STIFEL FINANCIAL CORP
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
SF$71.35-0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0000950170-24-092303
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-121838
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 233 previous paragraphs and 233 current paragraphs.
124 unchanged; 88 reworded; 21 added; 20 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
On July 18, 2024, the Company’s 4.25% Senior Notes matured resulting in the retirement of the $500.0 million outstanding balance.
Current report
Results for the three and nine months ended September 30, 2024
Current report
After holding the target federal funds rate steady for nearly 14 months, the Federal Reserve voted to cut rates by one half percent at its September 2024 meeting as their attention turned to addressing employment data, given the progress made on reducing underlying inflation in recent months. Projections of the federal funds rate released by the Federal Reserve in September indicate that the Federal Reserve expects rate decreases through the end of 2024, with further reductions in the coming year.
Current report
For the three months ended September 30, 2024, commission revenues increased 11.1% to $183.4 million from $165.1 million in the comparable period in 2023. For the nine months ended September 30, 2024, commission revenues increased 10.5% to $552.2 million from $500.0 million in the comparable period in 2023.
Current report
For the three months ended September 30, 2024, principal transactions revenues increased 19.4% to $137.1 million from $114.8 million in the comparable period in 2023. For the nine months ended September 30, 2024, principal transactions revenues increased 27.9% to $429.7 million from $336.1 million in the comparable period in 2023.
Current report
For the three months ended September 30, 2024, investment banking revenues increased 65.6% to $243.2 million from $146.9 million in the comparable period in 2023.
Current report
For the nine months ended September 30, 2024, investment banking revenues increased 31.4% to $690.4 million from $525.6 million in the comparable period in 2023.
Current report
Advisory revenues increased 15.3% to $387.5 million for the nine months ended September 30, 2024 from $336.2 million in the comparable period in 2023. The increase is primarily attributable to higher levels of completed advisory transactions.
Current report
For the three months ended September 30, 2024, other operating expenses decreased 22.3% to $129.9 million from $167.3 million during the comparable period in 2023. For the nine months ended September 30, 2024, other operating expenses decreased 4.7% to $350.4 million from $367.6 million during the comparable period in 2023.
Current report
Commissions – For the three months ended September 30, 2024, commission revenues increased 15.1% to $129.2 million from $112.3 million in the comparable period in 2023. For the nine months ended September 30, 2024, commission revenues increased 11.9% to $371.9 million from $332.3 million in the comparable period in 2023.
Current report
Principal transactions – For the three months ended September 30, 2024, principal transactions revenues increased 19.2% to $63.5 million from $53.2 million in the comparable period in 2023. For the nine months ended September 30, 2024, principal transactions revenues increased 18.0% to $179.9 million from $152.4 million in the comparable period in 2023.
Current report
Compensation and benefits expense as a percentage of net revenues was 48.7% and 49.0% for the three and nine months ended September 30, 2024, respectively, compared to 46.8% and 46.2% for the comparable periods in 2023. The increase is primarily attributable to higher compensable revenues over the comparable periods in 2023.
Current report
Commissions – For the three months ended September 30, 2024, commission revenues increased 2.7% to $54.2 million from $52.8 million in the comparable period in 2023. For the nine months ended September 30, 2024, commission revenues increased 7.6% to $180.3 million from $167.7 million in the comparable period in 2023.
Current report
Principal transactions – For the three months ended September 30, 2024, principal transactions revenues increased 19.5% to $73.6 million from $61.6 million in the comparable period in 2023. For the nine months ended September 30, 2024, principal transactions revenues increased 36.0% to $249.8 million from $183.6 million in the comparable period in 2023.
Current report
Transactional revenues –For the three months ended September 30, 2024, transactional revenues increased 11.7% to $127.8 million from $114.4 million in the comparable period in 2023. For the nine months ended September 30, 2024, transactional revenues increased 22.4% to $430.1 million from $351.3 million in the comparable period in 2023.
Current report
Investment banking– For the three months ended September 30, 2024, investment banking revenues increased 65.7% to $237.0 million from $143.0 million during the comparable period in 2023. For the nine months ended September 30, 2024, investment banking revenues increased 31.3% to $674.1 million from $513.5 million during the comparable period in 2023.
Current report
For the three months ended September 30, 2024, capital-raising revenues increased 119.0% to $100.1 million from $45.7 million in the comparable period in 2023. For the nine months ended September 30, 2024, capital-raising revenues increased 61.7% to $286.6 million from $177.3 million in the comparable period in 2023.
Current report
Interest – For the three months ended September 30, 2024, interest increased 70.5% to $10.0 million from $5.9 million in the comparable period in 2023. For the nine months ended September 30, 2024, interest increased 36.8% to $25.5 million from $18.6 million in the comparable period in 2023.
Current report
For the three months ended September 30, 2024, Institutional Group non-interest expenses increased 16.1% to $330.6 million from $284.7 million for the comparable period in 2023. For the nine months ended September 30, 2024, Institutional Group non-interest expenses increased 13.1% to $986.8 million from $872.7 million during the comparable period in 2023.
