attributable to higher interest rates and an increase in inventory levels.

NON-INTEREST EXPENSES

For the year ended December 31, 2023, Institutional Group non-interest expenses decreased 4.5% to $1.2 billion from $1.3 billion in 2022.

Compensation and benefits – For the year ended December 31, 2023, compensation and benefits expense decreased 9.5% to $841.7 million from $929.6 million in 2022. The decrease is driven by lower compensable revenues.

Compensation and benefits expense as a percentage of net revenues was 68.6% for the year ended December 31, 2023, compared to 60.5% in 2022. The increase is primarily attributable to lower compensable revenues.

Occupancy and equipment rental – For the year ended December 31, 2023, occupancy and equipment rental expense increased 11.1% to $85.6 million from $77.1 million in 2022. The increase is attributable to higher occupancy, furniture and equipment, and data processing costs associated with continued investments in our business.

Communications and office supplies – For the year ended December 31, 2023, communications and office supplies expense increased 6.0% to $100.8 million from $95.1 million in 2022. The increase is primarily attributable to higher communication and quote expenses, partially offset by lower telecommunication expenses.

Commissions and floor brokerage – For the year ended December 31, 2023, commissions and floor brokerage expense increased 3.5% to $32.9 million from $31.8 million in 2022. The increase was primarily attributable to higher ECN trading costs and processing expenses, partially offset by lower clearing expenses.

Other operating expenses – For the year ended December 31, 2023, other operating expenses increased 10.0% to $163.2 million from $148.3 million in 2022. The increase is primarily attributable to higher travel and entertainment expenses, settlement-related expenses, conference-related expenses, professional fees, and subscriptions, partially offset by lower litigation-related expenses and investment banking transaction expenses.

INCOME BEFORE INCOME TAXES

For the year ended December 31, 2023, income before income taxes for the Institutional Group segment decreased 99.2% to $2.1 million from $254.1 million in 2022. Profit margins (income before income taxes as a percentage of net revenues) decreased to 0.2% for the year ended December 31, 2023, from 16.5% in 2022 as a result of lower revenues and higher non-compensation operating expenses.

51

Results of Operations – Other Segment

The Other segment includes costs associated with investments made in the Company’s infrastructure and control environment and expenses related to the Company’s acquisition strategy. The following table presents financial information for our Other segment for the periods presented broken out between infrastructure growth-related expenses and acquisition-related expenses (in thousands, except percentages):

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[[/GREPCENT_TABLE]]

For the year ended December 31, 2024, non-interest expenses increased 2.1% to $596.4 million from $583.9 million in 2023. The increase is primarily attributable to an increase in variable compensation and the recording of severance costs during 2024 associated with workforce reductions in certain subsidiaries, partially offset by lower provisions for legal and regulatory matters. During the year ended December 31, 2023, we recorded $67.0 million related to provisions for legal and regulatory matters.

The expenses relating to the Company’s acquisition strategy are primarily attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, 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 ongoing business.

For the year ended December 31, 2024, non-interest expenses related to our acquisition strategy, included in the numbers presented in the table above, increased 12.0% to $70.8 million from $63.2 million in 2023.

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. Total assets of $39.9 billion at December 31, 2024, were up 5.7% over December 31, 2023. 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 December 31, 2024, our liabilities were comprised primarily of deposits of $29.1 billion at Stifel Bancorp, accounts payable and accrued expenses of $0.7 billion, senior notes, net of debt issuance costs, of $0.6 billion, payables to customers of $468.8 million at our broker-dealer subsidiaries, and accrued employee compensation of $790.2 million. To meet our obligations to clients and operating needs, we had $12.9 billion of cash or assets readily convertible into cash at December 31, 2024.

Cash Flow

Cash and cash equivalents decreased $0.7 billion to $2.6 billion at December 31, 2024, from $3.4 billion at December 31, 2023. Operating activities provided cash of $490.4 million primarily due to net income recognized in 2024 adjusted for non-cash activities. Investing activities used cash of $2.3 billion due to investment securities purchases, the growth of our loan portfolio, fixed asset purchases, and cash used to fund acquisitions, partially offset by proceeds from the sale and maturity of securities in our investment portfolio. Financing activities provided cash of $980.1 million primarily due to the increase in bank deposits, securities sold under agreements to repurchase, and securities loans, partially offset by the repayment of the Company’s 4.25% Senior Notes, which matured in the third quarter of 2024, dividends paid on our common and preferred stock, repurchases of our common stock, and tax payments related to shares withheld for stock-based compensation.

