10-K 1 sf-20231231.htm 10-K 10-K
P8YP10Y457falseFYP10Y0000720672two yearsthree yearsJuly 31, 2024May 31, 2030October 31, 2047http://fasb.org/us-gaap/2023#OtherAssetshttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrenthttp://fasb.org/us-gaap/2023#OtherAssetshttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrenthttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrenthttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrenthttp://fasb.org/us-gaap/2023#AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrentone yearP1YP1YP2YP1YP1Y20000720672us-gaap:CollateralPledgedMember2022-12-310000720672us-gaap:RetainedEarningsMember2023-12-310000720672sf:ConstructionAndLandMember2022-12-310000720672sf:TwoThousandAndTwentyThreeCreditAgreementMember2023-09-270000720672sf:FinancingReceivables30To89DaysPastDueMemberus-gaap:HomeEquityMember2023-12-310000720672sf:CapitalRaisingMember2023-01-012023-12-310000720672sf:RestrictedStockUnitsPerformanceBasedRestrictedStockUnitsAndRestrictedStockAwardsMember2023-01-012023-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672sf:DebenturesMember2023-01-012023-12-310000720672sf:StifelBankAndTrustMemberus-gaap:CommonStockMember2023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AgencySecuritiesMember2023-12-310000720672us-gaap:FairValueInputsLevel3Memberus-gaap:AuctionRateSecuritiesMember2023-12-310000720672us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310000720672us-gaap:CoreDepositsMember2023-12-310000720672sf:AcquiredTechnologyMember2022-12-310000720672us-gaap:PassMembersf:CommercialAndIndustrialMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:OtherLoansMember2023-12-310000720672us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialRealEstateMember2022-12-310000720672sf:CommercialAndIndustrialMember2023-12-310000720672srt:PartnershipInterestMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2023-12-310000720672us-gaap:PreferredStockMember2021-01-012021-12-310000720672us-gaap:ResidentialRealEstateMemberus-gaap:AssetPledgedAsCollateralMember2022-12-310000720672us-gaap:AdditionalPaidInCapitalMember2020-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:RetainedEarningsMember2022-12-310000720672srt:PartnershipInterestMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-01-012022-12-310000720672sf:OtherLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000720672us-gaap:PassMembersf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672sf:SeniorNotes520Due2047Member2017-10-262017-10-270000720672srt:MaximumMembersf:DeferredAwardsMember2020-01-012020-12-310000720672us-gaap:CommercialRealEstateMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:ResidentialMortgageMemberus-gaap:PassMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfFourPointFiveZeroPercentageNonCumulativePreferredStockSeriesDPreferredStockMember2023-01-012023-12-310000720672sf:FairValueOfSecuritiesReceivedAsCollateralMember2023-12-310000720672us-gaap:CommonStockMember2022-12-310000720672sf:StifelFinancialCapitalTrustThreeMember2023-01-012023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMemberus-gaap:SpecialMentionMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:ResidentialMortgageMember2023-12-310000720672sf:StifelBancorpMembersf:ExecutiveOfficersAndDirectorsOfCertainAffiliatedEntitiesMember2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMember2022-12-310000720672srt:AmericasMemberus-gaap:AllOtherSegmentsMember2022-01-012022-12-310000720672us-gaap:PassMembersf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672srt:MaximumMembersf:StifelNicolausWealthAccumulationPlanMember2020-01-012020-12-310000720672us-gaap:InterestRateContractMembersf:FairValueOfSecuritiesReceivedAsCollateralMember2023-12-310000720672us-gaap:HomeEquityMember2023-01-012023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Membersf:NonAgencyMortgageBackedSecuritiesMember2023-12-310000720672us-gaap:AuctionRateSecuritiesMember2023-12-310000720672us-gaap:TreasuryStockCommonMember2023-01-012023-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310000720672us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembersf:CommercialAndIndustrialMember2022-12-3100007206722022-12-310000720672us-gaap:CollateralPledgedMember2023-12-310000720672us-gaap:FairValueInputsLevel2Membersf:OtherLoansMember2023-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672us-gaap:CommercialRealEstateMember2022-01-012022-12-310000720672sf:StifelNicolausWealthAccumulationPlanMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:FairValueInputsLevel3Membersf:OtherInvestmentMember2022-12-310000720672sf:StifelFinancialCapitalTrustThreeMember2023-12-310000720672sf:OtherLoansMemberus-gaap:DoubtfulMember2023-12-310000720672us-gaap:AssetBackedSecuritiesMember2022-12-310000720672us-gaap:SecuritiesSoldNotYetPurchasedMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2023-12-310000720672srt:ParentCompanyMember2023-12-310000720672sf:StifelFinancialCapitalTrustFourMember2023-01-012023-12-310000720672sf:OtherStatesMembersf:InstitutionalGroupMember2022-01-012022-12-310000720672us-gaap:AuctionRateSecuritiesMember2022-12-310000720672us-gaap:PassMember2022-12-310000720672sf:SecuritiesBasedLoansMember2022-12-310000720672us-gaap:AdditionalPaidInCapitalMember2022-12-310000720672sf:SeniorNotes400Due2030Member2020-05-310000720672us-gaap:FinancialAssetNotPastDueMembersf:FundBankingMember2023-12-310000720672us-gaap:SpecialMentionMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:InvestmentsInFundsAndPartnershipsMeasuredAtNetAssetValueMember2022-12-310000720672sf:SecuritiesOwnedMemberus-gaap:FixedIncomeSecuritiesMember2023-12-310000720672us-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:UnusedLinesOfCreditMember2022-12-310000720672us-gaap:FairValueInputsLevel1Membersf:OtherInvestmentMember2022-12-310000720672sf:SeniorNotes4250Due2024Member2016-07-012016-07-310000720672sf:SecuritiesOwnedMemberus-gaap:FixedIncomeSecuritiesMember2022-12-310000720672sf:StifelBancorpMembersf:ExecutiveOfficersAndDirectorsOfCertainAffiliatedEntitiesMember2023-12-310000720672sf:TwoThousandAndTwentyThreeCreditAgreementMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMember2023-12-310000720672us-gaap:ProductAndServiceOtherMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672sf:OtherLoansMember2023-12-310000720672us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentDebtSecuritiesMember2022-12-310000720672us-gaap:FairValueInputsLevel1Membersf:OtherInvestmentMember2023-12-310000720672sf:SecuritiesOwnedMembersf:CorporateEquitySecuritiesMember2023-12-310000720672sf:StifelFinancialCapitalTrustFourMember2022-12-310000720672sf:OtherCountriesMember2022-01-012022-12-310000720672us-gaap:AllOtherSegmentsMember2021-01-012021-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:SubstandardMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMembersf:GlobalWealthManagementMember2023-01-012023-12-310000720672sf:SeniorNotes520Due2047Member2023-01-012023-12-310000720672sf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:MiscellaneousInvestmentsMember2022-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMemberus-gaap:CommercialRealEstateMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:HomeEquityMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000720672us-gaap:PreferredStockMember2022-12-310000720672sf:ConstructionAndLandMember2021-12-310000720672sf:FinancingReceivables30To89DaysPastDueMember2023-12-310000720672us-gaap:SovereignDebtMember2022-12-310000720672us-gaap:AllOtherSegmentsMember2022-12-310000720672us-gaap:FairValueInputsLevel3Membersf:OtherLoansMember2022-12-310000720672sf:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-12-310000720672us-gaap:DoubtfulMemberus-gaap:CommercialRealEstateMember2022-12-310000720672us-gaap:TradeNamesMember2022-12-310000720672sf:WrittenOptionsMember2023-12-310000720672us-gaap:AssetBackedSecuritiesMember2022-12-310000720672us-gaap:SpecialMentionMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:RetainedEarningsMember2022-01-012022-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2023-01-012023-12-310000720672sf:StifelFinancialCapitalTrustTwoMember2016-01-012016-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfSixPointOneTwoFivePercentageNonCumulativePreferredStockSeriesCPreferredStockMember2024-02-090000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:FundBankingMember2023-12-310000720672srt:MaximumMemberus-gaap:OfficeEquipmentMember2023-12-310000720672srt:MaximumMemberus-gaap:BuildingAndBuildingImprovementsMember2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:DoubtfulMember2022-12-310000720672us-gaap:RetainedEarningsMember2021-12-310000720672us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2023-01-012023-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672us-gaap:PreferredStockMember2020-12-310000720672us-gaap:FairValueInputsLevel1Membersf:CorporateEquitySecuritiesMember2023-12-310000720672us-gaap:LoansMember2022-01-012022-12-310000720672sf:FundBankingMember2022-12-310000720672us-gaap:FinancialAssetNotPastDueMember2023-12-310000720672us-gaap:ProductAndServiceOtherMembersf:GlobalWealthManagementMember2023-01-012023-12-310000720672us-gaap:AssetBackedSecuritiesMember2022-01-012022-12-310000720672us-gaap:SubstandardMember2022-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMember2023-12-310000720672sf:OtherCountriesMember2023-01-012023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000720672sf:AdvisoryFeesMembersf:InstitutionalGroupMember2022-01-012022-12-310000720672country:GB2022-01-012022-12-310000720672us-gaap:PassMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMember2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMember2023-12-310000720672us-gaap:CommonStockMember2020-12-310000720672us-gaap:ProductAndServiceOtherMemberus-gaap:AllOtherSegmentsMember2022-01-012022-12-310000720672country:GB2023-01-012023-12-310000720672us-gaap:DoubtfulMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:OtherLoansMember2022-12-310000720672us-gaap:FederalHomeLoanBankAdvancesMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:FundBankingMember2023-12-310000720672srt:AmericasMembersf:GlobalWealthManagementMember2022-01-012022-12-310000720672us-gaap:LoansMember2023-01-012023-12-3100007206722021-01-012021-12-310000720672sf:CommercialAndIndustrialMember2023-01-012023-12-310000720672sf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMember2023-12-310000720672sf:FinancingReceivables30To89DaysPastDueMembersf:CommercialAndIndustrialMember2022-12-310000720672us-gaap:TreasuryStockCommonMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:InterestRateContractMembersf:FairValueOfSecuritiesPledgedAsCollateralMember2023-12-310000720672sf:OtherLoansMember2021-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2022-12-310000720672us-gaap:TreasuryStockCommonMember2021-01-012021-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000720672us-gaap:USGovernmentDebtSecuritiesMember2023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMember2023-12-310000720672us-gaap:RetainedEarningsMember2020-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USGovernmentDebtSecuritiesMember2023-12-310000720672sf:OtherLoansMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:FinancialAssetNotPastDueMembersf:CommercialAndIndustrialMember2022-12-310000720672sf:CommercialAndIndustrialMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:ResidentialMortgageMember2021-12-310000720672us-gaap:SecuritiesSoldNotYetPurchasedMember2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SubstandardMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672us-gaap:UnusedLinesOfCreditMember2023-12-310000720672us-gaap:PassMembersf:OtherLoansMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:AgencySecuritiesMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:FundBankingMember2023-12-310000720672us-gaap:DoubtfulMembersf:SecuritiesBasedLoansMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:GlobalWealthManagementMember2023-01-012023-12-310000720672us-gaap:MoneyMarketFundsMember2022-12-310000720672srt:MoodysCRatingMemberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672us-gaap:LoansMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMemberus-gaap:HomeEquityMember2023-12-310000720672sf:InstitutionalGroupMember2021-01-012021-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:FairValueInputsLevel2Membersf:OtherInvestmentMember2022-12-310000720672us-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-310000720672us-gaap:AuctionRateSecuritiesMember2022-12-310000720672us-gaap:SpecialMentionMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMemberus-gaap:CommercialRealEstateMember2022-12-310000720672sf:SeniorNotes400Due2030Member2022-12-310000720672us-gaap:SubstandardMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMemberus-gaap:CommercialRealEstateMember2023-12-310000720672srt:AmericasMember2022-01-012022-12-310000720672sf:SeniorNotes4250Due2024Member2023-12-310000720672us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersf:DebtAndEquityMember2023-12-310000720672us-gaap:PassMembersf:CommercialAndIndustrialMember2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SubstandardMember2022-12-310000720672sf:IncentiveStockPlanMember2021-01-012021-12-310000720672sf:FairValueOfSecuritiesPledgedAsCollateralMembersf:USGovernmentAgencySecuritiesAndUSGovernmentSecuritiesAndCorporateFixedIncomeSecuritiesMember2022-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-12-310000720672us-gaap:HomeEquityMember2021-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672sf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:InterestRateContractMember2022-12-310000720672us-gaap:TreasuryStockCommonMember2021-12-310000720672us-gaap:AllOtherSegmentsMember2023-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-12-310000720672us-gaap:CoreDepositsMember2022-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMembersf:InstitutionalGroupMember2022-01-012022-12-310000720672sf:DeferredAwardsMember2023-01-012023-12-310000720672us-gaap:CommercialRealEstateMember2023-01-012023-12-310000720672sf:StifelFinancialCapitalTrustThreeMember2022-12-310000720672us-gaap:ProductAndServiceOtherMemberus-gaap:AllOtherSegmentsMember2023-01-012023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-310000720672us-gaap:HomeEquityMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:FundBankingMember2023-12-310000720672sf:OtherLoansMemberus-gaap:DoubtfulMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:ProductAndServiceOtherMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:FinancialAssetNotPastDueMember2023-12-310000720672us-gaap:AccountingStandardsUpdate201613Member2023-12-310000720672us-gaap:AssetBackedSecuritiesMember2023-12-310000720672sf:OtherStatesMember2022-01-012022-12-310000720672us-gaap:ShareBasedCompensationAwardTrancheTwoMembersf:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-12-310000720672us-gaap:FairValueInputsLevel1Membersf:CorporateEquitySecuritiesMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:AdditionalPaidInCapitalMember2021-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2023-12-310000720672sf:TwoThousandAndTwentyThreeCreditAgreementMember2023-09-272023-09-270000720672us-gaap:MoneyMarketFundsMember2023-12-310000720672sf:IncentiveStockPlanMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672sf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel1Member2022-12-310000720672us-gaap:BuildingAndBuildingImprovementsMembersrt:MinimumMember2023-12-310000720672us-gaap:SubstandardMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:StifelFinancialCapitalTrustTwoMember2022-12-310000720672sf:OtherStatesMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMember2023-01-012023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMember2022-12-310000720672sf:ConstructionAndLandMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000720672us-gaap:SpecialMentionMemberus-gaap:HomeEquityMember2022-12-310000720672sf:CorporateEquitySecuritiesMember2021-12-310000720672sf:InvestmentBankingMember2022-01-012022-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2023-12-310000720672us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-12-310000720672us-gaap:UnfundedLoanCommitmentMember2023-12-310000720672us-gaap:PassMembersf:SecuritiesBasedLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:InstitutionalGroupMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000720672us-gaap:AdditionalPaidInCapitalMember2023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:CommercialMortgageBackedSecuritiesMember2022-12-3100007206722023-12-310000720672sf:TorreyaPartnersLlcMembersf:InstitutionalGroupMember2023-03-010000720672sf:StifelNicolausMember2023-12-310000720672us-gaap:PassMembersf:OtherLoansMember2023-12-310000720672sf:InvestmentBankingMember2023-01-012023-12-310000720672sf:ConstructionAndLandMember2023-01-012023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:InterestRateContractMembersf:FairValueOfSecuritiesPledgedAsCollateralMember2022-12-310000720672srt:MaximumMemberus-gaap:StandbyLettersOfCreditMember2023-01-012023-12-310000720672sf:ViningSparksMember2021-11-012021-11-010000720672sf:InstitutionalGroupMember2023-12-310000720672us-gaap:FinancialAssetNotPastDueMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:OtherIncomeMember2023-01-012023-12-310000720672sf:StifelBankAndTrustMember2023-12-310000720672us-gaap:FairValueInputsLevel1Member2023-12-310000720672us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentDebtSecuritiesMember2023-12-3100007206722022-01-012022-12-310000720672sf:CorporateEquitySecuritiesFinancialInstrumentsOwnedMember2022-01-012022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMembersf:ConstructionAndLandMember2023-12-310000720672us-gaap:OtherAssetsMember2023-12-310000720672us-gaap:OtherAssetsMember2022-12-310000720672sf:DebenturesMember2022-01-012022-12-310000720672srt:PartnershipInterestMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMember2023-12-310000720672us-gaap:MutualFundMember2022-12-310000720672us-gaap:SpecialMentionMembersf:RevolvingLoansAmortizedCostBasisMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMembersf:OtherLoansMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672country:CA2023-01-012023-12-310000720672sf:FundBankingMember2023-01-012023-12-310000720672sf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672sf:OtherStatesMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMember2022-01-012022-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2022-12-310000720672us-gaap:LoansMember2021-12-3100007206722023-01-012023-12-310000720672country:CAsf:InstitutionalGroupMember2022-01-012022-12-310000720672sf:CommissionsMember2022-01-012022-12-310000720672sf:SeniorNotes520Due2047Member2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SpecialMentionMember2022-12-310000720672srt:MaximumMembersf:DeferredAwardsMember2023-01-012023-12-310000720672us-gaap:DoubtfulMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:CorporateEquitySecuritiesMember2023-12-310000720672us-gaap:CommonStockMember2024-02-090000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:DoubtfulMember2023-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMemberus-gaap:CommercialRealEstateMember2023-12-310000720672sf:CommercialAndIndustrialMember2022-12-310000720672us-gaap:PassMembersf:FundBankingMember2022-12-310000720672us-gaap:FixedIncomeSecuritiesMember2023-12-310000720672us-gaap:AllOtherSegmentsMember2022-01-012022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:SubstandardMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:PassMembersf:SecuritiesBasedLoansMember2022-12-310000720672sf:SeniorNotes520Due2047Member2017-10-310000720672sf:SeniorNotes400Due2030Member2023-12-310000720672us-gaap:SubstandardMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-12-310000720672us-gaap:FairValueInputsLevel3Member2022-12-310000720672sf:WrittenOptionsMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMembersf:OtherLoansMember2023-12-310000720672us-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:DoubtfulMember2022-12-310000720672us-gaap:LoansMember2023-12-310000720672us-gaap:CommonStockMember2021-12-310000720672us-gaap:FinancialAssetNotPastDueMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2022-12-310000720672sf:CapitalRaisingMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMember2022-12-310000720672country:CAsf:InstitutionalGroupMember2023-01-012023-12-310000720672sf:OtherInvestmentMember2022-01-012022-12-310000720672srt:MinimumMembersf:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-12-310000720672us-gaap:RetainedEarningsMember2021-01-012021-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:CommercialAndIndustrialMember2023-12-310000720672country:US2021-01-012021-12-310000720672us-gaap:SubstandardMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:FairValueInputsLevel3Memberus-gaap:AssetBackedSecuritiesMember2022-12-310000720672us-gaap:ResidentialRealEstateMemberus-gaap:AssetPledgedAsCollateralMember2023-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel1Member2023-12-310000720672sf:CapitalRaisingMembersf:InstitutionalGroupMember2022-01-012022-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-310000720672us-gaap:TreasuryStockCommonMember2020-12-310000720672us-gaap:PassMemberus-gaap:HomeEquityMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:SpecialMentionMember2023-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMemberus-gaap:CommercialRealEstateMember2023-12-310000720672sf:SeniorNotes4250Due2024Member2023-01-012023-12-310000720672sf:CorporateEquitySecuritiesMember2022-12-310000720672us-gaap:RetainedEarningsMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMembersf:ConstructionAndLandMember2023-12-310000720672us-gaap:SpecialMentionMemberus-gaap:HomeEquityMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:SpecialMentionMemberus-gaap:CommercialRealEstateMember2023-12-310000720672sf:InstitutionalGroupMember2023-01-012023-12-310000720672sf:SecuritiesBasedLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:ConstructionAndLandMember2023-12-310000720672us-gaap:CustomerRelationshipsMember2023-12-310000720672us-gaap:SpecialMentionMemberus-gaap:HomeEquityMember2023-12-310000720672srt:ParentCompanyMemberus-gaap:CommonStockMember2023-12-310000720672us-gaap:CommercialRealEstateMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000720