Current report
Commissions and floor brokerage – For the three months ended September 30, 2024, commissions and floor brokerage expense increased 17.3% to $9.2 million from $7.9 million during the comparable period in 2023. The increase is primarily attributable to higher ECN trading costs and clearing expenses. For the nine months ended September 30, 2024, commissions and floor brokerage expense increased 10.9% to $26.5 million from $23.9 million during the comparable period in 2023. The increase is primarily attributable to higher clearing expenses and ECN trading costs.
Current report
On July 18, 2024, the Company’s 4.25% Senior Notes matured resulting in the retirement of the $500.0 million outstanding balance.
Removed paragraphs (20)
Previous report
Results for the three and six months ended June 30, 2024
Previous report
We currently operate in a challenging and uncertain economic environment. Financial services companies continue to be affected by, among other things, market volatility, rapidly rising interest rates and inflationary pressures. The market environment in aggregate remained mixed, characterized by inflationary pressures and uncertainty regarding the future path of interest rates, which have remained persistently high. This environment has impacted our businesses, as discussed further in “Segment Results” herein, and, to the extent that it continues to remain uncertain, could adversely impact client confidence and related activity.
Previous report
We are monitoring the war and increased tensions in the Middle East and its impact on the regional economy, as well as on other world economies and the financial markets. Our direct exposure to Israel is limited. We have a small number of employees in Israel and we continue to support them.
Previous report
At its meetings in the second quarter of 2024, the Federal Reserve unanimously decided to hold the target federal funds rate steady at 5.25% to 5.50%, a 23-year high and the seventh consecutive meeting with no target rate change. While the market generally expected that the Federal Reserve would ease rates to some extent in 2024 given the strong performance of the U.S. economy and low unemployment levels, the Federal Reserve has held them at their current, more restrictive range since the outset of the year given higher than anticipated inflationary readings and the Federal Reserve’s desire for inflation to return to its 2% long-term target. The Federal Reserve’s median forecast currently projects one rate decrease during 2024, though this is subject to change and the market believes that these restrictive conditions will likely continue.
Previous report
For the three months ended June 30, 2024, commission revenues increased 10.9% to $183.3 million from $165.4 million in the comparable period in 2023. For the six months ended June 30, 2024, commission revenues increased 10.1% to $368.8 million from $334.9 million in the comparable period in 2023.
Previous report
For the three months ended June 30, 2024, principal transactions revenues increased 45.3% to $153.6 million from $105.7 million in the comparable period in 2023. For the six months ended June 30, 2024, principal transactions revenues increased 32.3% to $292.6 million from $221.2 million in the comparable period in 2023.
Previous report
For the three months ended June 30, 2024, investment banking revenues increased 39.8% to $233.3 million from $166.8 million in the comparable period in 2023.
Previous report
For the six months ended June 30, 2024, investment banking revenues increased 18.1% to $447.2 million from $378.7 million in the comparable period in 2023.
Previous report
Advisory revenues increased 4.9% to $250.7 million for the six months ended June 30, 2024 from $238.9 million in the comparable period in 2023. The increase is primarily attributable to higher levels of completed advisory transactions.
Previous report
Commissions – For the three months ended June 30, 2024, commission revenues increased 10.6% to $121.5 million from $109.8 million in the comparable period in 2023. For the six months ended June 30, 2024, commission revenues increased 10.3% to $242.7 million from $220.0 million in the comparable period in 2023.
Previous report
Principal transactions – For the three months ended June 30, 2024, principal transactions revenues increased 16.0% to $55.8 million from $48.1 million in the comparable period in 2023. For the six months ended June 30, 2024, principal transactions revenues increased 17.3% to $116.4 million from $99.2 million in the comparable period in 2023.
Previous report
Compensation and benefits expense as a percentage of net revenues was 49.0% and 49.2% for the three and six months ended June 30, 2024, respectively, compared to 46.7% and 46.0% for the comparable periods in 2023. The increase is primarily attributable to higher compensable revenues over the comparable periods in 2023.
Previous report
Commissions – For the three months ended June 30, 2024, commission revenues increased 11.4% to $61.9 million from $55.5 million in the comparable period in 2023. For the six months ended June 30, 2024, commission revenues increased 9.8% to $126.1 million from $114.9 million in the comparable period in 2023.
Previous report
Principal transactions – For the three months ended June 30, 2024, principal transactions revenues increased 69.8% to $97.7 million from $57.6 million in the comparable period in 2023. For the six months ended June 30, 2024, principal transaction revenues increased 44.4% to $176.2 million from $122.0 million in the comparable period in 2023.
Previous report
Transactional revenues –For the three months ended June 30, 2024, transactional revenues increased 41.1% to $159.6 million from $113.1 million in the comparable period in 2023. For the six months ended June 30, 2024, transactional revenues increased 27.6% to $302.3 million from $236.9 million in the comparable period in 2023.
Previous report
Investment banking– For the three months ended June 30, 2024, investment banking revenues increased 39.8% to $227.5 million from $162.8 million during the comparable period in 2023. For the six months ended June 30, 2024, investment banking revenues increased 18.0% to $437.2 million from $370.5 million during the comparable period in 2023.