Liquidity and Capital Resources

Liquidity and capital are essential to our business. The primary goal of our liquidity management activities is to ensure adequate funding and liquidity to conduct our business over a range of economic and market environments, including times of broader industry or market

52

liquidity stress events, such as those which occurred in the banking industry during fiscal 2024. In times of market stress or uncertainty, we generally maintain higher levels of capital and liquidity, including increased cash levels at our bank subsidiaries, to ensure we have adequate funding to support our business and meet our clients’ needs. We seek to manage capital levels to support execution of our business strategy, provide financial strength to our subsidiaries, and maintain sustained access to the capital markets, while at the same time meeting our regulatory capital requirements, and conservative internal management targets.

Liquidity and capital resources are provided primarily through our business operations and financing activities. Financing activities could include bank borrowings, collateralized financing arrangements, new or enhanced deposit product offerings, or additional capital-raising activities under our “universal” shelf registration statement. We believe our existing assets, most of which are liquid in nature, together with funds generated from operations and available from committed and uncommitted financing facilities, provide adequate funds for continuing operations at current levels of activity in the short term. We also believe that we will be able to continue to meet our long-term cash requirements due to our strong financial position and ability to access capital from financial markets.

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, repurchase agreements, 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.

As of December 31, 2024, we had $39.9 billion in assets, $12.9 billion of which consisted of cash or assets readily convertible into cash as follows (in thousands):

[[GREPCENT_TABLE]]
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[[/GREPCENT_TABLE]]

As of December 31, 2024 and 2023, the amount of collateral by asset class is as follows (in thousands):

[[GREPCENT_TABLE]]
[["","","December 31, 2024","","","December 31, 2023"],["","","Contractual","","","Contingent","","","Contractual","","","Contingent"],["Cash and cash equivalents","","$","142,901","","","$","\u2014","","","$","185,195","","","$","\u2014"],["Financial instruments owned at fair value","","","657,984","","","","657,984","","","","417,644","","","","417,644"],["Investment portfolio (AFS & HTM)","","","\u2014","","","","3,019,850","","","","\u2014","","","","2,076,717"],["","","$","800,885","","","$","3,677,834","","","$","602,839","","","$","2,494,361"]]
[[/GREPCENT_TABLE]]

53

Liquidity Available From Subsidiaries

Liquidity is principally available to our company from Stifel and Stifel Bancorp.

Stifel is required to maintain net capital equal to the greater of $1 million or two percent of aggregate debit items arising from client transactions. Covenants in the Company’s committed financing facilities require the excess net capital of Stifel, our principal broker-dealer subsidiary, to be above a defined amount. At December 31, 2024, Stifel’s excess net capital exceeded the minimum requirement, as defined. There are also limitations on the amount of dividends that may be declared by a broker-dealer without FINRA approval. See Note 19 of the Notes to Consolidated Financial Statements for more information on the capital restrictions placed on our broker-dealer subsidiaries.

Stifel Bancorp may pay dividends to the parent company without prior approval by its regulator as long as the dividend does not exceed the sum of Stifel Bancorp’s current calendar year and the previous two calendar years’ retained net income and Stifel Bancorp maintains its targeted capital to risk-weighted assets ratios.

Although we have liquidity available to us from our other subsidiaries, the available amounts are not as significant as the amounts described above and, in certain instances, may be subject to regulatory requirements.

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 December 31, 2024, the maximum number of shares that may yet be purchased under this plan was 10.1 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.

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.

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.

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Liquidity stress testing (Firmwide) – 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 December 31, 2024, 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 its 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 its 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 December 31, 2024, available cash and highly liquid investments comprised approximately 17% 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 bank subsidiaries have not violated any internal liquidity policy limits.

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.

On September 14, 2023, we filed a “universal” shelf registration statement with the SEC pursuant to which we can issue debt, equity, and other capital instruments if and when necessary or perceived by us to be opportune. Subject to certain conditions, this registration statement will be effective through September 14, 2026.