672us-gaap:AccountingStandardsUpdate201613Memberus-gaap:UnfundedLoanCommitmentMember2022-12-310000720672us-gaap:AssetBackedSecuritiesMember2023-01-012023-12-310000720672sf:ConstructionAndLandMemberus-gaap:FinancialAssetNotPastDueMember2023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310000720672sf:OtherInvestmentMember2021-12-310000720672sf:OurOtherBrokerDealerSubsidiariesMember2023-12-310000720672sf:PaymentFromBrokerageCustomersMember2022-12-310000720672us-gaap:FinancialAssetNotPastDueMembersf:FundBankingMember2022-12-310000720672us-gaap:MortgageBackedSecuritiesMembersf:NonAgencyMortgageBackedSecuritiesMember2023-12-310000720672us-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityMember2022-12-310000720672sf:NonRecourseDebtMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:ConstructionAndLandMemberus-gaap:SpecialMentionMember2023-12-310000720672us-gaap:PassMemberus-gaap:HomeEquityMember2022-12-310000720672sf:FairValueOfSecuritiesReceivedAsCollateralMember2022-12-310000720672us-gaap:AssetManagement1Member2022-01-012022-12-310000720672us-gaap:FairValueInputsLevel3Membersf:OtherInvestmentMember2023-12-310000720672us-gaap:ProductAndServiceOtherMembersf:GlobalWealthManagementMember2022-01-012022-12-310000720672us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:AllOtherSegmentsMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:SpecialMentionMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:FinancingReceivables30To89DaysPastDueMemberus-gaap:HomeEquityMember2022-12-310000720672sf:OtherLoansMemberus-gaap:FinancialAssetNotPastDueMember2023-12-310000720672us-gaap:AccountingStandardsUpdate201613Memberus-gaap:UnfundedLoanCommitmentMember2023-12-310000720672us-gaap:AuctionRateSecuritiesMember2022-01-012022-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMembersf:GlobalWealthManagementMember2022-01-012022-12-310000720672sf:SeniorNotes520Due2047Member2023-12-310000720672sf:SeniorNotes520Due2047Member2024-02-090000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMember2023-12-310000720672sf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:GlobalWealthManagementMember2023-12-310000720672us-gaap:CommonStockMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMembersf:OtherLoansMember2023-12-310000720672sf:FinancingReceivables30To89DaysPastDueMembersf:OtherLoansMember2022-12-310000720672sf:OtherInvestmentMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:FinancialAssetNotPastDueMembersf:SecuritiesBasedLoansMember2022-12-310000720672sf:ConstructionAndLandMember2022-01-012022-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672sf:OtherLoansMember2023-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2023-12-310000720672sf:StifelFinancialCapitalTrustTwoMember2023-12-310000720672us-gaap:AuctionRateSecuritiesMember2021-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersf:DebtAndEquityMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:SpecialMentionMembersf:ConstructionAndLandMember2022-12-310000720672sf:RestrictedStockUnitsAndRestrictedStockAwardsMember2022-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-310000720672us-gaap:MutualFundMember2023-12-310000720672us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-310000720672sf:SecuritiesBasedLoansMember2023-01-012023-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672sf:OtherLoansMemberus-gaap:DoubtfulMember2022-12-310000720672us-gaap:CommercialRealEstateMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:SecuritiesBasedLoansMember2021-12-310000720672srt:MaximumMembersf:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-12-310000720672us-gaap:SubstandardMembersf:RevolvingLoansAmortizedCostBasisMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:RestrictedStockUnitsPerformanceBasedRestrictedStockUnitsAndRestrictedStockAwardsMember2023-12-310000720672us-gaap:PreferredStockMember2021-12-310000720672us-gaap:MortgageBackedSecuritiesMembersf:NonAgencyMortgageBackedSecuritiesMember2022-12-310000720672sf:AdvisoryFeesMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672us-gaap:NoncompeteAgreementsMember2023-12-310000720672us-gaap:FairValueInputsLevel2Member2022-12-310000720672us-gaap:DoubtfulMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:GlobalWealthManagementMember2022-12-310000720672us-gaap:PreferredStockMember2022-01-012022-12-310000720672sf:SierraPacificSecuritiesLlcMember2023-08-012023-08-010000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:DebenturesMember2021-01-012021-12-310000720672sf:RestrictedStockUnitsAndRestrictedStockAwardsMember2023-01-012023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SubstandardMember2023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USGovernmentDebtSecuritiesMember2022-12-310000720672sf:GlobalWealthManagementMember2022-01-012022-12-310000720672us-gaap:PassMembersf:ConstructionAndLandMember2023-12-310000720672us-gaap:SubstandardMembersf:CommercialAndIndustrialMember2022-12-310000720672country:GB2021-01-012021-12-310000720672us-gaap:ResidentialMortgageMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:SpecialMentionMember2023-12-310000720672srt:AmericasMembersf:InstitutionalGroupMember2022-01-012022-12-310000720672us-gaap:PreferredStockMember2023-12-310000720672country:CA2022-01-012022-12-310000720672sf:OtherInvestmentMember2023-12-310000720672sf:CorporateEquitySecuritiesMember2022-01-012022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMembersf:FundBankingMember2023-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:SwapMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:StifelFinancialCapitalTrustTwoMember2005-08-120000720672us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2022-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel3Member2023-12-310000720672sf:OtherLoansMember2022-01-012022-12-310000720672sf:InvestmentsInFundsAndPartnershipsMeasuredAtNetAssetValueMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfSixPointTwoFivePercentageNonCumulativePreferredStockSeriesBMember2023-01-012023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMemberus-gaap:HomeEquityMember2023-12-310000720672us-gaap:FairValueInputsLevel3Membersf:OtherLoansMember2023-12-310000720672us-gaap:UnfundedLoanCommitmentMember2022-12-310000720672us-gaap:PassMembersf:FundBankingMember2023-12-310000720672sf:RestrictedStockAwardMembersrt:MinimumMember2023-01-012023-12-310000720672sf:CommercialAndIndustrialMember2021-12-310000720672us-gaap:FixedIncomeSecuritiesMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMemberus-gaap:DoubtfulMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-12-310000720672sf:ConstructionAndLandMemberus-gaap:SpecialMentionMember2023-12-310000720672us-gaap:OfficeEquipmentMembersrt:MinimumMember2023-12-310000720672us-gaap:TreasuryStockCommonMember2023-12-310000720672srt:MinimumMembersf:DeferredAwardsMember2023-01-012023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMembersf:FundBankingMember2023-12-310000720672sf:SierraPacificSecuritiesLlcMembersf:InstitutionalGroupMember2023-08-010000720672us-gaap:SecuritiesSoldNotYetPurchasedMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMembersf:FundBankingMember2023-12-310000720672us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310000720672country:GBsf:InstitutionalGroupMember2023-01-012023-12-310000720672us-gaap:HomeEquityMember2022-01-012022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMemberus-gaap:HomeEquityMember2023-12-310000720672us-gaap:NoncompeteAgreementsMember2022-12-310000720672us-gaap:PassMembersf:ConstructionAndLandMember2022-12-310000720672us-gaap:AssetBackedSecuritiesMember2021-12-310000720672sf:RestrictedStockUnitsAndRestrictedStockAwardsMember2023-12-310000720672sf:StifelFinancialCapitalTrustThreeMember2007-03-300000720672country:GBsf:InstitutionalGroupMember2022-01-012022-12-310000720672us-gaap:HomeEquityMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:DoubtfulMembersf:CommercialAndIndustrialMember2022-12-310000720672us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2023-12-310000720672us-gaap:SpecialMentionMember2022-12-310000720672us-gaap:AuctionRateSecuritiesMember2023-12-310000720672us-gaap:SubstandardMembersf:ConstructionAndLandMember2022-12-310000720672srt:PartnershipInterestMember2022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SpecialMentionMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672sf:OtherLoansMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:TorreyaPartnersLlcMember2023-03-012023-03-010000720672sf:StifelBankMember2023-12-310000720672sf:PaymentFromBrokerageCustomersMember2023-12-310000720672sf:SecuritiesBasedLoansMember2022-01-012022-12-310000720672sf:OtherInvestmentMember2022-12-310000720672us-gaap:PreferredStockMember2023-01-012023-12-310000720672sf:PurchaseCommitmentsMembersf:ToBeAnnouncedSecurityContractsMember2023-12-310000720672us-gaap:AccountingStandardsUpdate201613Member2023-01-012023-12-310000720672sf:StifelFinancialCapitalTrustFourMember2023-12-310000720672us-gaap:PassMembersf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMember2023-12-310000720672us-gaap:SovereignDebtMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:CommercialAndIndustrialMember2022-01-012022-12-310000720672srt:MaximumMemberus-gaap:DeferredCompensationShareBasedPaymentsMember2023-01-012023-12-310000720672sf:MoodysAaRatingMemberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMembersf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:CorporateEquitySecuritiesFinancialInstrumentsOwnedMember2021-12-310000720672us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:ConstructionAndLandMember2023-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310000720672us-gaap:FinancialAssetNotPastDueMember2022-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:SwapMember2022-12-310000720672sf:FundBankingMember2022-01-012022-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2022-12-310000720672sf:StifelNicolausWealthAccumulationPlanMembersrt:MinimumMember2023-01-012023-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel3Member2022-12-310000720672sf:StifelNicolausWealthAccumulationPlanMember2023-01-012023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-12-310000720672sf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672sf:AcquiredTechnologyMember2023-12-310000720672sf:InvestmentBankingBacklogMember2023-12-310000720672sf:MoodysARatingMemberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:SpecialMentionMemberus-gaap:CommercialRealEstateMember2023-12-310000720672sf:CapitalRaisingMember2022-01-012022-12-310000720672sf:CapitalRaisingMembersf:GlobalWealthManagementMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMembersf:FinancingReceivables30To89DaysPastDueMember2022-12-310000720672us-gaap:TreasuryStockCommonMember2022-01-012022-12-310000720672us-gaap:DeferredCompensationShareBasedPaymentsMembersrt:MinimumMember2023-01-012023-12-310000720672us-gaap:SubstandardMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:AssetBackedSecuritiesMember2023-12-310000720672sf:OtherLoansMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000720672srt:PartnershipInterestMember2023-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersf:DebtAndEquityMember2022-12-310000720672us-gaap:AccountingStandardsUpdate201613Member2022-01-012022-12-310000720672sf:SecuritiesOwnedMember2022-12-310000720672us-gaap:PassMembersf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672sf:OtherCountriesMember2021-01-012021-12-310000720672srt:MaximumMembersf:RestrictedStockAwardMember2023-01-012023-12-310000720672sf:CommissionsMember2023-01-012023-12-310000720672us-gaap:FairValueInputsLevel3Memberus-gaap:AuctionRateSecuritiesMember2022-12-310000720672us-gaap:ResidentialMortgageMember2022-12-310000720672us-gaap:FairValueInputsLevel1Member2022-12-310000720672sf:SecuritiesOwnedMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:ResidentialMortgageMember2023-12-310000720672sf:StifelNicolausMember2022-12-310000720672us-gaap:AssetManagement1Member2023-01-012023-12-310000720672us-gaap:PassMembersf:SecuritiesBasedLoansMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfSixPointOneTwoFivePercentageNonCumulativePreferredStockSeriesCPreferredStockMember2023-01-012023-12-310000720672us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-12-310000720672us-gaap:SubstandardMemberus-gaap:HomeEquityMember2023-12-310000720672srt:AmericasMember2023-01-012023-12-310000720672sf:AfterFebruaryFifteenTwentyThirtyMembersf:SeniorNotes400Due2030Member2023-01-012023-12-310000720672sf:SeniorNotes4250Due2024Member2022-12-310000720672us-gaap:SecuritiesSoldNotYetPurchasedMember2022-12-310000720672sf:FinancingReceivables30To89DaysPastDueMembersf:OtherLoansMember2023-12-310000720672sf:AcxitCapitalPartnersMembersf:InstitutionalGroupMember2022-07-010000720672us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:AcxitCapitalPartnersMember2022-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SpecialMentionMember2023-12-310000720672country:US2023-01-012023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMembersf:FundBankingMember2023-12-310000720672sf:CapitalRaisingMembersf:GlobalWealthManagementMember2023-01-012023-12-310000720672sf:OtherLoansMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000720672us-gaap:InterestRateContractMember2023-12-310000720672sf:OtherLoansMember2022-12-310000720672us-gaap:PassMemberus-gaap:CommercialRealEstateMember2023-12-310000720672us-gaap:FixedIncomeSecuritiesMember2023-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:MiscellaneousInvestmentsMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:FinancialAssetNotPastDueMember2022-12-310000720672sf:ConstructionAndLandMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:USGovernmentDebtSecuritiesMember2022-12-310000720672us-gaap:SubstandardMemberus-gaap:HomeEquityMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMemberus-gaap:HomeEquityMember2023-12-310000720672sf:OfficeSpaceAndOfficeEquipmentMembersrt:MinimumMember2023-01-012023-12-310000720672sf:InvestmentBankingBacklogMember2022-12-310000720672sf:AdvisoryFeesMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMembersf:FinancingReceivables30To89DaysPastDueMember2023-12-310000720672us-gaap:TradeNamesMember2023-12-310000720672sf:CompanyOwnedSecuritiesMember2023-01-012023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310000720672us-gaap:InterestRateContractMembersf:FairValueOfSecuritiesReceivedAsCollateralMember2022-12-310000720672sf:AdvisoryFeesMember2022-01-012022-12-310000720672sf:GlobalWealthManagementMember2021-01-012021-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMembersf:DebtAndEquityMember2023-01-012023-12-310000720672us-gaap:PassMemberus-gaap:HomeEquityMember2023-12-310000720672sf:SecuritiesOwnedMembersf:CorporateEquitySecuritiesMember2022-12-3100007206722023-06-300000720672us-gaap:AdditionalPaidInCapitalMember2022-01-012022-12-310000720672sf:CorporateEquitySecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfSixPointTwoFivePercentageNonCumulativePreferredStockSeriesBMember2024-02-090000720672us-gaap:OtherIncomeMember2022-01-012022-12-310000720672us-gaap:PassMember2023-12-310000720672sf:PriorToFebruaryFifteenTwentyThirtyMemberus-gaap:MeasurementInputDiscountRateMembersf:SeniorNotes400Due2030Member2023-12-310000720672sf:FundBankingMember2021-12-310000720672us-gaap:CommonStockMember2023-12-310000720672srt:AmericasMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMembersf:InstitutionalGroupMember2023-01-012023-12-310000720672sf:FundBankingMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:DepositorySharesEachRepresentingOneByThousandthInterestInShareOfFourPointFiveZeroPercentageNonCumulativePreferredStockSeriesDPreferredStockMember2024-02-090000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialMortgageBackedSecuritiesMember2023-12-310000720672us-gaap:PrivateEquityFundsMember2023-12-310000720672srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2023-01-012023-12-310000720672us-gaap:DoubtfulMembersf:SecuritiesBasedLoansMember2022-12-310000720672us-gaap:FairValueInputsLevel3Member2023-12-310000720672us-gaap:AuctionRateSecuritiesMember2023-01-012023-12-310000720672us-gaap:CommercialRealEstateMember2021-12-310000720672us-gaap:FinancialAssetNotPastDueMemberus-gaap:HomeEquityMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMemberus-gaap:SubstandardMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:HomeEquityMember2023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:SubstandardMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:FairValueInputsLevel2Memberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:MiscellaneousInvestmentsMember2023-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000720672us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberus-gaap:MiscellaneousInvestmentsMember2022-01-012022-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000720672country:US2022-01-012022-12-310000720672country:CA2021-01-012021-12-310000720672sf:StifelBankMemberus-gaap:CommonStockMember2023-12-310000720672us-gaap:ShareBasedCompensationAwardTrancheOneMembersf:PerformanceBasedRestrictedStockUnitsMember2023-01-012023-12-310000720672us-gaap:SpecialMentionMembersf:CommercialAndIndustrialMember2022-12-310000720672us-gaap:InvestmentAdvisoryManagementAndAdministrativeServiceMember2022-01-012022-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672sf:ViningSparksMembersf:InstitutionalGroupMember2021-11-010000720672sf:AcxitCapitalPartnersMember2022-07-012022-07-010000720672us-gaap:PassMembersf:FundBankingMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672us-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyOneMembersf:SecuritiesBasedLoansMember2023-12-310000720672us-gaap:AccountsPayableAndAccruedLiabilitiesMember2022-12-310000720672us-gaap:AccountsPayableAndAccruedLiabilitiesMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandNineteenMembersf:ConstructionAndLandMember2023-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyTwoMemberus-gaap:PassMembersf:CommercialAndIndustrialMember2023-12-310000720672us-gaap:FairValueInputsLevel2Membersf:OtherLoansMember2022-12-310000720672us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000720672us-gaap:FinancialAssetNotPastDueMembersf:SecuritiesBasedLoansMember2023-12-310000720672srt:MaximumMemberus-gaap:DeferredCompensationShareBasedPaymentsMember2020-01-012020-12-310000720672srt:AmericasMembersf:GlobalWealthManagementMember2023-01-012023-12-310000720672us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310000720672us-gaap:PrivateEquityFundsMember2022-12-310000720672srt:AmericasMemberus-gaap:AllOtherSegmentsMember2023-01-012023-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-310000720672us-gaap:PassMembersf:OtherLoansMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:HomeEquityMember2022-12-310000720672us-gaap:SpecialMentionMemberus-gaap:CommercialRealEstateMember2022-12-310000720672sf:SecuritiesBasedLoansMembersf:RevolvingLoansAmortizedCostBasisMember2023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-12-310000720672sf:ConstructionAndLandMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMember2023-12-310000720672us-gaap:USStatesAndPoliticalSubdivisionsMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:ResidentialMortgageMember2023-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2023-12-310000720672sf:SeniorNotes400Due2030Member2023-01-012023-12-310000720672sf:FundBankingMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:InstitutionalGroupMember2022-12-310000720672us-gaap:PassMembersf:CommercialAndIndustrialMember2023-12-310000720672sf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandEighteenMembersf:SecuritiesBasedLoansMember2023-12-310000720672sf:IncentiveStockPlanMember2023-01-012023-12-310000720672sf:OtherInvestmentMember2023-01-012023-12-3100007206722023-10-012023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:MortgageBackedSecuritiesMemberus-gaap:AgencySecuritiesMember2023-12-310000720672us-gaap:PassMembersf:FundBankingMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672sf:StifelFinancialCapitalTrustFourMember2008-06-280000720672sf:StifelFinancialCapitalTrustTwoMember2023-01-012023-12-310000720672us-gaap:DoubtfulMemberus-gaap:HomeEquityMember2022-12-310000720672sf:USGovernmentAgencySecuritiesAndUSGovernmentSecuritiesAndCorporateFixedIncomeSecuritiesMembersf:FairValueOfSecuritiesPledgedAsCollateralMember2023-12-310000720672sf:SeniorNotes520Due2047Member2023-01-012023-12-310000720672us-gaap:FixedIncomeSecuritiesMember2022-12-310000720672us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMember2023-12-310000720672srt:PartnershipInterestMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2023-01-012023-12-310000720672sf:SeniorNotes4250Due2024Member2014-07-310000720672sf:OfficeSpaceAndOfficeEquipmentMembersrt:MaximumMember2023-01-012023-12-310000720672us-gaap:FixedIncomeSecuritiesMemberus-gaap:SecuritiesSoldNotYetPurchasedMember2022-12-310000720672srt:ScenarioForecastMembersf:SeniorNotes400Due2030Member2030-02-142030-02-1500007206722021-12-310000720672sf:FinancingReceivables30To89DaysPastDueMember2022-12-310000720672us-gaap:CommercialRealEstateMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyMember2023-12-310000720672us-gaap:HomeEquityMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-310000720672us-gaap:MortgageBackedSecuritiesMemberus-gaap:FairValueInputsLevel2Membersf:NonAgencyMortgageBackedSecuritiesMember2022-12-310000720672srt:MoodysAaaRatingMemberus-gaap:AssetBackedSecuritiesMember2023-12-310000720672srt:MaximumMembersf:StifelNicolausWealthAccumulationPlanMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:PassMembersf:TermLoansAmortizedCostBasisByOriginationYearTwoThousandTwentyThreeMember2023-12-310000720672us-gaap:SovereignDebtMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:HomeEquityMember2023-12-310000720672sf:SecuritiesOwnedMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2023-12-310000720672us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2023-12-310000720672us-gaap:ProductAndServiceOtherMember2023-01-012023-12-310000720672us-gaap:ResidentialMortgageMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2022-12-3100007206722020-12-310000720672us-gaap:CustomerRelationshipsMember2022-12-310000720672us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-31sf:Securityiso4217:USDxbrli:sharesxbrli:purexbrli:sharessf:Segmentiso4217:USDsf:Item