Previous report
For the three months ended June 30, 2024, capital-raising revenues increased 28.3% to $96.1 million from $74.9 million in the comparable period in 2023. For the six months ended June 30, 2024, capital-raising revenues increased 41.8% to $186.5 million from $131.5 million in the comparable period in 2023.
Previous report
Interest – For the three months ended June 30, 2024, interest increased 25.4% to $9.2 million from $7.3 million in the comparable period in 2023. For the six months ended June 30, 2024, interest increased 21.3% to $15.5 million from $12.8 million in the comparable period in 2023.
Previous report
For the three months ended June 30, 2024, Institutional Group non-interest expenses increased 18.3% to $341.9 million from $289.1 million for the comparable period in 2023. For the six months ended June 30, 2024, Institutional Group non-interest expenses increased 11.6% to $656.2 million from $588.0 million during the comparable period in 2023.
Previous report
Commissions and floor brokerage – For the three months ended June 30, 2024, commissions and floor brokerage expense remained relatively consistent with the comparable period in 2023 at $7.9 million. For the six months ended June 30, 2024, commissions and floor brokerage expense increased 7.8% to $17.2 million from $16.0 million during the comparable period in 2023. The increase is primarily attributable to higher clearing expenses.
Reworded paragraphs (88)
Previous wording
On March 14, 2024, the Company announced it signed a definitive agreement to acquire 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 Deposits 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. We expect to close the acquisition in the third quarter of 2024.
Current wording
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 Deposits 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.
Previous wording
For the three months ended June 30, 2024, net revenues increased 15.9% to $1.2 billion from $1.1 billion during the comparable period in 2023. Net income available to common shareholders increased 24.7% to $156.0 million, or $1.41 per diluted common share for the three months ended June 30, 2024, compared to $125.0 million, or $1.10 per diluted common share during the comparable period in 2023.
Current wording
For the three months ended September 30, 2024, net revenues increased 17.2% to $1.2 billion from $1.0 billion during the comparable period in 2023. Net income available to common shareholders increased 153.5% to $149.2 million, or $1.34 per diluted common share for the three months ended September 30, 2024, compared to $58.8 million, or $0.52 per diluted common share during the comparable period in 2023.
Previous wording
For the six months ended June 30, 2024, net revenues increased 10.4% to $2.4 billion compared to $2.2 billion during the comparable period in 2023. Net income available to common shareholders increased 13.5% to $310.2 million, or $2.82 per diluted common share for the six months ended June 30, 2024, compared to $273.3 million, or $2.38 per diluted common share during the comparable period in 2023.
Current wording
For the nine months ended September 30, 2024, net revenues increased 12.6% to $3.6 billion compared to $3.2 billion during the comparable period in 2023. Net income available to common shareholders increased 38.3% to $459.4 million, or $4.16 per diluted common share for the nine months ended September 30, 2024, compared to $332.1 million, or $2.91 per diluted common share during the comparable period in 2023.
Previous wording
Our revenue growth was primarily attributable to higher investment banking, transactional, and asset management revenues, partially offset by lower net interest income.
Current wording
Our revenue growth was primarily attributable to higher investment banking, asset management, and transactional revenues, partially offset by lower net interest income.
Previous wording
For more information on economic and market conditions, and the potential effects of geopolitical events on our future results, refer to “Risk Factors” in the 2023 Form 10-K.
Current wording
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, refer to “Risk Factors” in the 2023 Form 10-K.
Previous wording
While the Federal Reserve hasn’t eased rates in 2024, any future rate decreases to the federal funds rate may result in reduced interest-based revenues though any future federal funds rate increases may improve these revenues. While decreases in interest rates will lower fees the Company earns from FDIC-insured deposits of clients through a program offered by the Company, such decreases may be offset to a degree if the cash sweep balances increase as clients find fewer higher-yielding alternatives to deploy these balances. Future rate decreases will also reduce the rates the Company charges on margin balances which will have a negative impact on our earnings.
Current wording
Potential decreases to the federal funds rate may impact our interest-based revenues. While decreases in interest rates will lower fees the Company earns from FDIC insured deposits of clients through a program offered by the Company, such decreases may be offset to a degree if the cash sweep balances increase as clients find fewer higher-yielding alternatives to deploy these balances. Future rate decreases will also reduce the rates the Company charges on customer margin loans, which will have a negative impact on our earnings.
Previous wording
Transactional revenues – For the three months ended June 30, 2024, transactional revenues increased 24.3% to $336.9 million from $271.1 million in the comparable period in 2023. For the six months ended June 30, 2024, transactional revenues increased 18.9% to $661.4 million from $556.1 million in the comparable period in 2023 as a result of an increase in client activity.
Current wording
Transactional revenues – For the three months ended September 30, 2024, transactional revenues increased 14.5% to $320.5 million from $279.9 million in the comparable period in 2023. For the nine months ended September 30, 2024, transactional revenues increased 17.4% to $981.9 million from $836.0 million in the comparable period in 2023 as a result of an increase in client activity.