Cash and Cash Equivalents – We held $2.6 billion of cash and cash equivalents at December 31, 2024, compared to $3.4 billion at December 31, 2023. Cash and cash equivalents provide immediate sources of funds to meet our liquidity needs.

Available-for-Sale Securities – We held $1.58 billion in available-for-sale investment securities at December 31, 2024, compared to $1.55 billion at December 31, 2023. As of December 31, 2024, the weighted-average life of the investment securities portfolio was approximately 1.3 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

55

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 source. 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”). Our core deposits are primarily comprised of money market deposit accounts, non-interest-bearing deposits, and CDs.

Deposits are primarily sourced by our multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into FDIC-insured interest-bearing accounts at our bank subsidiaries and various third-party banks. In addition to our historical sweep program, we offer the Stifel Smart Rate Program (“Smart Rate”), a high yield savings account that keeps our brokerage clients’ cash balances at Stifel affiliated banks through their securities accounts. Brokerage client deposits totaled $27.1 billion and $24.1 billion at December 31, 2024 and 2023, respectively, which includes $17.1 billion and $14.5 billion, respectively, of client cash in our Smart Rate program. The increase in money market deposits in 2024 was primarily driven by elevated client interest in the Smart Rate program. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table included in “Results of Operations – Global Wealth Management” for additional information on Stifel Bancorp’s average balances and interest income and expense.

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 an unsecured, committed bank line available.

Our uncommitted secured lines of credit at December 31, 2024, 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 $70.0 million during the year ended December 31, 2024. There are no compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are day-to-day and are generally utilized to finance certain fixed income securities. At December 31, 2024, we had no outstanding balances on our uncommitted secured lines of credit.

Federal Home Loan advances are floating-rate advances. The weighted average interest rates during the year ended December 31, 2024, on these advances was 2.15%. 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. At December 31, 2024, there were no Federal Home Loan advances.

Unsecured borrowings – On September 27, 2023, the Company and Stifel (the “Borrowers”) entered into an unsecured credit agreement with a syndicate of lenders led by Bank of America, N.A., as administrative agent (the “Credit Agreement”). Concurrently with, and conditional upon, the effectiveness of the Credit Agreement, all of the commitments under the Borrowers’ existing $500.0 million unsecured revolving credit facility agreement were terminated.

The Credit Agreement has a maturity date of September 27, 2028, and provides for a committed unsecured borrowing facility for maximum aggregate borrowings of up to $750.0 million, depending on the amount of outstanding borrowings of the Borrowers from time to time during the duration of the Credit Agreement. The interest rates on borrowings under the Credit Agreement are variable and based on the Secured Overnight Financing Rate.

The Borrowers can draw upon this line as long as certain restrictive covenants are maintained. Under the Credit Agreement, the Borrowers 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 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.

Upon the occurrence and during the continuation of an event of default, the Company’s obligations under the Credit Agreement may be accelerated and the lending commitments thereunder terminated. The Credit Agreement 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, change of control, and judgment defaults. At December 31, 2024, we had no advances on the Credit Facility and were in compliance with all covenants and currently do not expect any covenant violations.

Federal Home Loan Bank Advances and other secured financing – Stifel Bancorp has borrowing capacity with the Federal Home Loan Bank of $5.7 billion at December 31, 2024, and $64.5 million in federal funds agreements for the purpose of purchasing short-term funds should additional liquidity be needed. At December 31, 2024, there were no outstanding Federal Home Loan Bank advances. Stifel Bancorp is eligible to participate in the Federal Reserve’s discount window program; however, Stifel Bancorp does not view

56

borrowings from the Federal Reserve 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 Federal Reserve, and is secured by securities. Stifel Bancorp has borrowing capacity of $4.7 billion with the Federal Reserve’s discount window at December 31, 2024. Stifel Bancorp receives overnight funds from excess cash held in Stifel brokerage accounts, which are deposited into a money market account. These balances totaled $27.1 billion at December 31, 2024. At December 31, 2024, there was $29.0 billion in client money market and FDIC-insured product balances.