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-09305

 

STIFEL FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

 

Delaware

 

43-1273600

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

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

(Address of principal executive offices and zip code)

(314) 342-2000

(Registrant’s telephone number, including area code)

 

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

Title of Each Class/ Trading Symbol

 

Name of Each Exchange on Which Registered

 

Shares or principal amount outstanding - February 1, 2024

 

Common Stock, $0.15 par value per share (SF)

 

New York Stock Exchange

 

 

102,796,022

 

Depository Shares, each representing 1/1,000th interest in a share of 6.25% Non-Cumulative Preferred Stock, Series B (SF-PB)

 

New York Stock Exchange

 

 

6,400

 

Depository Shares, each representing 1/1,000th interest in a share of 6.125% Non-Cumulative Preferred Stock, Series C (SF-PC)

 

New York Stock Exchange

 

 

9,000

 

Depository Shares, each representing 1/1,000th interest in a share of 4.50% Non-Cumulative Preferred Stock, Series D (SF-PD)

 

New York Stock Exchange

 

 

12,000

 

5.20% Senior Notes due 2047 (SFB)

 

New York Stock Exchange

 

$

225,000,000

 

 

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).


 

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

The aggregate market value of the registrant’s common stock, $0.15 par value per share, held by non-affiliates of the registrant as of the close of business on June 30, 2023, was $6.5 billion.1

1 In determining this amount, the registrant assumed that the executive officers and directors of the registrant are affiliates of the registrant. Such assumptions shall not be deemed to be conclusive for any other purposes.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the annual meeting of shareholders, to be filed within 120 days of our fiscal year ended December 31, 2023, are incorporated by reference in Part III hereof.

 


 

STIFEL FINANCIAL CORP.

TABLE OF CONTENTS

 

 

 

 

Part I

 

 

 

 

Item 1.

Business

1

 

Item 1A.

Risk Factors

11

 

Item 1B.

Unresolved Staff Comments

23

 

Item 1C.

Cybersecurity

23

 

Item 2.

Properties

25

 

Item 3.

Legal Proceedings

26

 

Item 4.

Mine Safety Disclosures

26

Part II

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

27

 

Item 6.

Reserved

29

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

61

 

Item 8.

Financial Statements and Supplementary Data

65

 

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

122

 

Item 9A.

Controls and Procedures

122

 

Item 9B.

Other Information

124

 

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

124

Part III

 

 

 

 

Item 10.

Directors, Executive Officers, and Corporate Governance

125

 

Item 11.

Executive Compensation

125

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

125

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

126

 

Item 14.

Principal Accounting Fees and Services

126

Part IV

 

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

127

 

Item 16.

Form 10-K Summary

131

 

 

Signatures

132

 


 

PART I

Certain statements in this report may be considered forward-looking. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements cover, among other things, statements made about general economic, political, regulatory, and market conditions, the investment banking and brokerage industries, our objectives and results, and also may include our belief regarding the effect of various legal proceedings, management expectations, our liquidity and funding sources, counterparty credit risk, or other similar matters. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including those factors discussed below under “Item 1A – Risk Factors” as well as those discussed in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Economic and Market Conditions” of this Form 10-K.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. In addition, our past results of operations do not necessarily indicate our future results. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

ITEM 1. BUSINESS

Stifel Financial Corp. is a Delaware corporation and a financial holding company headquartered in St. Louis. We were organized in 1983. Our principal subsidiary is Stifel, Nicolaus & Company, Incorporated (“Stifel”), a full-service retail and institutional wealth management and investment banking firm. Stifel is the successor to a partnership founded in 1890. Our other subsidiaries include Stifel Independent Advisors, LLC (“SIA”), an independent contractor broker-dealer firm; Keefe, Bruyette & Woods, Inc. (“KBW”), a broker-dealer firm; Stifel Nicolaus Europe Limited (“SNEL”), our European subsidiary; Stifel Nicolaus Canada Inc. (“SNC”), our Canadian subsidiary; Stifel Bank & Trust and Stifel Bank, retail and commercial banks, Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. (collectively, “Stifel Trust”), our trust companies (collectively “Stifel Bancorp”); and 1919 Investment Counsel, LLC, an asset management firm. Unless the context requires otherwise, the terms “the Company,” “our company,” “we,” and “our,” as used herein, refer to Stifel Financial Corp. and its subsidiaries.

We have a 133-year operating history and have built a diversified business serving private clients, institutional investors, and investment banking clients located across the country. Our principal activities are:

Private client services, including securities transaction and financial planning services;
Institutional equity and fixed income sales, trading and research, and municipal finance;
Investment banking services, including mergers and acquisitions, public offerings, and private placements; and
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. Over the past several years, we have grown substantially, primarily by completing and successfully integrating a number of acquisitions, including the following acquisitions, which were integrated during 2022 and 2023:

ACXIT Capital Partners – On July 1, 2022, the Company acquired ACXIT Capital Partners, a leading independent corporate finance and financial advisory firm serving European middle-market clients and entrepreneurs.
Torreya Partners LLC – On March 1, 2023, the Company acquired Torreya Partners LLC, a leading independent M&A and private capital advisory firm serving the global life sciences industry.
Sierra Pacific Securities, LLC – On August 1, 2023, the Company acquired Sierra Pacific Securities, LLC, an algorithmic trading-focused, fixed income market-making firm.