Previous wording
Capital-raising revenues increased 29.0% to $101.9 million for the three months ended June 30, 2024 from $79.0 million in the comparable period in 2023. For the three months ended June 30, 2024, equity capital-raising revenues increased 61.0% to $51.3 million from $31.9 million in the comparable period in 2023 driven by higher volumes during the quarter. For the three months ended June 30, 2024, fixed income capital-raising revenues increased 7.4% to $50.6 million from $47.1 million in the comparable period in 2023 driven by higher bond issuances during the quarter.
Current wording
Capital-raising revenues increased 114.3% to $106.3 million for the three months ended September 30, 2024 from $49.6 million in the comparable period in 2023. For the three months ended September 30, 2024, equity capital-raising revenues increased 141.7% to $54.6 million from $22.6 million in the comparable period in 2023 driven by higher volumes during the quarter. For the three months ended September 30, 2024, fixed income capital-raising revenues increased 91.4% to $51.7 million from $27.0 million in the comparable period in 2023 driven by higher bond issuances during the quarter.
Previous wording
Advisory revenues increased 49.5% to $131.4 million for the three months ended June 30, 2024 from $87.9 million in the comparable period in 2023. The increase is primarily attributable to higher levels of completed advisory transactions during the quarter.
Current wording
Advisory revenues increased 40.7% to $136.9 million for the three months ended September 30, 2024 from $97.3 million in the comparable period in 2023. The increase is primarily attributable to higher levels of completed advisory transactions during the quarter.
Previous wording
Capital-raising revenues increased 40.6% to $196.6 million for the six months ended June 30, 2024 from $139.8 million in the comparable period in 2023. For the six months ended June 30, 2024, equity capital-raising revenues increased 60.0% to $93.6 million from $58.5 million in the comparable period in 2023 driven by higher volumes. For the six months ended June 30, 2024, fixed income capital-raising revenues increased 26.7% to $103.0 million from $81.3 million in the comparable period in 2023 driven by higher bond issuances during 2024.
Current wording
Capital-raising revenues increased 59.9% to $302.9 million for the nine months ended September 30, 2024 from $189.4 million in the comparable period in 2023. For the nine months ended September 30, 2024, equity capital-raising revenues increased 82.7% to $148.2 million from $81.1 million in the comparable period in 2023 driven by higher volumes. For the nine months ended September 30, 2024, fixed income capital-raising revenues increased 42.9% to $154.7 million from $108.3 million in the comparable period in 2023 driven by higher bond issuances during 2024.
Previous wording
For the three months ended June 30, 2024, asset management revenues increased 18.9% to $380.8 million from $320.3 million in the comparable period in 2023. For the six months ended June 30, 2024, asset management revenues increased 17.7% to $748.2 million from $635.8 million in the comparable period in 2023. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.
Current wording
For the three months ended September 30, 2024, asset management revenues increased 14.9% to $382.6 million from $333.1 million in the comparable period in 2023. For the nine months ended September 30, 2024, asset management revenues increased 16.7% to $1.1 billion from $969.0 million in the comparable period in 2023. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.
Previous wording
Other income – Other income primarily includes investment gains and losses, rental income, and loan originations fees. For the three months ended June 30, 2024, other income increased to $16.2 million from $0.9 million during the comparable period in 2023. The increase is primarily attributable to rental income generated from our aircraft engine leasing business, higher investment gains during the quarter, and an increase in loan origination fees. For the six months ended June 30, 2024, other income increased to $21.1 million from a loss of $1.4 million during the comparable period in 2023. The increase is primarily attributable to higher investment gains, rental income generated from our aircraft engine leasing business, and an increase in loan origination fees from the comparable period in 2023. The first quarter of 2023 was negatively impacted by losses on the sale of investments.
Current wording
Other income – Other income primarily includes investment gains and losses, rental income, and loan originations fees. For the three months ended September 30, 2024, other income increased to $18.7 million from $0.5 million during the comparable period in 2023. The increase is primarily attributable to rental income generated from our aircraft engine leasing business, higher investment gains during the quarter, and an increase in loan origination fees. For the nine months ended September 30, 2024, other income increased to $39.8 million from a loss of $0.9 million during the comparable period in 2023. The increase is primarily attributable to rental income generated from our aircraft engine leasing business, higher investment gains, and an increase in loan origination fees from the comparable period in 2023. The nine months ended September 30, 2023 was negatively impacted by losses on the sale of investments.
Previous wording
Net interest income – Net interest income is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest income is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. For the three months ended June 30, 2024, net interest income decreased 14.0% to $250.8 million from $291.7 million during the comparable period in 2023. For the six months ended June 30, 2024, net interest income decreased 14.5% to $503.0 million from $588.2 million during the comparable period in 2023.
Current wording
Net interest income – Net interest income is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest income is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. For the three months ended September 30, 2024, net interest income decreased 8.8% to $259.6 million from $284.7 million during the comparable period in 2023. For the nine months ended September 30, 2024, net interest income decreased 12.6% to $762.6 million from $872.9 million during the comparable period in 2023.