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”). 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. The 2014 Notes matured in July 2024.

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. 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 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.

Public Offering of Preferred Stock – 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.

We believe our existing assets, a significant portion 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. During 2024, the Company's received a credit rating upgraded from S&P Global Ratings to BBB, from BBB-, with a stable outlook.

Use of Capital Resources

On July 18, 2024, the Company’s 4.25% Senior Notes matured, resulting in the Company's decision to retire the $500.0 million outstanding balance given its significant liquidity position.

On August 1, 2024, the Company acquired Finance 500, Inc. (“Finance 500”) and CB Resource, Inc. (“CBR”), which operate as strategic partners under common ownership. Finance 500 is a brokerage and investment services provider focused on underwriting FDIC-insured Certificates of Deposit and fixed income securities trading. CBR integrates ERM, strategic and capital plan solutions, and industry analytics through its fully integrated tech-enabled platform. Consideration for this acquisition consisted of cash from operations.

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The Company’s Board of Directors approved a 10% increase in the quarterly dividend to $0.46 per common share starting in the first quarter of 2025.

During the year ended December 31, 2024, we repurchased $144.0 million, or 1.7 million shares, at an average price of $83.42 per share.

As part of our ongoing operations, we also enter into contractual arrangements that may require future cash payments, including certificates of deposit, lease obligations, and other contractual arrangements. See Notes 13 and 20 of the Notes to the Consolidated Financial Statements for information regarding our certificates of deposit and lease obligations, respectively. We have entered into investment commitments, lending commitments, and other commitments to extend credit for which we are unable to reasonably predict the timing of future payments. See Note 24 of the Notes to Consolidated Financial Statements for additional information.

The following table summarizes the activity related to our company’s note receivable from January 1, 2023 to December 31, 2024 (in thousands):

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We have paid $91.8 million in the form of upfront notes to financial advisors for transition pay during the year ended December 31, 2024. 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 years ended December 31, 2025, 2026, 2027, 2028, 2029, and thereafter, is $162.6 million, $126.4 million, $107.7 million, $94.3 million, $65.8 million, and $125.4 million, respectively. These estimates could change if we continue to grow our business through expansion or experience increased production levels.

We provide compensation to existing employees in the form of cash awards which are subject to ratable vesting terms with service requirements. We amortize these awards to compensation expense over the relevant service period of five years. We paid $67.3 million of restricted cash awards during the year ended December 31, 2023. At December 31, 2024, there was $57.7 million of cash awards, net, which is included in loans and advances to financial advisors and other employees, net in the consolidated statement of financial condition, which is expected to amortized over a weighted-average period of 4.2 years.

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 the Company’s common stock at a designated time in the future without cash payment by the associate and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units generally vest over the next one to ten years after issuance and are distributed at predetermined future payable dates once vesting occurs. Restricted stock awards are restricted as to sale or disposition. These restrictions lapse over the next one to two years.

At December 31, 2024, the total number of restricted stock units, Performance-based Restricted Stock Units (“PRSUs”), and restricted stock awards outstanding was 13.0 million, of which 11.5 million were unvested. At December 31, 2024, there was approximately $669.6 million of unrecognized compensation cost for all deferred awards, which is expected to be recognized over a weighted-average period of 2.5 years.

The future estimated compensation expense of the deferred awards, assuming current year forfeiture levels and static growth for the years ended December 31, 2025, 2026, 2027, 2028, 2029, and thereafter, is $222.3 million, $182.7 million, $122.6 million, $73.4 million, $33.4 million, and $35.2 million, respectively. These estimates could change if our forfeitures change from historical levels.

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,

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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, SNC, is subject to the regulatory supervision and requirements of CIRO.

At December 31, 2024, Stifel had net capital of $449.5 million, which was 37.4% of aggregate debit items and $425.5 million in excess of its minimum required net capital. At December 31, 2024, all of our broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule. At December 31, 2024, SNEL’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA. At December 31, 2024, our banking subsidiaries were considered well capitalized under the regulatory framework for prompt corrective action. At December 31, 2024, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the CIRO. See Note 19 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 a full description of these and other accounting policies, see Note 2 of the Notes to Consolidated Financial Statements.