 

1


 

Business Segments

We operate in the following segments: Global Wealth Management, Institutional Group, and Other. For a discussion of the financial results of our segments, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Segment Analysis” of this Form 10-K.

Narrative Description of Business

Through our broker-dealer subsidiaries, we provide securities-related financial services to customers from the United States, Europe, and Canada. Our customers include individuals, corporations, municipalities, and institutions. We have customers throughout the United States, with a growing presence in the United Kingdom, Europe, and Canada. No single client accounts for a material percentage of any segment of our business. Our inventory, which we believe is of modest size and intended to turn over quickly, exists to facilitate order flow and support the investment strategies of our clients. The inventory of securities held to facilitate customer trades and our market-making activities is sensitive to market movements. Furthermore, our balance sheet is highly liquid, without material holdings of securities that are difficult to value or remarket. We believe that our broad platform, fee-based revenues, and strong distribution network position us well to take advantage of current trends within the financial services sector.

GLOBAL WEALTH MANAGEMENT

We provide securities transaction, brokerage, and investment services to our clients through the consolidated Stifel branch system. We have made significant investments in personnel and technology to grow the Private Client Group.

Consolidated Stifel Branch System

At December 31, 2023, the Private Client Group had a network of 2,278 financial advisors located in 398 branch offices in 48 states and the District of Columbia. In addition, we have 108 independent contractors.

Our financial advisors provide a broad range of investments and services to our clients, including financial planning services. We offer equity securities; taxable and tax-exempt fixed income securities, including municipal, corporate, and government agency securities; preferred stock; and unit investment trusts. We also offer a broad range of externally managed fee-based products. In addition, we offer insurance and annuity products and investment company shares through agreements with numerous third-party distributors. We encourage our financial advisors to pursue the products and services that best fit their clients’ needs and that they feel most comfortable recommending. Our private clients may choose from a traditional, commission-based structure or fee-based money management programs. In most cases, commissions are charged for sales of investment products to clients based on an established commission schedule. In certain cases, varying discounts may be given based on relevant client or trade factors determined by the financial advisor.

Our independent contractors, who operate in our SIA business, provide the same types of financial products and services to its private clients as does Stifel. Under their contractual arrangements, these independent contractors may also provide accounting services, real estate brokerage, insurance, or other business activities for their own account. Independent contractors are responsible for all of their direct costs and are paid a larger percentage of commissions to compensate them for their added expenses. SIA is an introducing broker-dealer and, as such, clears its transactions through Stifel.

Customer Financing

Client securities transactions are effected on either a cash or margin basis. When securities are purchased on a margin basis, the customer deposits less than the full cost of the security in their account. We make a loan to the customer for the balance of the purchase price. Such loans are collateralized by the purchased securities. The amounts of the loans are subject to the margin requirements of Regulation T of the Board of Governors of the Federal Reserve System, Financial Industry Regulatory Authority, Inc. (“FINRA”) margin requirements, and our internal policies, which usually are more restrictive than Regulation T or FINRA requirements. In permitting customers to purchase securities on margin, we are subject to the risk of a market decline, which could reduce the value of our collateral below the amount of the customers’ indebtedness.

We offer securities-based lending through Stifel Bancorp, which allows clients to borrow money against the value of qualifying securities for any suitable purpose other than purchasing, trading, or carrying marketable securities or refinancing margin debt. The loan requirements are subject to Regulation U of the Board of Governors of the Federal Reserve System (“Regulation U”) and our internal policies, which are typically more restrictive than Regulation U. We establish approved lines and advance rates against qualifying securities and monitor limits daily and, pursuant to such guidelines, require customers to deposit additional collateral or reduce debt positions, when necessary. Factors considered in the review of securities-based lending are the amount of the loan, the degree of concentrated or restricted positions, and the overall evaluation of the portfolio to ensure proper diversification, or, in the case of concentrated positions, appropriate liquidity of the underlying collateral or potential hedging strategies. Underlying collateral for securities-based loans is reviewed with respect to the liquidity of the proposed collateral positions, valuation of securities, historic trading range, volatility analysis, and an evaluation of industry concentrations.

 

2


 

Asset Management

Our asset management business offers specialized investment management solutions for institutions, private clients, and investment advisers. Revenues for this segment are primarily generated by the investment advisory fees related to asset management services provided for individual and institutional investment portfolios, along with mutual funds. Investment advisory fees are earned on assets held in managed or non-discretionary asset-based programs. These fees are computed based on balances either at the beginning of the quarter, the end of the quarter, or average daily assets. Fees from private client investment portfolios and institutional fees are typically based on asset values at the end of the prior period. Asset balances are impacted by both the performance of the market and sales and redemptions of client accounts/funds. Rising markets have historically had a positive impact on investment advisory revenues as existing accounts increase in value, and individuals and institutions may commit incremental funds in rising markets. No single client accounts for a material percentage of this segment’s total business.

Stifel Bancorp

We offer retail and commercial banking services to private and corporate clients, including personal loan programs, such as fixed and variable mortgage loans, home equity lines of credit, personal loans, loans secured by CDs or savings, and securities-based loans, as well as commercial lending programs, such as small business loans, commercial real estate loans, lines of credit, credit cards, term loans, and inventory and receivables financing, in addition to other banking products. We believe Stifel Bancorp not only helps us serve our private clients more effectively by offering them a broader range of services, but also enables us to better utilize our private client cash balances held which are swept to our bank subsidiaries, which is their primary source of funding.

INSTITUTIONAL GROUP

The Institutional Group segment includes research, equity and fixed income institutional sales and trading, investment banking, public finance, and syndicate.

Research

Our research department publishes research across multiple industry groups and provides our clients with timely, insightful, and actionable research, aimed at improving investment performance.

Institutional Sales and Trading

Our equity sales and trading team distributes our proprietary equity research products and communicates our investment recommendations to our client base of institutional investors, executes equity trades, sells the securities of companies for which we act as an underwriter, and makes a market in securities. In our various sales and trading activities, we take a focused approach to serving our clients by maintaining inventory to facilitate order flow and support the investment strategies of our institutional fixed income clients, as opposed to seeking trading profits through proprietary trading.

The fixed income institutional sales and trading group is comprised of taxable and tax-exempt sales departments. Our institutional sales and trading group executes trades with diversification across municipal, corporate, government agency, and mortgage-backed securities.

Investment Banking

Our investment banking activities include the provision of financial advisory services principally with respect to mergers and acquisitions and the execution of public offerings and private placements of debt and equity securities. The investment banking group focuses on middle-market companies as well as on larger companies in targeted industries where we have particular expertise, which include real estate, financial services, healthcare, aerospace/defense and government services, telecommunications, transportation, energy, business services, consumer services, industrial, technology, and education.

Our syndicate department coordinates marketing, distribution, pricing, and stabilization of our managed equity and debt offerings. In addition, the department coordinates our underwriting participations and selling group opportunities managed by other investment banking firms.

Public Finance

Our public finance group acts as an underwriter and dealer in bonds issued by states, cities, and other political subdivisions and acts as manager or participant in offerings managed by other firms.

OTHER SEGMENT

The Other segment includes interest income from stock borrow activities, unallocated interest expense, interest income and gains and losses from investments held, amortization of stock-based awards for certain administrative associates, and all unallocated overhead costs 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.

3


 

HUMAN CAPITAL

Our associates are vital to our success. As a human capital-intensive business, our ability to attract, develop, and retain exceptional associates is critical, not only in the current competitive labor market, but also to our long-term success. As of December 31, 2023, we had over 9,000 associates, including 2,386 financial advisors, located primarily in the United States, with a growing presence in the United Kingdom, Europe, and Canada.

We have become a premier middle-market investment bank and wealth management firm. Our long-term success as a company and our ability to generate sustainable value for our shareholders is only possible because of a corporate culture that puts the needs of our clients and our associates first. As a financial services company, we believe it is our responsibility to contribute to the sustainable economic development of the communities in which we live and operate. Our culture rewards collaboration, hard work, and empathy. And at the core of that culture is the Golden Rule of treating others as one would wish to be treated.

Culture

To provide the best possible service to our clients, we hire individuals who embrace our firm’s principles, think outside the box, and introduce ideas that challenge the status quo. To create a culture that fosters a sense of belonging and an identity of being the best at what we do, we reward our associates for performance, we engage them about their needs and interests, and, as a result, we develop the best leaders in the field. At work, at home, and in our communities, we want to be our associates’ Firm of Choice.

Diversity, Equity, and Inclusion

Across the firm, there is momentum to build on our efforts to foster, cultivate, and preserve a culture of diversity, equity, and inclusion. We continue to build on past efforts so that Stifel is a place where the best talent wants to work and where people of all races, gender, sexual orientation, disability status, veteran status, or ethnicity can reach their full potential. We have taken this mission to heart, challenging ourselves to meet and beat industry averages in diversity and inclusion.

Our approach is not limited to broadening representation of those at the entry level of Stifel, but also carries over to all levels of our firm to create and sustain an environment of high retention. We continue to look at diversity holistically.

Recruitment and Talent Development

We believe our culture, our effort to maintain a meritocracy in terms of opportunity, and our continued evolution and growth contribute to our success in attracting and retaining strong talent. Our recruiting efforts are focused on identifying high achieving candidates from a variety of backgrounds. In addition to racial and gender diversity, we recognize the value that diverse experience can bring our business. Our high standards remain, allowing us to expand our search and maintain the skills and drive that make our associates so strong. As such, we have established new university partnerships, visiting campuses across the country to promote a variety of tailored summer programs and internships. To expand our reach and attract a diverse talent pool, we position our job postings on a wide variety of job boards, utilize social media, and participate in career fairs. In attracting the candidates that make up our company’s future, our entrepreneurial culture and focus on diversity and inclusion provide significant appeal.

Our associates are key to our success. Thus, we prioritize providing them with ample resources for learning and development as they progress in their careers. Mentoring opportunities along with our Senior Leaders and “Great on the Job” rising talent programs are integral to maturing leadership from within our own ranks. Supplementing these efforts are a host of learning resources available to all associates, aligned with best practices for fostering both team and individual growth.

Compensation and Benefits

To be the Firm of Choice for our associates, we are committed to providing both competitive compensation and a robust benefit package. Our competitive pay packages include base salary, incentive bonus, and equity compensation programs. Additionally, the firm makes annual contributions to support the retirement goals of each associate through a matching contribution program for the 401(k) retirement savings plan. As an additional retention tool, we may grant equity awards in connection with initial employment or under various retention programs for individuals who are responsible for contributing to our management, growth, and/or profitability. We view our associates as partners and believe that our company is most successful when our associates think and act like owners.

We have enhanced our comprehensive benefits package to represent the value we place on taking care of the talented individuals that we attract and aim to retain. The physical, emotional, and financial well-being of our associates is a high priority of the firm. To that end, programs include healthcare insurance, health and flexible savings accounts, paid time off, family leave, flexible work arrangements, tuition assistance, counseling services, access to quality child and elder care, enhanced fertility and family-building services, as well as on-site services at our corporate offices, which includes a health clinic and a fitness center.

BUSINESS CONTINUITY

We have developed a business continuity plan which is designed to permit continued operation of business-critical functions in the event of disruptions to our St. Louis, Missouri, headquarters facility as well as other critical functional areas of the firm. Several critical business functions are supported by outside vendors who maintain backup and recovery in line with our internal needs and capabilities.

4


 

We periodically participate in testing of these backup and recovery functions. Likewise, the business functions we support internally can be supported without the St. Louis headquarters through a combination of redundant computer facilities in other diverse data centers and from certain office locations which can connect to our third-party securities processing vendor through its primary or redundant facilities. Systems have been designed so that we can route critical processing activity and functions to alternate locations, which can be staffed with relocated personnel as appropriate.

GROWTH STRATEGY

We believe our strategy for growth will allow us to increase our revenues and to expand our role with clients as a valued partner. In executing our growth strategy, we take advantage of the consolidation among mid-tier firms, which we believe provides us opportunities in our global wealth and institutional group segments. We do not create specific growth or business plans for any particular type of acquisition, focus on specific firms, or geographic expansion, nor do we establish quantitative goals, such as intended numbers of new hires or new office openings; however, our corporate philosophy has always been to be in a position to take advantage of opportunities as they arise, while maintaining sufficient levels of capital. We intend to pursue the following strategies with discipline:

Further expand our private client footprint in the U.S. We have expanded the number of our private client branches from 39 at December 31, 1997 to 398 at December 31, 2023, and our branch-based financial advisors from 262 to 2,278 over the same period. In addition, client assets have grown from $11.7 billion at December 31, 1997 to $444.3 billion at December 31, 2023. Through organic growth and acquisitions, we have built a strong footprint nationally. Over time, we plan to further expand our domestic private client footprint. We plan on achieving this through recruiting experienced financial advisors with established client relationships and continuing to selectively consider acquisition opportunities as they may arise.
Grow our investment banking business. By leveraging our industry expertise, our product knowledge, our research platform, our experienced associates, our capital markets strength, our middle-market focus, and our private client network, we intend to grow our investment banking business. Opportunistic acquisitions over the past 15 years have accelerated the growth of our investment banking business through expanded industry, product, and geographic coverage, including capital-raising for start-up companies, particularly from the venture community. We believe our position as a middle-market-focused investment bank with broad-based and respected research will allow us to take advantage of opportunities in the middle market and continue to align our investment banking coverage with our research footprint.
Further expand our institutional business both domestically and internationally. Our institutional equity business is built upon the premise that high-quality fundamental research is not a commodity. The growth of our business has been fueled by the effective partnership of our highly rated research and institutional sales and trading teams. We have identified opportunities to expand our research capabilities by taking advantage of market disruptions. Our goal is to further monetize our research platform by adding additional institutional sales and trading teams and by placing a greater emphasis on client management.
Focus on asset generation within Stifel Bancorp by offering banking services to our clients. We believe the banking services provided through Stifel Bancorp strengthens our existing client relationships and helps us recruit financial advisors seeking to provide a full range of services to their private clients. We intend to continue focusing on the sale of banking products and services to our private and corporate clients.
Approach acquisition opportunities with discipline. Over the course of our operating history, we have demonstrated our ability to identify, effect, and integrate attractive acquisition opportunities. We believe the current environment and market dislocation will continue to provide us with the ability to thoughtfully consider acquisitions on an opportunistic basis.

COMPETITION

We compete with other securities firms, some of which offer their customers a broader range of brokerage services, have substantially greater resources, and may have greater operating efficiencies. In addition, we face increasing competition from other financial institutions, such as commercial banks, online service providers, and other companies offering financial services.

Our ability to compete effectively is substantially dependent on our continuing ability to develop or attract, retain, and motivate qualified financial advisors, investment bankers, trading professionals, portfolio managers, and other revenue-producing or specialized personnel. Furthermore, the labor market continues to experience elevated levels of turnover in the aftermath of the pandemic and an extremely competitive labor market, including increased competition for talent across all areas of our business, as well as increased competition with non-traditional competitors, such as technology companies. Employers are increasingly offering guaranteed contracts, upfront payments, increased compensation, and increased opportunities to work with greater flexibility, including remote work, on a permanent basis.