Previous wording
For the three months ended June 30, 2024, interest revenue increased 3.2% to $498.2 million from $482.8 million in the comparable period in 2023, principally as a result of higher interest rates, partially offset by a decrease in interest-earning assets. The average interest-earning assets of Stifel Bancorp decreased to $29.2 billion during the three months ended June 30, 2024 compared to $29.9 billion during the comparable period in 2023 at average interest rates of 6.22% and 5.96%, respectively.
Current wording
For the three months ended September 30, 2024, interest revenue increased 1.1% to $510.8 million from $505.2 million in the comparable period in 2023, principally as a result of higher interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $30.0 billion during the three months ended September 30, 2024 compared to $29.9 billion during the comparable period in 2023 at average interest rates of 6.26% and 6.21%, respectively.
Previous wording
For the six months ended June 30, 2024, interest revenue increased 7.6% to $1.0 billion from $934.3 million in the comparable period in 2023, principally as a result of higher interest rates and interest-earning assets.
Current wording
For the nine months ended September 30, 2024, interest revenue increased 5.3% to $1.5 billion from $1.4 billion in the comparable period in 2023, principally as a result of higher interest rates and interest-earning assets.
Previous wording
For the three months ended June 30, 2024, interest expense increased 29.4% to $247.3 million from $191.1 million during the comparable period in 2023. The increase is primarily attributable to higher interest rates, partially offset by lower interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp decreased to $26.8 billion during the three months ended June 30, 2024 compared to $27.2 billion during the comparable period in 2023 at average interest rates of 3.31% and 2.52%, respectively.
Current wording
For the three months ended September 30, 2024, interest expense increased 13.9% to $251.2 million from $220.5 million during the comparable period in 2023. The increase is primarily attributable to higher interest rates. The average interest-bearing liabilities of Stifel Bancorp increased to $27.6 billion during the three months ended September 30, 2024 compared to $27.2 billion during the comparable period in 2023 at average interest rates of 3.35% and 2.91%, respectively.
Previous wording
For the six months ended June 30, 2024, interest expense increased 45.0% to $502.0 million from $346.1 million in the comparable period in 2023. The increase is primarily attributable to higher interest rates and interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $27.3 billion during the six months ended June 30, 2024 compared to $27.2 billion during the comparable period in 2023 at average interest rates of 3.32% and 2.27%, respectively.
Current wording
For the nine months ended September 30, 2024, interest expense increased 32.9% to $753.2 million from $566.6 million in the comparable period in 2023. The increase is primarily attributable to higher interest rates and interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $27.4 billion during the nine months ended September 30, 2024 compared to $27.2 billion during the comparable period in 2023 at average interest rates of 3.33% and 2.49%, respectively.
Previous wording
For the three months ended June 30, 2024, compensation and benefits expense increased 17.4% to $722.7 million from $615.7 million during the comparable period in 2023. For the six months ended June 30, 2024, compensation and benefits expense increased 10.7% to $1.4 billion from $1.3 billion during the comparable period in 2023. The increase in compensation and benefits expenses is primarily attributable to higher compensable revenues.
Current wording
For the three months ended September 30, 2024, compensation and benefits expense increased 17.1% to $718.1 million from $613.3 million during the comparable period in 2023. For the nine months ended September 30, 2024, compensation and benefits expense increased 12.8% to $2.1 billion from $1.9 billion during the comparable period in 2023. The increase in compensation and benefits expenses is primarily attributable to increased variable compensation over the comparable periods in 2023.
Previous wording
Compensation and benefits expense as a percentage of net revenues was 59.3% and 58.9% for the three and six months ended June 30, 2024, respectively, compared to 58.6% and 58.7% for the three and six months ended June 30, 2023, respectively. The increase is primarily attributable to higher compensable revenues.
Current wording
Compensation and benefits expense as a percentage of net revenues was 58.6% and 58.8% for the three and nine months ended September 30, 2024, respectively, compared to 58.7% for the three and nine months ended September 30, 2023, respectively. The increase is primarily attributable to higher compensable revenues.
Previous wording
Occupancy and equipment rental – For the three months ended June 30, 2024, occupancy and equipment rental expense increased 6.2% to $89.9 million from $84.6 million during the comparable period in 2023. For the six months ended June 30, 2024, occupancy and equipment rental expense increased 7.1% to $178.6 million from $166.7 million during the comparable period in 2023. The increase is primarily attributable to higher data processing and occupancy costs associated with an increase in business activity over the comparable periods in 2023.
Current wording
Occupancy and equipment rental – For the three months ended September 30, 2024, occupancy and equipment rental expense increased 6.2% to $89.6 million from $84.4 million during the comparable period in 2023. For the nine months ended September 30, 2024, occupancy and equipment rental expense increased 6.8% to $268.2 million from $251.1 million during the comparable period in 2023. The increase is primarily attributable to higher data processing and occupancy costs associated with an increase in business activity over the comparable periods in 2023.
Previous wording
Communications and office supplies – Communications expense includes costs for telecommunication and data communication, primarily for obtaining third-party market data information. For the three months ended June 30, 2024, communications and office supplies expense increased 7.1% to $48.2 million from $45.0 million during the comparable period in 2023. For the six months ended June 30, 2024, communications and office supplies expense increased 4.9% to $95.5 million from $91.1 million during the comparable period in 2023. The increase is primarily attributable to higher communication and quote expenses associated with the continued investments made in our business.