Valuation of Financial Instruments

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

Trading securities owned and pledged and trading securities sold, but not yet purchased, are carried at fair value on the consolidated statements of financial condition, with unrealized gains and losses reflected on the consolidated statements of operations.

The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, or an exit price. The degree of judgment used in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices in active markets generally have more pricing observability and less judgment used in measuring fair value. Conversely, financial instruments rarely traded or not quoted have less pricing observability and are measured at fair value using valuation models that require more judgment. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, the characteristics specific to the transaction, and overall market conditions generally.

When available, we use observable market prices, observable market parameters, or broker or dealer quotes (bid and ask prices) to derive the fair value of financial instruments. In the case of financial instruments transacted on recognized exchanges, the observable market prices represent quotations for completed transactions from the exchange on which the financial instrument is principally traded.

A substantial percentage of the fair value of our trading securities and other investments owned, trading securities pledged as collateral, and trading securities sold, but not yet purchased, are based on observable market prices, observable market parameters, or derived from broker or dealer prices. The availability of observable market prices and pricing parameters can vary from product to product. Where available, observable market prices and pricing or market parameters in a product may be used to derive a price without requiring significant judgment. In certain markets, observable market prices or market parameters are not available for all products, and fair value is determined using techniques appropriate for each particular product. These techniques involve some degree of judgment.

For investments in illiquid or privately held securities that do not have readily determinable fair values, the determination of fair value requires us to estimate the value of the securities using the best information available. Among the factors we consider in determining the fair value of investments are the cost of the investment, terms and liquidity, developments since the acquisition of the investment, the sales price of recently issued securities, the financial condition and operating results of the issuer, earnings trends and consistency of operating cash flows, the long-term business potential of the issuer, the quoted market price of securities with similar quality and yield that are publicly traded, and other factors generally pertinent to the valuation of investments. In instances where a security is subject to transfer restrictions, the value of the security is based primarily on the quoted price of a similar security without restriction

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but may be reduced by an amount estimated to reflect such restrictions. The fair value of these investments is subject to a high degree of volatility and may be susceptible to significant fluctuation in the near term, and the differences could be material.

We have categorized our financial instruments measured at fair value into a three-level classification in accordance with Topic 820, “Fair Value Measurement and Disclosures.” Fair value measurements of financial instruments that use quoted prices in active markets for identical assets or liabilities are generally categorized as Level 1, and fair value measurements of financial instruments that have no direct observable levels are generally categorized as Level 3. All other fair value measurements of financial instruments that do not fall within the Level 1 or Level 3 classification are considered Level 2. The lowest level input that is significant to the fair value measurement of a financial instrument is used to categorize the instrument and reflects the judgment of management.

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. We have identified Level 3 financial instruments to include certain asset-backed securities, consisting of collateral loan obligation securities, that have experienced low volumes of executed transactions, certain corporate bonds and equity securities where there was less frequent or nominal market activity, investments in private equity funds, and auction rate securities for which the market has been dislocated and largely ceased to function. Our Level 3 asset-backed securities are valued using cash flow models that utilize unobservable inputs. Level 3 corporate bonds are valued using prices from comparable securities. Equity securities with unobservable inputs are valued using management’s best estimate of fair value, where the inputs require significant management judgment. Auction rate securities are valued based upon our expectations of issuer redemptions and using internal models.

Contingencies

We are involved in various pending and potential legal proceedings related to our business, including litigation, arbitration, and regulatory proceedings. Some of these matters involve claims for substantial amounts, including claims for punitive damages. We have, after consultation with outside legal counsel and consideration of facts currently known by management, recorded estimated losses in accordance with Topic 450 (“Topic 450”), “Contingencies,” to the extent that claims are probable of loss and the amount of the loss can be reasonably estimated. The determination of the amount to accrue requires us to use significant judgment, and our final liabilities may ultimately be materially different. This determination is inherently subjective, as it requires estimates that are subject to potentially significant revision as more information becomes available and due to subsequent events. In making these determinations, we consider many factors, including, but not limited to, the loss and damages sought by the plaintiff or claimant, the basis and validity of the claim, the likelihood of a successful defense against the claim, and the potential for, and magnitude of, damages or settlements from such pending and potential litigation and arbitration proceedings, and fines and penalties or orders from regulatory agencies. See “Item 3 – Legal Proceedings” of this Form 10-K for information on our legal, regulatory, and arbitration proceedings.