As we enter our 134th year in business, we continue to rely on the expertise acquired in our market area, our personnel, and our equity capital to operate in the competitive environment.

5


 

REGULATION

We continue to experience an unprecedented and dramatic increase in the pace of rulemaking affecting financial and public company regulation and supervision, as well as a high degree of scrutiny from various regulators. Recent events impacting the financial services industry, including the failure of certain banks during 2023, have resulted in and may continue to result in changes to regulations applicable to bank holding companies. Regulatory, supervisory, and investigatory activity has increased, and we expect it to continue to increase. Penalties and fines imposed by regulatory and other governmental authorities have also been substantial and growing in recent years. These changes in, as well as any further expansion of, business regulations could result in increased compliance costs. Further, any regulatory actions brought against us may result in judgments, settlements, fines, penalties, or other results, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows in the future; however, we cannot predict the exact changes or quantify their potential impacts. See “Item 1A - Risk Factors” of this Form 10-K for further discussion of the potential future impact on our operations.

The following summarizes the principal elements of the regulatory and supervisory framework applicable to our company as a participant in the financial services industry and, in particular, the banking and securities sectors. The framework includes extensive regulation under U.S. federal and state laws, as well as the applicable laws of the jurisdictions outside the U.S. in which our company does business. While the framework is intended to protect our clients, the integrity of the financial markets, our depositors, and the Federal Deposit Insurance Fund, it is not intended to protect our creditors or shareholders. These rules and regulations limit our ability to engage in certain activities, as well as our ability to fund our company from its regulated subsidiaries, which include Stifel Bancorp and our broker-dealer subsidiaries, and our trust subsidiaries. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions that are referenced. A change in applicable statutes or regulations or in regulatory or supervisory policy may have a material effect on our business.

We continue to experience a period of notable change in financial regulation and supervision. These changes could have a significant impact on how we conduct our business. Many regulatory or supervisory policies remain in a state of flux and may be subject to amendment in the near future. As a result, we cannot specifically quantify the impact that such regulatory or supervisory requirements will have on our business and operations. See “Item 1A – Risk Factors” of this Form 10-K for further discussion of the potential future impact on our operations.

Financial Holding Company Regulation

We are a bank holding company under the Bank Holding Company Act of 1956, as amended (“BHCA”), that has made an election to be a financial holding company. Consequently, our company and its business activities are subject to the supervision, examination, and regulation of the Federal Reserve Board (the “Fed”). The BHCA and other federal laws subject bank and financial holding companies to particular restrictions on the types of activities in which they may engage and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations. Supervision and regulation of bank holding companies, financial holding companies, and their subsidiaries are intended primarily for the protection of depositors and other clients of banking subsidiaries, the deposit insurance fund of the Federal Deposit Insurance Corporation (“FDIC”), and the banking system as a whole, but not for the protection of stockholders or other creditors.

Stifel Bank & Trust and Stifel Bank (collectively “bank subsidiaries”) are state-chartered banks regulated, supervised, and examined by the Fed and the Consumer Financial Protection Bureau (“CFPB”). Stifel Trust, is regulated, supervised and examined by the Office of the Comptroller of the Currency (“OCC”). The Fed and the FDIC also regulate and may examine our bank subsidiaries and, with respect to the Fed, Stifel Trust.

Collectively, the rules and regulations of the Fed, the OCC, the FDIC, and the CFPB result in extensive regulation and supervision covering all aspects of our banking and trust businesses, including, for example, lending practices, the receipt of deposits, capital structure, transactions with affiliates, conduct and qualifications of personnel, and as discussed further in the following sections, capital requirements. This regulatory, supervisory and oversight framework is subject to significant changes that can affect the operating costs and permissible businesses of our company, our bank subsidiaries, Stifel Trust, and all of our other subsidiaries. As a part of their supervisory functions, these regulatory bodies conduct extensive examinations of our operations and also have the power to bring enforcement actions for violations of law and, in the case of certain of these regulatory bodies, for unsafe or unsound practices.

Basel III and U.S. Capital Rules

Our company, as a bank and financial holding company, and our bank subsidiaries are subject to regulation, including capital requirements, by the Federal Reserve. Our bank subsidiaries are subject to various regulatory capital requirements administered by the Fed and the Missouri Division of Finance. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our company’s and our bank subsidiaries’ financial statements.

The OCC, the Fed, and the FDIC published final U.S. rules implementing the Basel III capital framework developed by the Basel Committee on Banking Supervision and certain Dodd-Frank Act and other capital provisions and updated the prompt corrective action framework to reflect the new regulatory capital minimums (the “U.S. Basel III Rules”). The U.S. Basel III Rules: (i) increased the

6


 

quantity and quality of regulatory capital; (ii) established a capital conservation buffer; and (iii) made changes to the calculation of risk-weighted assets. The capital requirements could restrict our ability to grow during favorable market conditions and to return capital to shareholders, or require us to raise additional capital. As a result, our business, results of operations, financial condition, and prospects could be adversely affected. See “Item 1A – Risk Factors” of this Form 10-K for more information.

Failure to meet minimum capital requirements can trigger discretionary, and in certain cases, mandatory actions by regulators that could have a direct material effect on the financial results of our bank subsidiaries. Under the capital adequacy guidelines, our bank subsidiaries must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under the rules. The capital amounts and classification for our bank subsidiaries are also subject to the qualitative judgments of U.S. regulators based on components of capital, risk-weightings of assets, off-balance sheet transactions, and other factors.

Under applicable capital rules, our company and its bank subsidiaries would need to obtain prior approval from the Fed if its repurchases or redemptions of equity securities over a twelve-month period would reduce its net worth by ten percent or more and an exemption were not available. Guidance from the Fed also provides that our company and its bank subsidiaries would need to inform the Fed in advance of repurchasing common stock in certain prescribed situations, such as if it were experiencing, or at risk of experiencing, financial weaknesses or considering expansion, either through acquisitions or other new activities, or if the repurchases would result in a net reduction in common equity over a quarter. Further, Fed guidance indicates that, pursuant to the Fed’s general supervisory and enforcement authority, Fed supervisory staff should prevent a bank holding company from repurchasing its common stock if such action would be inconsistent with the bank holding company’s prospective capital needs and safe and sound operation. See Note 19 of the Notes to the Consolidated Financial Statements of this Form 10-K for further information.

Source of financial strength

The Fed requires that bank holding companies, such as our company, serve as a source of financial strength for any of its subsidiary depository institutions. The term “source of financial strength” is defined as the ability of a company to provide financial assistance to its insured depository institution subsidiaries in the event of financial distress at such subsidiaries. Under this requirement, we in the future could be required to provide financial assistance to our bank subsidiaries should they experience financial distress.

Deposit insurance

Our bank subsidiaries are subject to the Federal Deposit Insurance Act because they provide deposits covered by FDIC insurance, generally up to $250,000 per account ownership type. For banks with greater than $10 billion in assets, which includes Stifel Bancorp, the FDIC’s current assessment rate calculation relies on a scorecard method based on a number of factors, including the bank’s regulatory ratings, asset quality, and amount of brokered deposits. This scorecard method is designed to measure a bank’s financial performance and ability to withstand stress, in addition to measuring the FDIC’s exposure should the bank fail. From time to time, in response to specific events, the FDIC may also enact a special assessment to recover any losses to the FDIC’s deposit insurance fund as a result of protecting uninsured depositors, such as the special assessment enacted as a result of the recent bank failures which was finalized in November 2023.

Prompt corrective action

The U.S. Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) requires the U.S. federal bank regulatory agencies to take “prompt corrective action” with respect to depository institutions that do not meet specified capital requirements. FDICIA establishes five capital categories for FDIC-insured banks, such as our bank subsidiaries: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.

An institution may be downgraded to, or deemed to be in, a capital category that is lower than the category indicated by its capital ratios if the institution is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory examination rating with respect to certain matters. FDICIA imposes progressively more restrictive constraints on operations, management, and capital distributions as the capital category of an institution declines. Failure to meet the capital requirements could also require a depository institution to raise capital. Ultimately, critically undercapitalized institutions are subject to the appointment of a receiver or conservator.

Although the prompt corrective action regulations do not apply to bank holding companies, such as our company, the Fed is authorized to take appropriate action at the bank holding company level, based upon the undercapitalized status of the bank holding company’s depository institution subsidiaries. In certain instances related to an undercapitalized depository institution subsidiary, the bank holding company would be required to guarantee the performance of the undercapitalized subsidiary’s capital restoration plan and might be liable for civil money damages for failure to fulfill its commitments on that guarantee. Furthermore, in the event of the bankruptcy of the bank holding company, this guarantee would take priority over the bank holding company’s general unsecured creditors.

The Volcker Rule

We are subject to the Volcker Rule, which generally prohibits bank holding companies and their subsidiaries and affiliates from engaging in proprietary trading, but permits underwriting, market making, and risk-mitigating hedging activities. The Volcker Rule also prohibits bank holding companies and their subsidiaries and affiliates from acquiring or retaining ownership interests in, sponsoring, or having

7


 

certain relationships with “covered funds” (as defined in the rule), including hedge funds and private equity funds, subject to certain exceptions.

Broker-Dealer and Securities Regulation

The SEC is the federal agency charged with administration of the federal securities laws in the U.S. Our U.S. broker-dealer subsidiaries are subject to SEC regulations relating to their business operations, including sales and trading practices, securities offerings and other investment banking activity, publication of research reports, use and safekeeping of client funds and securities, capital structure, record-keeping, privacy requirements, and the conduct of directors, officers and employees. Financial services firms are also subject to regulation by state securities commissions in those states in which they conduct business.

Financial services firms are also subject to regulation by various foreign governments, securities exchanges, central banks and regulatory bodies, particularly in those countries where they have established offices. Outside of the U.S., we have additional offices primarily in Canada, the U.K., and Europe and are subject to regulations in those areas. Much of the regulation of broker-dealers in the U.S. and Canada, however, has been delegated to self-regulatory organizations (“SROs”), such as FINRA in the U.S., the Canadian Investment Regulatory Organization (“CIRO”) in Canada, and securities exchanges. These SROs adopt and amend rules for regulating the industry, subject to the approval of government agencies. These SROs also conduct periodic examinations of member broker-dealers.

The SEC, SROs and other securities regulators may conduct administrative proceedings that can result in censure, fine, suspension or expulsion of a broker-dealer, its officers, employees, or other associated persons. Such administrative proceedings, whether or not resulting in adverse findings, can require substantial expenditures and may adversely impact the reputation of a broker-dealer.

Our U.S. broker-dealer subsidiaries are subject to the Securities Investor Protection Act (“SIPA”) and are required by federal law to be members of the Securities Investors Protection Corporation (“SIPC”). The SIPC was established under SIPA, and oversees the liquidation of broker-dealers during liquidation or financial distress. The SIPC fund provides protection for cash and securities held in client accounts up to $500,000 per client, with a limitation of $250,000 on claims for cash balances.

U.S. broker-dealer capital

Our U.S. broker-dealer subsidiaries are subject to certain of the SEC’s financial stability rules, including the: (i) net capital rule; (ii) customer protection rule; (iii) record-keeping rules; and (iv) notification rules. Broker-dealers are required to maintain the minimum net capital deemed necessary to meet their continuing commitments to customers and others, and are required to keep their assets in relatively liquid form. These rules also limit the ability of broker-dealers to transfer capital to parent companies and other affiliates. See Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for further information pertaining to our broker-dealer regulatory minimum net capital requirements.

Money market reform

The SEC adopted amendments to the rules that govern money market mutual funds. The amendments make structural and operational reforms to address risks of excessive withdrawals over relatively short time frames by investors from money market funds, while preserving the benefits of the funds. We do not sponsor any money market funds. We utilize funds sponsored by third parties in limited circumstances for our own investment purposes as well as to offer our clients as one of several cash sweep alternatives.

Standard of care

SEC Regulation Best Interest requires that a broker-dealer and its associated persons act in a retail customer’s best interest and not place their own financial or other interests ahead of a retail customer’s interests when recommending securities transactions or investment strategies, including recommendations of types of accounts. Form CRS requires that broker-dealers and investment advisers provide retail investors with a brief summary document containing simple, easy-to-understand information about the nature of the relationship between the parties. Our implementation of these regulations resulted in the review and modification of certain of our policies and procedures and associated supervisory and compliance controls, as well as the implementation of additional client disclosures, which included us providing related education and training to financial advisors.

Various states have also proposed, or adopted, laws and regulations seeking to impose new standards of conduct on broker-dealers that may differ from the SEC’s regulations, which may lead to additional implementation costs. In 2022, the Department of Labor (“DOL”) promulgated a new exemption that enables investment advice fiduciaries to receive transaction-based compensation and engage in certain otherwise prohibited transactions, subject to compliance with the exemption’s requirements. In 2023, the DOL indicated that it plans to amend the definition of “fiduciary” in connection with investment advice regarding employee benefit plans and IRAs. Imposing a new fiduciary standard could result in increased costs and other impacts to our business.

Investment Management Regulation

Our investment advisory operations, including the mutual funds that we sponsor, are also subject to extensive regulation in the U.S. Our U.S. asset managers are registered as investment advisers with the SEC under the Investment Advisers Act of 1940 as amended, and are also required to make notice filings in certain states. Virtually all aspects of our asset management business are subject to various federal and state laws and regulations. These laws and regulations are primarily intended to benefit the asset management clients.

8


 

Other Non-U.S. Regulation

Our non-U.S. subsidiaries are subject to applicable laws and regulations of the jurisdictions in which they operate.

SNC, a wholly owned subsidiary, is currently registered as an investment dealer in all provinces and territories in Canada. The financial services industry in Canada is subject to comprehensive regulation under both federal and provincial laws. Securities commissions have been established in all provinces and territorial jurisdictions, which are charged with the administration of securities laws. Investment dealers in Canada are subject to regulation by CIRO, an SRO under the oversight of the securities commissions that make up the Canadian Securities Administrators. CIRO is responsible for the enforcement of, and conformity with, securities legislation for their members and has been granted the powers to prescribe their own rules of conduct and financial requirements of members. CIRO also requires that SNC be a member of the Canadian Investors Protection Fund, whose primary role is investor protection. This fund provides protection for securities and cash held in client accounts up to 1 million Canadian dollars (“CAD”) per client, with additional coverage of CAD 1 million for certain types of accounts.

Certain of our subsidiaries are registered in, and operate from, the U.K., which has a highly developed and comprehensive regulatory regime. These subsidiaries are authorized and regulated by the U.K. conduct regulator, the Financial Conduct Authority (“FCA”), and have permission to carry out business in certain European Union (“E.U.”) countries to the extent permitted under domestic law and regulation in those countries. The FCA operates on a statutory basis and creates rules which are largely principles-based. These regulated U.K. subsidiaries and their senior managers are registered with the FCA, and wealth managers and certain other staff are subject to certification requirements. Certain of these subsidiaries operate in the retail sector, providing investment and financial planning services to high-net-worth individuals, while others provide brokerage and investment banking services to institutional clients. Retail clients of our U.K. subsidiaries benefit from the Financial Ombudsman Service, which settles complaints between consumers and businesses that provide financial services, as well as the Financial Services Compensation Scheme, which is the U.K.’s statutory deposit insurance and investors compensation scheme for customers of authorized financial services firms.