Current wording
Communications and office supplies – Communications expense includes costs for telecommunication and data communication, primarily for obtaining third-party market data information. For the three months ended September 30, 2024, communications and office supplies expense increased 5.7% to $48.9 million from $46.2 million during the comparable period in 2023. For the nine months ended September 30, 2024, communications and office supplies expense increased 5.2% to $144.4 million from $137.3 million during the comparable period in 2023. The increase is primarily attributable to higher communication and quote expenses associated with the continued investments made in our business.
Previous wording
Commissions and floor brokerage – For the three months ended June 30, 2024, commissions and floor brokerage expense increased 1.9% to $14.4 million from $14.1 million during the comparable period in 2023. The increase is primarily attributable to higher clearing expenses and processing expenses, partially offset by lower electronic communication network (“ECN”) trading costs. For the six months ended June 30, 2024, commissions and floor brokerage expense increased 5.6% to $30.2 million from $28.6 million during the comparable period in 2023. The increase is primarily attributable to higher clearing expenses, processing expenses, and ECN trading costs.
Current wording
Commissions and floor brokerage – For the three months ended September 30, 2024, commissions and floor brokerage expense increased 12.7% to $16.2 million from $14.4 million during the comparable period in 2023. The increase is primarily attributable to higher electronic communication network (“ECN”) trading costs, clearing expenses, and processing expenses. For the nine months ended September 30, 2024, commissions and floor brokerage expense increased 8.0% to $46.4 million from $43.0 million during the comparable period in 2023. The increase is primarily attributable to higher clearing expenses, ECN trading costs, and processing expenses.
Previous wording
Provision for credit losses –For the three months ended June 30, 2024, provision for credit losses decreased 62.2% to $3.0 million from $7.8 million during the comparable period in 2023. For the six months ended June 30, 2024, provision for credit losses decreased 35.5% to $8.2 million from $12.7 million during the comparable period in 2023. The decrease is primarily attributable to reserve reductions in certain asset classes driven by an improved macroeconomic environment, partially offset by growth in our loan portfolio.
Current wording
Provision for credit losses –For the three months ended September 30, 2024, provision for credit losses decreased 47.1% to $5.3 million from $10.0 million during the comparable period in 2023. For the nine months ended September 30, 2024, provision for credit losses decreased 40.6% to $13.5 million from $22.7 million during the comparable period in 2023. The decrease is primarily attributable to lower provisions in the real estate sector, partially offset by growth in the loan portfolio.
Previous wording
For the six months ended June 30, 2024, other operating expenses increased 10.1% to $220.5 million from $200.2 million during the comparable period in 2023. The increase is primarily attributable to increases in professional fees, investment banking transaction expenses, advertising, travel and conference-related expenses, and litigation expense, partially offset by lower settlement-related expenses and FDIC-insurance expense.
Current wording
The decreases are primarily attributable to lower litigation-related expenses and FDIC-insurance expense, partially offset by higher investment banking transaction expenses, professional fees, advertising, and travel and conference-related expenses. During the third quarter of 2023, we recorded $67.0 million related to provisions for legal and regulatory matters.
Previous wording
Provision for income taxes – For the three and six months ended June 30, 2024, our provision for income taxes was $61.6 million and $116.7 million, representing an effective tax rate of 27.1% and 26.2%, respectively, compared to $47.0 million and $99.4 million for the comparable periods in 2023, representing an effective tax rate of 25.9% and 25.4%, respectively.
Current wording
Provision for income taxes – For the three and nine months ended September 30, 2024, our provision for income taxes was $58.2 million and $174.9 million, representing an effective tax rate of 26.8% and 26.4%, respectively, compared to $41.3 million and $140.6 million for the comparable periods in 2023, representing an effective tax rate of 37.7% and 28.1%, respectively. The effective tax rate for the three months ended September 30, 2023 was negatively impacted by the non-deductibility of the aforementioned provision for legal and regulatory matters recorded during the quarter.
Previous wording
For the three months ended June 30, 2024, Global Wealth Management net revenues increased 5.7% to a record $801.1 million from $758.2 million for the comparable period in 2023. For the six months ended June 30, 2024, Global Wealth Management net revenues increased 5.0% to a record $1.6 billion from $1.5 billion for the comparable period in 2023. The increase in net revenues over the comparable periods in 2023 is primarily attributable to increases in asset management, transactional, and investment banking revenues, partially offset by lower net interest income.
Current wording
For the three months ended September 30, 2024, Global Wealth Management net revenues increased 7.6% to a record $827.1 million from $768.6 million for the comparable period in 2023. For the nine months ended September 30, 2024, Global Wealth Management net revenues increased 5.9% to a record $2.4 billion from $2.3 billion for the comparable period in 2023. The increase in net revenues over the comparable periods in 2023 is primarily attributable to higher asset management revenues, transactional revenues, other income, and investment banking revenues, partially offset by lower net interest income.