Allowance for Credit Losses

The measurement of the allowance for credit losses, which includes the allowance for loan losses and the reserve for unfunded lending commitments, is based on management’s best estimate of lifetime expected credit losses inherent in our company’s relevant financial assets.

The expected credit losses on our loan portfolio are referred to as the allowance for loan losses and are reported separately as a contra-asset to loans on the consolidated statement of financial condition. 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 provision for loan losses related to the loan portfolio and the provision for unfunded lending commitments are reported in the consolidated statement of operations in provision for credit losses.

For loans, the expected credit loss is typically estimated using quantitative methods that consider a variety of factors, such as historical loss experience derived from proxy data, the current credit quality of the portfolio, as well as an economic outlook over the life of the loan. The life of the loan for closed-ended products is based on the contractual maturity of the loan adjusted for any expected prepayments. The contractual maturity includes any extension options that are at the sole discretion of the borrower. For open-ended products, the expected credit loss is determined based on the maximum repayment term associated with future draws from credit lines.

In our loss forecasting framework, we incorporate forward-looking information using macroeconomic scenarios applied over the forecasted life of the assets. These macroeconomic scenarios include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, real estate prices, gross domestic product levels, corporate bond spreads, and long-term interest rate forecasts. To estimate losses for contractual periods that extend beyond the forecast horizon, we revert to an average historical loss experience. As any one economic outlook is inherently uncertain, we leverage multiple scenarios. The scenarios that are chosen each quarter and the amount of weighting given to each scenario depend on a variety of factors, including recent economic events, leading economic indicators, and industry trends. The reserve for unfunded lending commitments is estimated using the same scenarios, models, and economic data as the loan portfolio.

The allowance for loan losses includes adjustments for qualitative reserves based on our company’s assessment that may not be adequately represented in the quantitative methods or the economic assumptions described above. For example, factors that we consider

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include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and nonaccrual loans, the effect of external factors such as competition, and legal and regulatory requirements, among others. Further, we consider the inherent uncertainty in quantitative models that are built on historical data. As a result of the uncertainty inherent in the quantitative models, other quantitative and qualitative factors are considered in adjusting allowance amounts, including, but not limited to, the following: model imprecision, imprecision in macroeconomic scenario forecasts, or changes in the economic environment affecting specific portfolio segments that deviate from the macroeconomic forecasts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Depending on changes in circumstances, future assessments of credit risk may yield materially different results from the prior estimates, which may require an increase or a decrease in the allowance for loan losses.

As described above, the process to determine the allowance for credit losses requires numerous estimates and assumptions, some of which require a high degree of judgment and are often interrelated. Changes in the estimates and assumptions can result in significant changes in the allowance for credit losses. Our process for determining the allowance for credit losses is discussed in Note 2 of the Notes to Consolidated Financial Statements.

Income Taxes

The provision for income taxes and related tax reserves is based on our consideration of known liabilities and tax contingencies for multiple taxing authorities. Known liabilities are amounts that will appear on current tax returns, amounts that have been agreed to in revenue agent revisions as the result of examinations by the taxing authorities, and amounts that will follow from such examinations but affect years other than those being examined. Tax contingencies are liabilities that might arise from a successful challenge by the taxing authorities taking a contrary position or interpretation regarding the application of tax law to our tax return filings. Factors considered in estimating our liability are results of tax audits, historical experience, and consultation with tax attorneys and other experts.

Accounting Standards Codification (“ASC”) Topic 740 (“Topic 740”), “Income Taxes,” clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribed recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, Topic 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

Goodwill and Intangible Assets

Under the provisions of ASC Topic 805, “Business Combinations,” we record all assets and liabilities acquired in purchase acquisitions, including goodwill and other intangible assets, at fair value. Determining the fair value of assets and liabilities requires certain estimates.

Goodwill for certain acquisitions is deductible for tax purposes. The amortization of goodwill for tax purposes creates a cash tax savings due to a reduction in the current taxes payable. We have recorded cash tax savings for the year ending December 31, 2024, of $11.0 million and anticipate cumulative future cash savings of $82.4 million as of result of the tax amortization of goodwill.