In Europe, the Markets in Financial Instruments Regulation and a revision of the Markets in Financial Instruments Directive (collectively referred to as “MiFID II”) imposes certain restrictions as to the trading of shares and derivatives including market structure-related, reporting, investor protection-related and organizational requirements, requirements on pre- and post-trade transparency, requirements to use certain venues when trading financial instruments (which includes shares and certain derivative instruments), requirements affecting the way investment managers can obtain research, powers of regulators to impose position limits, and provisions on regulatory sanctions.

Bank Secrecy Act and USA PATRIOT Act of 2001

The U.S. Bank Secrecy Act (“BSA”), as amended by the USA PATRIOT Act of 2001 (“PATRIOT Act”), the Customer Due Diligence Rule, and the Anti-Money Laundering Act of 2020 (“AMLA”), contains anti-money laundering and financial transparency laws and mandates the implementation of various regulations applicable to all financial institutions, including standards for verifying client identification at account opening, and obligations to monitor client transactions and report suspicious activities. Through these and other provisions, the BSA, the PATRIOT Act, and AMLA seek to promote the identification of parties that may be involved in terrorism, money laundering, or other suspicious activities. Anti-money laundering laws outside the U.S. contain some similar provisions.

The U.S. Treasury’s Office of Foreign Assets Control administers economic and trade sanctions programs and enforces sanctions regulations with which all U.S. persons must comply. The E.U. as well as various countries have also adopted economic sanctions programs targeted at countries, entities, and individuals that are involved in terrorism, hostilities, embezzlement, or human rights violations.

In addition, various countries have adopted laws and regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, related to corrupt and illegal payments to, and hiring practices with regard to, government officials and others. The scope of the types of payments or other benefits covered by these laws is very broad and is subject to significant uncertainties that may be clarified only in the context of further regulatory guidance or enforcement proceedings.

Our company and its affiliates have implemented and maintain internal policies, procedures, and controls to meet the compliance obligations imposed by such U.S. and non-U.S. laws and regulations concerning anti-money laundering, economic sanctions, and anti-bribery and corruption. Failure to continue to meet the requirements of these regulations could result in supervisory action, including fines.

Privacy and Data Protection

U.S. federal law establishes minimum federal standards for financial privacy by, among other provisions, requiring financial institutions to adopt and disclose privacy policies with respect to consumer information and setting forth certain limitations on disclosure to third parties of consumer information. U.S. state laws and regulations adopted under U.S. federal law impose obligations on our company and its subsidiaries for protecting the confidentiality, integrity, and availability of client information, and require notice of data breaches to certain U.S. regulators and to clients. The Fair Credit Reporting Act of 1970, as amended, mandates the development and implementation of a written identity theft prevention program that is designed to detect, prevent, and mitigate identity theft.

9


 

The California Privacy Rights Act (“CPRA”) amended the California Consumer Privacy Act of 2020 and became enforceable in 2023. CPRA regulations updated the existing privacy protections for the personal information of California residents, including by requiring companies to provide certain additional disclosures to California consumers, and provides for a number of specific additional data subject rights for California residents.

Similarly, the General Data Protection Regulation (“GDPR”) imposes requirements for companies that collect or store personal data of E.U. residents, as well as residents of the U.K. GDPR’s legal requirements extend to all foreign companies that solicit and process personal data of E.U. and U.K. residents, imposing a strict data protection compliance regime that includes consumer rights actions that must be responded to by organizations. Canadian data privacy laws contain many provisions similar to U.S. financial privacy laws and are currently undergoing legislative reform at a federal and provincial level.

We have implemented policies, processes, and training with regard to communicating to our clients and business partners required information relating to financial privacy and data security. We continue to monitor regulatory developments on both a domestic and international level to assess requirements and potential impacts on our business operations.

The multitude of data privacy laws and regulations adds complexity and cost to managing compliance and data management capabilities and can result in potential litigation, regulatory fines, and reputational harm. Data privacy requirements affect business processes and compel companies to track personal information use and provide greater transparency on data practices to consumers. In addition, technology advances in the areas of artificial intelligence, mobile applications, and remote connectivity solutions have increased the collection and processing of personal information as well as the risks associated with unauthorized disclosure and access to personal information.

Alternative Reference Rate Transition

The FCA, which regulated the widely referenced benchmark London Interbank Offered Rate (“LIBOR”), ceased publication of the most commonly used U.S. dollar (“USD”) LIBOR tenors (“USD LIBOR”) on June 30, 2023. On September 30, 2022, the Adjustable Interest (LIBOR) Rate Act (“LIBOR Act”) was enacted into U.S. federal law to provide a statutory framework to replace LIBOR with a benchmark rate based on the secured overnight financing rate (“SOFR”) in contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR. As of December 31, 2023, we no longer offer new contracts referencing LIBOR and legacy contracts indexed to USD LIBOR have transitioned to SOFR-based or other alternative reference rates in accordance with existing fallback provisions or the LIBOR Act.

Public Company Regulations

As a public company whose common stock is listed on the New York Stock Exchange (“NYSE”) and the Chicago Stock Exchange (“CHX”), we are subject to corporate governance requirements established by the SEC, NYSE, and CHX, as well as federal and state law. Under the Sarbanes-Oxley Act of 2002 (the “Act”), we are required to meet certain requirements regarding business dealings with members of the Board of Directors, the structure of our Audit and Compensation Committees, ethical standards for our senior financial officers, implementation of an internal control structure and procedures for financial reporting, and additional responsibilities regarding financial statements for our Chief Executive Officer and Chief Financial Officer and their assessment of our internal controls over financial reporting. Compliance with all aspects of the Act, particularly the provisions related to management's assessment of internal controls, has imposed additional costs on our company, reflecting internal staff and management time, as well as additional audit fees since the Act went into effect.

Executive Officers

Information regarding our executive officers and their ages as of February 1, 2024, is as follows:

Name

 

Age

 

Position(s)

Ronald J. Kruszewski

 

65

 

Chairman of the Board of Directors and Chief Executive Officer

Thomas W. Weisel

 

82

 

Senior Managing Director and Director

James M. Zemlyak

 

64

 

President

Thomas B. Michaud

 

59

 

Senior Vice President

Victor J. Nesi

 

63

 

President and Director of Institutional Group

Mark P. Fisher

 

54

 

Senior Vice President and General Counsel

James M. Marischen

 

44

 

Senior Vice President and Chief Financial Officer

David D. Sliney

 

54

 

Senior Vice President and Chief Operating Officer

Christopher K. Reichert

 

60

 

Chief Executive Officer of Stifel Bank & Trust

Ronald J. Kruszewski has been Chief Executive Officer and Director of our company and Stifel since September 1997 and Chairman of the Board of Directors of our company and Stifel since April 2001. Prior thereto, Mr. Kruszewski served as Managing Director and Chief Financial Officer of Baird Financial Corporation and Managing Director of Robert W. Baird & Co. Incorporated, a securities broker-dealer firm, from 1993 to September 1997.

10


 

Thomas W. Weisel has been Senior Managing Director of our company since August 2010, after the completion of the merger between our company and Thomas Weisel Partners Group, Inc. Prior thereto, Mr. Weisel served as Chairman and CEO of Thomas Weisel Partners Group, Inc., a firm he founded, from 1998 to June 2010. Prior to founding Thomas Weisel Partners, Mr. Weisel was a founder, in 1971, of Robertson, Coleman, Siebel & Weisel that became Montgomery Securities in 1978, where he was Chairman and CEO until September 1998. Mr. Weisel served as a director on the NASDAQ Stock Market board of directors from 2002 to 2006.

James M. Zemlyak was named to the Office of the President in June 2014. Mr. Zemlyak served as Chief Financial Officer of our company from February 1999 to August 2018. Mr. Zemlyak served as Director of our company from February 1999 to June 2017. Mr. Zemlyak served as our company’s Treasurer from February 1999 to January 2012. Mr. Zemlyak has been Chief Operating Officer of Stifel since August 2002 and Executive Vice President of Stifel since December 1, 2005. Mr. Zemlyak also served as Chief Financial Officer of Stifel from February 1999 to October 2006. Prior to joining our company, Mr. Zemlyak served as Managing Director and Chief Financial Officer of Baird Financial Corporation from 1997 to 1999 and Senior Vice President and Chief Financial Officer of Robert W. Baird & Co. Incorporated from 1994 to 1999.

Thomas B. Michaud has served as Senior Vice President of our company and Chairman, Chief Executive Officer, and President of Keefe, Bruyette & Woods, Inc., one of our broker-dealer subsidiaries, since February 15, 2013, the completion of the merger between our company and KBW, Inc. Mr. Michaud served as Director of our company from February 2013 to June 2017. Prior thereto, Mr. Michaud served as the Chief Executive Officer and President of KBW, Inc. since October 2011 and as Vice Chairman and director since its formation in August 2005. He previously served as Chief Operating Officer from August 2005 until October 2011.

Victor J. Nesi was named to the Office of the President in June 2014. Mr. Nesi has served as Director of Investment Banking and Director of our Institutional Group since July 2009. Mr. Nesi served as Director of our company from August 2009 to June 2017. Mr. Nesi has more than 30 years of banking and private equity experience, most recently with Merrill Lynch, where he headed the global private equity business for the telecommunications and media industry. From 2005 to 2007, he directed Merrill Lynch’s investment banking group for the Americas region. Prior to joining Merrill Lynch in 1996, Mr. Nesi spent seven years as an investment banker at Salomon Brothers and Goldman Sachs.

Mark P. Fisher has served as Senior Vice President since July 2010 and General Counsel since May 2014. Mr. Fisher served as General Counsel of Thomas Weisel Partners Group, Inc. from May 2005 until the merger between our company and Thomas Weisel Partners Group, Inc. in July 2010. From January 1998 until May 2005, Mr. Fisher practiced corporate and securities law at Sullivan & Cromwell LLP.

James M. Marischen was appointed Chief Financial Officer of our company and Stifel in August 2018. Prior thereto, Mr. Marischen served as Senior Vice President and Chief Risk Officer of our company from January 2014 to August 2018. During 2015, Mr. Marischen was named our Chief Accounting Officer. Mr. Marischen served as Executive Vice President and Chief Financial Officer of Stifel Bank & Trust from February 2008 to January 2014. Prior to joining our company in 2008, Mr. Marischen worked in public accounting at KPMG LLP.

David D. Sliney was appointed to Chief Operating Officer of our company in August 2018. Mr. Sliney has been a Senior Vice President of our company since May 2003. In 1997, Mr. Sliney began a Strategic Planning and Finance role with Stifel and has served as a Director of Stifel since May 2003. Mr. Sliney is also responsible for our company’s Operations and Technology departments. Mr. Sliney joined Stifel in 1992, and between 1992 and 1995, Mr. Sliney worked as a fixed income trader and later assumed responsibility for the firm’s Equity Syndicate Department.

Christopher K. Reichert has served as Chief Executive Officer of Stifel Bank & Trust since January 2008. Prior thereto, Mr. Reichert served as President of Stifel Bank & Trust from October 2007 to January 2008. Prior to joining the company in 2007, Mr. Reichert served as Executive Vice President of Pulaski Bank and was a member of the Pulaski Bank and Pulaski Financial Corp. Board of Directors.

AVAILABLE INFORMATION

Our internet address is www.stifel.com. We make available, free of charge, through a link to the SEC web site, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Additionally, we make available on our web site under “Investor Relations – Corporate Governance,” and in print upon request of any shareholder, a number of our corporate governance documents. These include: Audit Committee charter, Compensation Committee charter, Risk Management/Corporate Governance Committee charter, Corporate Governance Guidelines, Complaint Reporting Process, and the Code of Ethics for Employees. Within the time period required by the SEC and the NYSE, we will post on our web site any modifications to any of the available documents. The information on our web site is not incorporated by reference into this report.

ITEM 1A. RISK FACTORS

11


 

Our operations and financial results are subject to various risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, liquidity and the trading price of our common stock. The list of risk factors provided in the following sections is not exhaustive; there may be factors not discussed in the following sections or in this Form 10-K that adversely impact our results of operations, harm our reputation or inhibit our ability to generate new business prospects. We may amend or supplement these risk factors from time to time in other reports we file with the SEC.

MARKET AND LIQUIDITY RISKS

Lack of funding, liquidity, or access to capital could impair our business and financial condition. An inability to maintain adequate funding and liquidity to operate our business could have a significant negative effect on our financial condition. We have a contingency funding plan which would guide our actions if one or more of our businesses were to experience disruptions from normal funding and liquidity sources. If the available funding from one or more of our contingent funding sources is not sufficient to sustain normal operating levels, we may be required to scale back or curtail our operations, such as by limiting lending, selling assets at unfavorable prices, cutting or eliminating dividend payments, or limiting our recruiting of financial advisors. Our liquidity could be negatively affected by: any inability of our subsidiaries to generate cash to distribute to the parent company, liquidity or capital requirements that may prevent our subsidiaries from distributing cash, limitations on our subsidiaries’ access to credit markets for secured and unsecured borrowings, diminished access to the credit and capital markets, and other commitments or restrictions on capital as a result of adverse legal settlements, judgments, regulatory sanctions, or an adverse change in our credit rating by one or more of the national rating agencies that rate us. Furthermore, as a bank holding company, we may become subject to prohibitions or limitations on our ability to pay dividends to our shareholders and/or repurchase our stock. Certain of our regulators have the authority, and under certain circumstances, the duty, to prohibit or to limit dividend payments by regulated subsidiaries to their parent company.

The availability of financing, including access to the credit and capital markets, depends on various factors, such as conditions in the debt and equity markets, the general availability of credit, the volume of securities trading activity, the overall availability of credit to the financial services sector, and our credit ratings. Our cost of capital and the availability of funding may be adversely affected by illiquid credit markets, wider credit spreads, or our inability to pay a prevailing rate of interest that is competitive with other market offerings. Additionally, lenders may from time to time curtail, or even cease to provide, funding to borrowers as a result of future concerns over the strength of specific counterparties, as well as the stability of markets generally.

Significant volatility in our domestic clients’ cash sweep and bank deposit balances could negatively affect our net revenues and/or our ability to fund our bank subsidiaries’ growth and may impact our regulatory capital ratios.

We rely heavily on bank deposits as a low-cost source of funding for Stifel Bancorp to extend loans to clients and purchase investment securities. Our bank deposits are primarily driven 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. A significant reduction in our domestic clients’ cash balances, a change in the allocation of that cash between our bank subsidiaries and third-party banks, a movement of cash away from our company, or an inability to implement new or modified deposit offerings in order to retain or grow our client base, could significantly impact our ability to continue growing interest-earning assets and/or require us to use higher-cost deposit sources to grow interest-earning assets. Rapidly rising rates, for example, have made and may continue to make investments in securities, such as fixed income securities and money market funds, more attractive for investors, thereby incentivizing them to reduce the cash they hold.

A downgrade in our credit ratings could have a material adverse effect on our operations, earnings, and financial condition. If our credit ratings were downgraded, or if rating agencies indicate that a downgrade may occur, our business, financial position, and results of operations could be adversely affected, perceptions of our financial strength could be damaged, and as a result, adversely affect our client relationships. Such a change in our credit ratings could also adversely affect our liquidity and competitive position, increase our borrowing costs, limit our access to the capital and credit markets, trigger obligations under certain financial agreements, cause clients to withdraw bank deposits that exceed FDIC insurance limits from our bank subsidiaries, or decrease the number of investors, clients, and counterparties willing or permitted to do business with or lend to us, thereby curtailing our business operations and reducing profitability.