Previous wording
Transactional revenues – For the three months ended June 30, 2024, transactional revenues increased 12.3% to $177.3 million from $158.0 million in the comparable period in 2023. For the six months ended June 30, 2024, transactional revenues increased 12.5% to $359.1 million from $319.2 million in the comparable period in 2023 as a result of an increase in client activity.
Current wording
Transactional revenues – For the three months ended September 30, 2024, transactional revenues increased 16.4% to $192.7 million from $165.5 million in the comparable period in 2023. For the nine months ended September 30, 2024, transactional revenues increased 13.8% to $551.8 million from $484.8 million in the comparable period in 2023 as a result of an increase in client activity.
Previous wording
Asset management – For the three months ended June 30, 2024, asset management revenues increased 18.9% to $380.7 million from $320.2 million in the comparable period in 2023. For the six months ended June 30, 2024, asset management revenues increased 17.7% to $748.2 million from $635.8 million in the comparable period in 2023. The increase is primarily attributable to higher asset values. Fee-based account revenues are primarily billed based on asset values at the end the prior quarter.
Current wording
Asset management – For the three months ended September 30, 2024, asset management revenues increased 14.8% to $382.3 million from $333.1 million in the comparable period in 2023. For the nine months ended September 30, 2024, asset management revenues increased 16.7% to $1.1 billion from $968.9 million in the comparable period in 2023. The increase is primarily attributable to higher asset values and net new assets. Fee-based account revenues are primarily billed based on asset values at the end the prior quarter.
Previous wording
Investment banking – Investment banking, which represents sales credits for investment banking underwritings, increased 42.2% to $5.8 million for the three months ended June 30, 2024 from $4.1 million during the comparable period in 2023. For the six months ended June 30, 2024, investment banking revenues increased 22.3% to $10.1 million from $8.2 million during the comparable period in 2023. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in net revenues.
Current wording
Investment banking – Investment banking, which represents sales credits for investment banking underwritings, increased 59.6% to $6.2 million for the three months ended September 30, 2024 from $3.9 million during the comparable period in 2023. For the nine months ended September 30, 2024, investment banking revenues increased 34.3% to $16.3 million from $12.1 million during the comparable period in 2023. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in net revenues.
Previous wording
Interest revenue – For the three months ended June 30, 2024, interest revenue increased 2.0% to $470.4 million from $461.0 million in the comparable period in 2023. For the six months ended June 30, 2024, interest revenue increased 6.6% to $950.7 million from $891.5 million during the comparable period in 2023. The increase is primarily attributable to higher interest rates, partially offset by lower interest-earning assets. Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest income.
Current wording
Interest revenue – For the three months ended September 30, 2024, interest revenue increased 0.8% to $484.2 million from $480.3 million in the comparable period in 2023. The increase is primarily attributable to higher interest rates. For the nine months ended September 30, 2024, interest revenue increased 4.6% to $1.43 billion from $1.37 billion during the comparable period in 2023. The increase is primarily attributable to higher interest rates, partially offset by lower interest-earning assets. Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest income.
Previous wording
Other income – For the three months ended June 30, 2024, other income increased 172.7% to $1.0 million from a loss of $1.4 million in the comparable period in 2023. The increase is primarily attributable to an increase in loan origination fees and improved investment gains during the quarter. For the six months ended June 30, 2024, other income increased 125.0% to $1.8 million from a loss of $7.1 million during the comparable period in 2023. The increase is primarily attributable to lower investment losses and an increase in loan origination fees. The six months ended June 30, 2023 was negatively impacted by losses on the sale of investments.
Current wording
Other income – For the three months ended September 30, 2024, other income increased 248.0% to $5.0 million from a loss of $3.4 million in the comparable period in 2023. For the nine months ended September 30, 2024, other income increased 164.8% to $6.8 million from a loss of $10.5 million during the comparable period in 2023. The increases are primarily attributable to lower investment losses and an increase in loan origination fees. The nine months ended September 30, 2023 was negatively impacted by losses on the sale of investments.
Previous wording
Interest expense – For the three months ended June 30, 2024, interest expense increased 27.5% to $234.1 million from $183.6 in the comparable period in 2023. The increase is primarily attributable to higher interest rates, partially offset by lower interest-bearing liabilities. For the six months ended June 30, 2024, interest expense increased 43.9% to $478.2 million from $332.2 million during the comparable period in 2023. The increase is primarily attributable to higher interest rates and higher interest-bearing liabilities. Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest income.
Current wording
Interest expense – For the three months ended September 30, 2024, interest expense increased 15.4% to $243.3 million from $210.9 in the comparable period in 2023. The increase is primarily attributable to higher interest rates and interest-bearing liabilities. For the nine months ended September 30, 2024, interest expense increased 32.8% to $721.5 million from $543.1 million during the comparable period in 2023. The increase is primarily attributable to higher interest rates and interest-bearing liabilities. Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest income.
Previous wording
The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the three and six month periods ended June 30, 2024 compared to the three and six month periods ended June 30, 2023(in thousands):
Current wording
The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the three and nine month periods ended September 30, 2024 compared to the three and nine month periods ended September 30, 2023(in thousands):
Previous wording
For the three months ended June 30, 2024, interest revenue of $454.9 million was generated from average interest-earning assets of $29.2 billion at an average interest rate of 6.22%. Interest revenue of $444.9 million for the comparable period in 2023 was generated from average interest-earning assets of $29.9 billion at an average interest rate of 5.96%.