In accordance with ASC Topic 350, “Intangibles – Goodwill and Other,” indefinite-life intangible assets and goodwill are not amortized. Rather, they are subject to impairment testing on an annual basis, or more often if events or circumstances indicate there may be impairment. This test involves assigning tangible assets and liabilities as well as identified intangible assets and goodwill to reporting units and comparing the fair value of each reporting unit to its carrying amount. If the fair value is less than the carrying amount, a further test is required to measure the amount of the impairment.

We test goodwill for impairment on an annual basis as of October 1 and on an interim basis when certain events or circumstances exist. Evaluating goodwill for impairment requires management to make significant judgments, including, in part, the use of unobservable inputs that are subject to uncertainty. Goodwill impairment tests are performed at the reporting unit level, which is generally at the level of or one level below our business segments. Goodwill no longer retains its association with a particular acquisition once it has been assigned to a reporting unit. As such, all the activities of a reporting unit, whether acquired or organically developed, are available to support the value of the goodwill.

For both the annual and interim tests, we have the option to either (i) perform a quantitative impairment test or (ii) first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, in which case the quantitative test would be performed.

When performing a quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying amount, the goodwill impairment loss is equal to the excess of the carrying value over the fair value, limited by the carrying amount of goodwill allocated to that reporting unit.

The carrying value of each reporting unit is determined based on the capital allocated to the reporting unit. The estimated fair value of the reporting units is derived based on valuation techniques we believe market participants would use for each of the reporting units.

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The estimated fair value is generally determined by utilizing a discounted cash flow methodology. In certain instances, we may also utilize methodologies that incorporate price-to-book and price-to-earnings multiples of certain comparable companies.

The discounted cash flow methodology uses projected future cash flows based on the reporting units’ earnings forecast. The discount rate used represents an estimate of the cost of capital for that reporting unit.

At each annual goodwill impairment testing date, each of our reporting units with goodwill had a fair value that was in excess of its carrying value.

Identifiable intangible assets, which are amortized over their estimated useful lives, are tested for potential impairment whenever events or changes in circumstances suggest that the carrying value of an asset or asset group may not be fully recoverable.

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 24 of the Notes to Consolidated Financial Statements. Such information is hereby incorporated by reference.

Dilution

As of December 31, 2024, there were 13,011,376 outstanding restricted stock units, PRSUs, and restricted stock 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 associate 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 two years. Of the outstanding restricted stock units, PRSUs, and restricted stock awards, 1,478,845 shares are currently vested and 11,532,531 are unvested. Assuming vesting requirements are met, the Company anticipates that 2,818,608 shares under these awards will be distributed in 2025, 2,505,040 will vest in 2026, 2,185,804 will vest in 2027, and the balance of 4,023,079 will be distributed thereafter.

An associate will realize income as a result of an award of stock units at the time shares are distributed in an amount equal to the fair market value of the shares at that time, and we are entitled to a corresponding tax deduction in the year of vesting in some instances, or delivery in other instances. Unless an associate elects to satisfy the withholding in another manner, either by paying the amount in cash or by delivering shares of Stifel Financial Corp. common stock already owned by the individual for at least six months, we may satisfy tax withholding obligations on income associated with the grants by reducing the number of shares otherwise deliverable in connection with the awards. The reduction will be calculated based on a current market price of our common stock. Based on current tax law, we anticipate that the shares issued when the awards are paid to the associates will be reduced by approximately 35% to satisfy the maximum withholding obligations, so that approximately 65% of the total restricted stock units that are distributable in any particular year will be converted into issued and outstanding shares.

It has been our practice historically to satisfy almost all tax withholding obligations on income associated with the grants by reducing the number of shares otherwise deliverable in connection with the awards. We anticipate that practice will continue, as recently our Compensation Committee made a determination to satisfy tax withholding obligations through the cancellation of shares subject to an award. In addition, the plan pursuant to which we issue restricted stock units and restricted stock awards permits us to elect to settle certain awards entirely in cash, and we may elect to do so as those awards vest and become deliverable.