We may not be able to obtain additional outside financing to fund our operations on favorable terms, or at all. The impact of a credit rating downgrade to a level below investment grade would result in our breaching provisions in certain of our credit agreements, and may result in decreased levels of available credit or a request for immediate payment.

A credit rating downgrade would also result in the Company incurring a higher facility fee on its $750 million unsecured revolving credit facility agreement (the “Credit Facility”), in addition to triggering a higher interest rate applicable to any borrowings outstanding on the line as of and subsequent to such downgrade. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” of this Form 10-K and Note 11 of the Notes to Consolidated Financial Statements of this Form 10-K for information on the Credit Facility.

We are exposed to market risk, including interest rate risk. Market risk generally represents the risk that values of assets and liabilities or revenues will be adversely affected by changes in market conditions, which directly and indirectly affect us. Market conditions that

12


 

change from time to time, thereby exposing us to market risk, include fluctuations in interest rates, equity prices, foreign exchange rates, and price deterioration or changes in value due to changes in market perception, actual credit quality of an issuer, or other factors such as any potential shutdown of the U.S. government or downgrade of the U.S. government’s credit rating.

Market risk is inherent in financial instruments associated with our operations and activities, including loans, deposits, securities, short-term borrowings, long-term debt, trading assets and liabilities, derivatives, and investments. For example, interest rate increases could continue to adversely affect the value of our available-for-sale securities portfolio. Interest rate changes could also adversely affect the value of our fixed income inventories, as well as our net interest spread, which is the difference between the yield we earn on our interest-earning assets and the interest rate we pay for deposits and other sources of funding, in turn impacting our net interest income and earnings. Interest rate changes could affect the interest earned on assets differently than interest paid on liabilities.

In our brokerage operations, a rising interest rate environment generally results in our earning a larger net interest spread and an increase in servicing fees received on our multi-bank deposit sweep program but also increases our costs of funds. Conversely, in those operations, a falling interest rate environment generally results in our earning less interest income and lower servicing fees from third-party program banks, and also reduces our cost of funds. In a falling interest rate environment, we may not be able to reduce our cost of funds as quickly as we experience a decrease in interest income. The magnitude of the impact of interest rate changes to our net interest spread depends on the yields on interest-earning assets relative to the cost of interest-bearing liabilities, including deposit rates paid to clients on their cash balances. If we are unable to effectively manage our interest rate risk, changes in interest rates could have a material adverse effect on our profitability.

In addition, disruptions in the liquidity or transparency of the financial markets may result in our inability to sell, syndicate, or realize the value of security positions, thereby leading to increased concentrations. The inability to reduce our positions in specific securities may not only increase the market and credit risks associated with such positions, but also increase the level of risk-weighted assets on our balance sheet, thereby increasing our capital requirements, which could have an adverse effect on our business results, financial condition and liquidity.

We are exposed to credit risk. We are generally exposed to the risk that third parties that owe us money, securities, or other assets will fail to meet their obligations to us due to numerous causes, including bankruptcy, lack of liquidity, or operational failure, among others. Credit risk may also be affected by the deterioration of strength in the U.S. economy or adverse changes in the financial performance or condition of our clients and counterparties. We actively buy and sell securities from and to clients and counterparties in the normal course of our broker-dealers’ trading and underwriting activities, which exposes us to credit risk. Although generally collateralized by the underlying security to the transaction, we still face risk associated with changes in the market value of collateral through settlement date. We also hold certain securities, loans, and derivatives as part of our trading operations. Deterioration in the actual or perceived credit quality of the underlying issuers of securities or loans, or the non-performance of counterparties to certain derivative contracts could result in losses.

We borrow securities from, and lend securities to, other financial institutions, and may also enter into agreements to repurchase and/or resell securities as part of our financing activities. A sharp change in the market values of the securities utilized in these transactions may result in losses if counterparties to these transactions fail to honor their commitments.

We manage the risk associated with these transactions by establishing and monitoring credit limits, as well as by evaluating collateral and transaction levels on a recurring basis. Significant deterioration in the credit quality of one of our counterparties could lead to widespread concerns about the credit quality of other counterparties in the same industry, thereby exacerbating our credit risk.

In addition, we permit our clients to purchase securities on margin. During periods of steep declines in securities prices, the value of the collateral securing client margin loans may fall below the amount of the loan. If clients are unable to provide additional collateral for these margin loans, we may incur losses on those margin transactions. This may cause us to incur additional expenses defending or pursuing claims or litigation related to counterparty or client defaults.

We deposit our cash in depository institutions as a means of maintaining the liquidity necessary to meet our operating needs, and we also facilitate the deposit of cash awaiting investment in depository institutions on behalf of our clients. A failure of a depository institution to return these deposits could severely impact our operating liquidity, result in significant reputational damage, and adversely impact our financial performance.

We also incur credit risk by lending to businesses and individuals through the offering of loans, including commercial and industrial loans, commercial and residential mortgage loans, tax-exempt loans, home equity lines of credit, and other loans generally collateralized by securities. We also incur credit risk through certain of our investments. Our credit risk and credit losses can increase if our loans or investments are concentrated among borrowers or issuers engaged in the same or similar activities, industries, or geographies, or to borrowers or issuers who as a group may be uniquely or disproportionately affected by economic or market conditions. Declines in the real estate market or sustained economic downturns may cause us to experience credit losses or charge-offs related to our loans, sell loans at unattractive prices, or foreclose on certain real estate properties. Furthermore, the deterioration of an individually large exposure, for example due to natural disasters, health emergencies or pandemics, acts of terrorism, severe weather events or other adverse

13


 

economic events, could lead to additional credit loss provisions and/or charges-offs, and subsequently have a material impact on our net income and regulatory capital.

ECONOMIC ENVIRONMENT RISKS

Our business is sensitive to domestic and international macroeconomic conditions caused by political and geopolitical developments, fiscal, monetary, and tax policies, regulations, and other domestic and international events. We are engaged in various financial services businesses. As such, we are affected by domestic and international macroeconomic and political conditions, as well as economic output levels, interest and inflation rates, employment levels, prices of commodities, consumer confidence levels, changes in consumer spending, international trade policy, and fiscal and monetary policy. For example, Fed policies determine, in large part, interest rates and the cost of funds which directly affect the returns and fair value on our lending and investing activities. The market impact from such policies can also decrease materially the value of certain of our financial assets, most notably debt securities, as well as our cash flows. Changes in tax law and regulation, or any market uncertainty caused by a change in the political environment, may affect our clients and, directly or indirectly, our business. Macroeconomic conditions may also be negatively affected by domestic or international events, including natural disasters, political unrest, the indirect impact of wars, such as the wars in Ukraine and Israel, or public health epidemics and pandemics, as well as by a number of factors in the global financial markets that may be detrimental to our operating results, including trading levels, investing, and origination activity in the securities markets, security valuations, the absolute and relative level and volatility of interest and currency rates, real estate values, the actual and perceived quality of issuers and borrowers, and the supply of and demand for loans and deposits.

If we were to experience a period of sustained downturn in the securities markets, credit market dislocations, reductions in the value of real estate, increases in mortgage and other loan delinquencies, or other negative market factors, our revenues and the value of the assets we own could be adversely impacted. Market uncertainty could also cause clients to move their investments to lower margin products, or withdraw them, which could have an adverse impact on our profitability. We could also experience a material reduction in trading volume and lower asset prices in times of market uncertainty, which would result in lower brokerage revenues, including losses on firm inventory, as well as losses on certain of our investments. Conversely, periods of severe market volatility may result in a significantly higher level of transactions and other activity which may cause operational challenges that may result in losses. These can include, but are not limited to, trade errors, failed transaction settlements, late collateral calls to borrowers and counterparties, credit losses, or interruptions to our system processing. Periods of reduced revenue and other losses could lead to reduced profitability because certain of our expenses, including our interest expense on debt, lease expenses, and salary expenses, are fixed, and our ability to reduce them over short time periods is limited.

We do business in other parts of the world and, as a result, are exposed to risks, including market, litigation, and regulatory compliance risks. Our businesses and revenues derived from non-U.S. operations are subject to risk of loss from currency fluctuations, social or political instability, less established regulatory regimes, changes in governmental or central bank policies, downgrades in the credit ratings of sovereign countries, expropriation, nationalization, confiscation of assets, and unfavorable legislative, economic, and political developments. Action or inaction in any of these operations, including failure to follow proper practices with respect to regulatory compliance and/or corporate governance, could harm our operations and our reputation. We also invest or trade in the securities of corporations located in non-U.S. jurisdictions. Revenues from trading non-U.S. securities also may be subject to negative fluctuations as a result of the previously mentioned factors.

OPERATIONAL RISKS

Damage to our reputation could damage our businesses. Maintaining our reputation is critical to attracting and maintaining clients, investors, financial advisors, and other associates. If we fail to address, or appear to fail to address, issues that may give rise to reputational risk, we could significantly harm our business prospects. These issues may include, but are not limited to, any of the risks discussed in this Item 1A, including appropriately dealing with potential conflicts of interest, legal and regulatory requirements, ethical issues, money laundering, cybersecurity and privacy, record keeping, sales and trading practices, and associate misconduct. In addition, the failure to either sell securities we have underwritten at anticipated price levels or to properly identify and communicate the risks inherent in the products and services we offer could also give rise to reputational risk. Failure to maintain appropriate service and quality standards, or a failure or perceived failure to treat clients fairly, can result in client dissatisfaction, litigation, and heightened regulatory scrutiny, all of which can lead to lost revenue, higher operating costs, and reputational harm. Negative publicity about us, including information posted on social media and internet forums or published by news organizations, whether or not true, may also harm our reputation. The speed and pervasiveness with which information can be disseminated through these channels, in particular social media, may magnify risk relating to negative publicity. Further, failures at other large financial institutions or other market participants, regardless of whether they relate to our activities, could lead to a general loss of customer confidence in financial institutions that could negatively affect us, including harming the market perception of the financial system in general.

Our ability to attract and retain senior professionals, qualified financial advisors, and other associates is critical to the continued success of our business. Our ability to recruit, serve, and retain our clients depends on the reputation, judgment, leadership, business generation capabilities, and skills of our client-serving professionals, members of our executive team, as well as associates who support revenue-generating professionals and their clients. To compete effectively, we must attract, develop, and retain qualified professionals,

14


 

including successful financial advisors, investment bankers, trading professionals, portfolio managers, and other revenue-producing or specialized support personnel. Further, effective management succession planning is important for the continued success of our company. Competitive pressures we experience, or inadequate management succession planning, could have an adverse effect on our business, results of operations, financial condition, and liquidity.

The labor market remains competitive, and we face competition for talent across all aspects of our business, as well as competition with non-traditional firms, such as technology companies. Employers are developing a wide variety of offerings to attract talent, including but not limited to, increasing compensation, enhancing health and wellness solutions, and providing in-office, hybrid, and remote work options. These can be important factors in a current associate’s decision to leave us as well as in a prospective associate’s decision to join us. As competition for skilled professionals remains intense, we may have to devote significant resources to attract and retain qualified personnel, which could negatively affect earnings.

Specifically within the financial industry, employers are increasingly offering guaranteed contracts, upfront payments, and increased compensation. Our financial results may be adversely affected by the costs we incur in connection with any loans or other incentives we may offer to newly recruited financial advisors and other key personnel.

If we were to lose the services of any of our financial advisors, investment bankers, senior equity research, sales and trading professionals, asset managers, or executive officers to a competitor or otherwise, we may not be able to retain valuable relationships and some of our clients could choose to use the services of a competitor instead of our services. If we are unable to retain our senior professionals or recruit additional professionals, our reputation, business, results of operations, and financial condition will be adversely affected. To the extent we have compensation targets, we may not be able to retain our associates, which could result in increased recruiting expense or result in our recruiting additional associates at compensation levels that are not within our target range. Further, new business initiatives and efforts to expand existing businesses generally require that we incur compensation and benefits expense before generating additional revenues.

Moreover, companies in our industry whose employees accept positions with competitors frequently claim that those competitors have engaged in unfair hiring practices. We have been subject to several such claims and may be subject to additional claims in the future as we seek to hire qualified personnel, some of whom may work for our competitors. Some of these claims may result in material litigation. We could incur substantial costs in defending against these claims, regardless of their merits. Such claims could also discourage potential employees who work for our competitors from joining us. We participate, with limited exceptions, in the Protocol for Broker Recruiting (“Protocol”), a voluntary agreement among many firms in the industry that governs, among other things, the client information that financial advisors may take with them when they affiliate with a new firm and the financial advisor’s ability to solicit clients of their previous firm. The ability to bring such client data to a new broker-dealer, as well as the ability to solicit clients, generally means that the clients of the financial advisor are more likely to choose to open accounts at the advisor’s new firm. Participation is voluntary, and it is possible that certain of our competitors will withdraw from the Protocol. If the broker-dealers from whom we recruit new financial advisors prevent, or significantly limit, the transfer of client data and the solicitation of clients, our recruiting efforts may be adversely affected. Additionally, we could experience a larger number of claims against us relating to our recruiting efforts.

Our business depends on fees earned from the management of client accounts and asset management fees. We have grown our asset management business in recent years, which has increased the risks associated with this business relative to our overall operations. The asset management fees we are paid are dependent upon the value of client assets in fee-based accounts in our Private Client Group segment, as well as assets under management (“AUM”) in our asset management business. The value of our fee-based assets and AUM is impacted by market fluctuations and inflows or outflows of assets. As our Private Client Group clients increasingly show a preference for fee-based accounts over transaction-based accounts, a larger portion of our client assets are more directly impacted by market movements. Therefore, in periods of declining market values, the values of fee-based accounts and AUM may resultantly decline, which would negatively impact our revenues. In addition, below-market investment performance by our funds, portfolio managers, or financial advisors could result in reputational damage that might cause outflows or make it more difficult to attract new investors into our asset management products and thus further impact our business and financial condition.

Our asset management fees may also decline over time due to factors such as increased competition and the renegotiation of contracts. In addition, the market environment in recent years has resulted in a shift to passive investment products, which generate lower fees than actively managed products. A continued trend toward passive investments or changes in market values or in the fee structure of asset management accounts would negatively affect our revenues, business, and financial condition.

Our underwriting, market-making, trading, and other business activities place our capital at risk. We may incur losses and be subject to reputational harm to the extent that, for any reason, we are unable to sell securities we have underwritten at anticipated price levels. As an underwriter, we also are subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings in which we are involved. While it is not typical, from time to time and as part of our underwriting processes, we may carry significant positions in securities of a single issuer or issuers engaged in a specific industry. Sudden changes in the value of these positions, despite our risk mitigation policies, could impact our financial results.

15


 

As a market-maker, we may take ownership of positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may result in greater losses than would be the case if our holdings were more diversified. Despite risk mitigation policies, we may incur losses as a result of positions we hold in connection with these activities.

The soundness of other financial institutions and intermediaries affects us. We face the risk of operational failure, termination, or capacity constraints of any of the clearing agents, exchanges, clearing houses, or other financial intermediaries that we use to facilitate our securities transactions. As a result of regulatory changes and the consolidation over the years among clearing agents, exchanges, and clearing houses, our exposure to certain financial intermediaries has increased and could affect our ability to find adequate and cost-effective alternatives should the need arise. Any failure, termination, or constraint of these intermediaries could adversely affect our ability to execute transactions, service our clients, and manage our exposure to risk.