Current wording
For the three months ended September 30, 2024, interest revenue of $469.1 million was generated from average interest-earning assets of $30.0 billion at an average interest rate of 6.26%. Interest revenue of $463.9 million for the comparable period in 2023 was generated from average interest-earning assets of $29.9 billion at an average interest rate of 6.21%.
Previous wording
For the six months ended June 30, 2024, interest revenue of $919.9 million was generated from average interest-earning assets of $29.7 billion at an average interest rate of 6.19%. Interest revenue of $860.0 million for the comparable period in 2023 was generated from average interest-earning assets of $29.8 billion at an average interest rate of 5.77%.
Current wording
For the nine months ended September 30, 2024, interest revenue of $1.4 billion was generated from average interest-earning assets of $29.8 billion at an average interest rate of 6.22%. Interest revenue of $1.3 billion million for the comparable period in 2023 was generated from average interest-earning assets of $29.8 billion at an average interest rate of 5.92%.
Previous wording
Interest expense represents interest on customer money market accounts, interest on time deposits, Federal Home Loan Bank advances, and other interest expense. For the three months ended June 30, 2024, interest expense of $222.0 million was incurred from average interest-bearing liabilities of $26.8 billion at an average interest rate of 3.31%. Interest expense of $171.5 million for the comparable period in 2023 was incurred from average interest-bearing liabilities of $27.2 billion at an average interest rate of 2.52%.
Current wording
Interest expense represents interest on customer money market accounts, interest on time deposits, Federal Home Loan Bank advances, and other interest expense. For the three months ended September 30, 2024, interest expense of $231.4 million was incurred from average interest-bearing liabilities of $27.6 billion at an average interest rate of 3.35%. Interest expense of $198.4 million for the comparable period in 2023 was incurred from average interest-bearing liabilities of $27.2 billion at an average interest rate of 2.91%.
Previous wording
For the six months ended June 30, 2024, interest expense of $453.1 million was incurred from average interest-bearing liabilities of $27.3 billion at an average interest rate of 3.32%. Interest expense of $308.9 million for the comparable period in 2023 was incurred from average interest-bearing liabilities of $27.2 billion at an average interest rate of 2.27%.
Current wording
For the nine months ended September 30, 2024, interest expense of $684.4 million was incurred from average interest-bearing liabilities of $27.4 billion at an average interest rate of 3.33%. Interest expense of $507.2 million for the comparable period in 2023 was incurred from average interest-bearing liabilities of $27.2 billion at an average interest rate of 2.49%.
Previous wording
For the three months ended June 30, 2024, Global Wealth Management non-interest expenses increased 9.5% to $502.0 million from $458.3 million for the comparable period in 2023. For the six months ended June 30, 2024, Global Wealth Management non-interest expenses increased 11.4% to $1.0 billion from $899.4 million for the comparable period in 2023.
Current wording
For the three months ended September 30, 2024, Global Wealth Management non-interest expenses increased 11.8% to $525.4 million from $470.1 million for the comparable period in 2023. For the nine months ended September 30, 2024, Global Wealth Management non-interest expenses increased 11.5% to $1.5 billion from $1.4 billion for the comparable period in 2023.
Previous wording
Compensation and benefits – For the three months ended June 30, 2024, compensation and benefits expense increased 11.0% to $392.9 million from $354.1 million during the comparable period in 2023. For the six months ended June 30, 2024, compensation and benefits expense increased 12.3% to $782.5 million from $696.5 million during the comparable period in 2023. The increase is primarily attributable to increased variable compensation over the comparable periods in 2023.
Current wording
Compensation and benefits – For the three months ended September 30, 2024, compensation and benefits expense increased 12.2% to $403.2 million from $359.3 million during the comparable period in 2023. For the nine months ended September 30, 2024, compensation and benefits expense increased 12.3% to $1.2 billion from $1.1 billion during the comparable period in 2023. The increase is primarily attributable to increased variable compensation over the comparable periods in 2023.
Previous wording
Occupancy and equipment rental – For the three months ended June 30, 2024, occupancy and equipment rental expense increased 10.3% to $44.2 million from $40.0 million during the comparable period in 2023. For the six months ended June 30, 2024, occupancy and equipment rental expense increased 7.4% to $87.5 million from $81.4 million during the comparable period in 2023. The increase is primarily attributable to higher data processing expense and occupancy costs over the comparable periods in 2023 associated with an increase in business activity.
Current wording
Occupancy and equipment rental – For the three months ended September 30, 2024, occupancy and equipment rental expense increased 4.4% to $43.1 million from $41.3 million during the comparable period in 2023. For the nine months ended September 30, 2024, occupancy and equipment rental expense increased 6.4% to $130.6 million from $122.7 million during the comparable period in 2023. The increase is primarily attributable to higher data processing expense and occupancy costs over the comparable periods in 2023 associated with an increase in business activity.
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Previous report — wording carried elsewhere
(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.