Our ability to engage in routine trading and funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interdependent as a result of trading, clearing, funding, counterparty, or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. Defaults by, or even rumors or questions about the financial condition of, one or more financial services institutions, or the financial services industry generally, have historically led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due us. Losses arising in connection with counterparty defaults may have a material adverse effect on our results of operations.

We deposit our cash in depository institutions as a means of maintaining the liquidity necessary to meet our operating needs, and we also facilitate the deposit of cash awaiting investment in depository institutions on behalf of our clients. Many of these deposits exceed FDIC-insured limits. Recent events in the financial services industry, including the failure of certain banks, have increased counterparty credit risk. While we perform extensive diligence on the banks we select to hold these deposits, a failure of one or more of these depository institutions to return these deposits could affect our operating liquidity, result in reputational damage, and impair our financial performance.

We face intense competition and pricing pressures and may not be able to keep pace with technological change. We are engaged in intensely competitive businesses. We compete on the basis of a number of factors, including the quality of our associates, our products and services, pricing (such as execution pricing and fee levels), technology solutions, and location and reputation in relevant markets. Over time, there has been substantial consolidation and convergence among companies in the financial services industry, which has significantly increased the capital base and geographic reach of our competitors. See “Item 1 – Business - Competition” of this Form 10-K for additional information about our competitors.

We compete directly with other national full-service broker-dealers, investment banking firms, commercial banks, and investment managers, and to a lesser extent, with discount brokers and dealers and investment advisers. We face competition from more recent entrants into the market, including fintechs, and increased use of alternative sales channels by other firms. Technology has lowered barriers to entry and made it possible for fintechs to compete with larger financial institutions in providing electronic, internet-based, and mobile phone-based financial solutions. This competition has grown significantly over recent years and is expected to intensify. In addition, commercial firms and other non-traditional competitors have applied for banking licenses or have entered into partnerships with banks to provide banking services. We also compete indirectly for investment assets with insurance companies, real estate firms, and hedge funds, among others. Competition from other financial services firms to attract clients or trading volume, through direct-to-investor online financial services, or higher deposit rates to attract client cash balances, could result in pricing pressure or otherwise adversely impact our business and cause our business to suffer.

Our future success also depends in part on our ability to develop, maintain, and enhance our products and services, including factors such as customer experience, and the pricing and range of our offerings. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services. If we are not able to develop new products and services, enhance existing offerings, effectively implement new technology-driven products and services, or successfully market these products and services to our customers, our business, financial condition, or results of operations may be adversely affected. Furthermore, both financial institutions and their non-banking competitors face the risk that payments processing and other services could be significantly disrupted by technologies, such as cryptocurrencies, that require no intermediation. New technologies have required, and could require us in the future, to spend more to modify or adapt our products to attract and retain clients or to match products and services offered by our competitors, including technology companies. 

We must monitor the pricing of our services and financial products in relation to competitors and periodically may need to adjust our fees, commissions, margins, or interest rates on deposits to remain competitive. In fixed income markets, regulatory requirements have resulted in greater price transparency, leading to price competition and decreased trading margins. Our trading margins have been further compressed by the shift from high- to low-touch services over time, which has created additional competitive pressure. We believe that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce the amounts

16


 

they are willing to pay, including by reducing the number of brokerage firms they use, and some of our competitors seek to obtain market share by reducing fees, commissions, or margins.

We are exposed to operational risk. Our diverse operations expose us to risk of loss resulting from inadequate or failed internal processes, people, and systems external events, including technological or connectivity failures either at the exchanges in which we do business or between our data centers, operations processing sites, or our branches. Our businesses depend on our ability to process and monitor, on a daily basis, a large number of complex transactions across numerous and diverse markets. The inability of our systems to accommodate an increasing volume of transactions could also constrain our ability to expand our businesses. Our financial, accounting, data processing, or other operating systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond our control, adversely affecting our ability to process these transactions or provide these services. Operational risk exists in every activity, function, or unit of our business, and can take the form of internal or external fraud, employment and hiring practices, an error in meeting a professional obligation, or failure to meet corporate fiduciary standards. Operational risk also exists in the event of business disruption, system failures, or failed transaction processing. Third parties with which we do business could also be a source of operational risk, including with respect to breakdowns or failures of the systems or misconduct by the employees of such parties. In addition, as we change processes or introduce new products and services, we may not fully appreciate or identify new operational risks that may arise from such changes. Increasing use of automated technology has the potential to amplify risks from manual or system processing errors, including outsourced operations.

Our business contingency plan in place is intended to ensure we have the ability to recover our critical business functions and supporting assets, including staff and technology, in the event of a business interruption. Despite the diligence we have applied to the development and testing of our plans, due to unforeseen factors, our ability to conduct business may, in any case, be adversely affected by a disruption involving physical site access, catastrophic events, including weather-related events, events involving electrical, environmental, or communications malfunctions, as well as events impacting services provided by others that we rely upon which could impact our associates or third parties with whom we conduct business.

A continued interruption to our telecommunications or data processing systems, or the failure to effectively update the technology we utilize, could be materially adverse to our business. Our businesses rely extensively on data processing and communications systems. In addition to better serving clients, the effective use of technology increases efficiency and enables us to reduce costs. Adapting or developing our technology systems to meet new regulatory requirements, client needs, and competitive demands is critical for our business. Introduction of new technology presents challenges on a regular basis. There are significant technical and financial costs and risks in the development of new or enhanced applications, including the risk that we might be unable to effectively use new technologies or adapt our applications to emerging industry standards.

Our continued success depends, in part, upon our ability to: (i) successfully maintain and upgrade the capability of our technology systems on a regular basis; (ii) maintain the quality of the information contained in our data processing and communications systems; (iii) address the needs of our clients by using technology to provide products and services that satisfy their demands; and (iv) retain skilled information technology associates. Failure of our technology systems to operate appropriately, which could result from events beyond our control, including a systems malfunction or cyber attack, failure by a third-party service provider, or an inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients for non-compliant data processing, and other violations of privacy and other laws and regulations, as well as regulatory sanctions.

Any cyber attack or other security breach of our technology systems, or those of our clients or other third-party vendors we rely on, could subject us to significant liability and harm our reputation. Our operations rely heavily on the secure processing, storage, and transmission of sensitive and confidential financial, personal, and other information in our computer systems and networks. There have been several highly publicized cases involving financial services companies reporting the unauthorized disclosure of client or other confidential information in recent years, as well as cyber attacks involving the theft, dissemination, and destruction of corporate information or other assets, in some cases as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties. There have also been several highly publicized cases where hackers have requested “ransom” payments in exchange for not disclosing customer information or for restoring access to information or systems. Like other financial services firms, we experience malicious cyber activity directed at our computer systems, software, networks, and its users on a daily basis. This malicious activity includes attempts at unauthorized access, implantation of computer viruses or malware, and denial-of-service attacks. We also experience large volumes of phishing and other forms of social engineering attempted for the purpose of perpetrating fraud against our company, our associates, our advisors, or our clients. Additionally, like many large enterprises, we have shifted to a more hybrid work environment which includes a combination of in-office and remote work for our associates. The increase in remote work over the past few years has introduced potential new vulnerabilities to cyber threats. We may also face increased cybersecurity risk for a period of time after acquisitions as we transition the acquired entity’s historical systems and networks to our standards. We also face increased cybersecurity risk as we deploy additional mobile and cloud technologies. We seek to continuously monitor for and nimbly react to any and all such malicious cyber activity, and we develop our systems to protect the confidentiality, integrity, and availability of our data and technology infrastructure and data from misuse, misappropriation, or corruption. Senior management of our Information Security Office gives a quarterly update on cybersecurity to the Risk Management Committee of our Board of Directors and an update to our full Board of Directors twice annually.

17


 

Cyber attacks can originate from a variety of sources, including threat actors affiliated with foreign governments, organized crime, or terrorist organizations. Threat actors may also attempt to place individuals within our company or induce associates, clients, or other users of our systems to disclose sensitive information or provide access to our data, and these types of risks may be difficult to detect or prevent. Although cybersecurity incidents among financial services firms are on the rise, we have not experienced any material losses relating to cyber attacks or other information security breaches. However, the techniques used in these attacks are increasingly sophisticated, change frequently and are often not recognized until launched. Although we seek to maintain a robust suite of authentication and layered information security controls, including our cyber threat analytics, data encryption, and monitoring technologies, anti-malware defenses, and vulnerability management programs, any one or combination of these controls could fail to detect, mitigate, or remediate these risks in a timely manner. Despite our implementation of protective measures and endeavoring to modify them as circumstances warrant, our computer systems, software, and networks may be vulnerable to human error, equipment failure, natural disasters, power loss, unauthorized access, supply chain attacks, distributed denial of service attacks, zero-day vulnerabilities, computer viruses and other malicious code, and other events that could result in significant liability and damage to our reputation, and have an ongoing impact on the security and stability of our operations. In addition, although we maintain insurance coverage that may, subject to terms and conditions, cover certain aspects of cyber and information security risks, such insurance coverage may be insufficient to cover all losses, such as litigation costs or financial losses that exceed our policy limits or are not covered under any of our current insurance policies.

We also rely on numerous third-party service providers to conduct other aspects of our business operations, and we face similar risks relating to them. While we regularly conduct security assessments and external scans on these third-party vendors, we cannot be certain that their information security protocols are sufficient to withstand a cyber attack or other security breach. We also cannot be certain that we will receive timely notification of such cyber attacks or other security breaches. In addition, in order to access our products and services, our customers may use computers and other devices that are beyond our security control systems.

Notwithstanding the precautions we take, if a cyber attack or other information security breach were to occur, this could jeopardize the information we confidentially maintain, or otherwise cause interruptions in our operations or those of our clients and counterparties, exposing us to liability. As attempted attacks continue to evolve in scope and sophistication, we may be required to expend substantial additional resources to modify or enhance our protective measures, to investigate and remediate vulnerabilities or other exposures or to communicate about cyber attacks to our customers. A technological breakdown could also interfere with our ability to comply with financial reporting and other regulatory requirements, exposing us to potential disciplinary action by regulators. Further, successful cyber attacks at other large financial institutions or other market participants, whether or not we are affected, could lead to a general loss of confidence in financial institutions that could negatively affect us, including harming the market perception of the effectiveness of our security measures or the financial system in general, which could result in reduced use of our financial products and services.

Further, in light of the high volume of transactions we process, use of remote work, the large number of our clients, partners, and counterparties, and the increasing sophistication of malicious actors, a cyber attack could occur. Moreover, any such cyber attack may persist for an extended period of time without detection. We endeavor to design and implement policies and procedures to identify such cyber attacks as quickly as possible; however, we expect that any investigation of a cyber attack would take substantial amounts of time, and that there may be extensive delays before we obtain full and reliable information. During such time, we would not necessarily know the extent of the harm or how best to remediate it, and certain errors or actions could be repeated or compounded before they are discovered and remediated, all of which would further increase the costs and consequences of such an attack.

The SEC recently enacted rules requiring public companies to disclose material cybersecurity incidents that they experience on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance. These new reporting requirements are effective for us as of December 18, 2023. If we fail to comply with these new requirements we could incur regulatory fines in addition to other adverse consequences to our reputation, business, financial condition, and/or results of operations.

We may also be subject to liability under various data protection laws. In providing services to clients, we manage, utilize, and store sensitive or confidential client or associate data, including personal data. As a result, we are subject to numerous laws and regulations designed to protect this information, such as U.S. federal, state, and international laws governing the protection of personally identifiable information. These laws and regulations are increasing in complexity and number. If any person, including any of our associates, negligently disregards or intentionally breaches our established controls with respect to client or associate data, or otherwise mismanages or misappropriates such data, we could be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution. In addition, unauthorized disclosure of sensitive or confidential client or associate data, whether through system failure, associate negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and related revenue. Potential liability in the event of a security breach of client data could be significant. Depending on the circumstances giving rise to the breach, this liability may not be subject to a contractual limit or an exclusion of consequential or indirect damages.

The preparation of the consolidated financial statements requires the use of estimates that may vary from actual results, and new accounting standards could adversely affect future reported results. The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial

18


 

statements, and the reported amounts of revenues and expenses for the reporting period. Such estimates and assumptions may require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. One of our most critical estimates is our allowance for credit losses. At any given point in time, conditions in real estate and credit markets may increase the complexity and uncertainty involved in estimating the losses inherent in our loan portfolio. The recorded amount of liabilities related to legal and regulatory matters is also subject to significant management judgement. For either of these estimates, if management’s underlying assumptions and judgments prove to be inaccurate, our loss provisions could be insufficient to cover actual losses and our financial condition, including our liquidity and capital, and results of operations could be materially and adversely impacted.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. The Financial Accounting Standards Board (the “FASB”) and the SEC have at times revised the financial accounting and reporting standards that govern the preparation of our financial statements. In addition, accounting standard setters and those who interpret the accounting standards may change or even reverse their previous interpretations or positions on how these standards should be applied. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements.

For further discussion of our significant accounting estimates, policies, and standards, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” of this Form 10-K and Note 2 of the Notes to Consolidated Financial Statements of this Form 10-K.

Our risk management and conflicts of interest policies and procedures may leave us exposed to unidentified or unanticipated risk. We seek to manage, monitor, and control our market, credit, operational, liquidity, and legal and regulatory compliance risk, through operational and compliance reporting systems, internal controls, management review processes, and other mechanisms; however, there can be no assurance that our procedures will be effective. While we use limits and other risk mitigation techniques, those techniques and the judgments that accompany their application cannot always anticipate unforeseen economic and financial outcomes or the specifics and timing of such outcomes. Our risk management methods may not predict future risk exposures effectively. In addition, some of our risk management methods are based on an evaluation of information regarding markets, clients and other matters that are based on assumptions that may no longer be accurate or may have limited predictive value. A failure to manage our growth adequately, including growth in the products or services we offer, or to manage our risk effectively, could materially and adversely affect our business and financial condition.

Financial services firms are subject to numerous actual or perceived conflicts of interest, which are routinely examined by regulators and SROs such as FINRA, and are often used as the basis for claims for legal liability by plaintiffs in actions against the Company. Our risk management processes include addressing potential conflicts of interest that arise in our business. Management of potential conflicts of interest has become increasingly complex as we expand our business activities. A perceived or actual failure to address conflicts of interest adequately could affect our reputation, the willingness of clients to transact business with us or give rise to litigation or regulatory actions. Therefore, there can be no assurance that conflicts of interest will not arise in the future that could result in material harm to our business and financial condition.

Associate misconduct, which is difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and subject us to significant legal liability and reputational harm. There is a risk that our associates could engage in misconduct that adversely affects our business. For example, our investment banking business often requires that we deal with confidential matters of great significance to our clients. Our associates interact with clients, customers, and counterparties on an ongoing basis. All associates are expected to exhibit the behaviors and ethics that are reflected in our framework of principles, policies, and technology to protect both our own information as well as that of our clients. If our associates improperly use or disclose confidential information provided by our clients, we could be subject to future regulatory sanctions and suffer serious harm to our reputation, financial position, current client relationships, and ability to attract future clients. We are also subject to a number of obligations and standards arising from our asset management business and our authority over our assets under management. In addition, our financial advisors are required to act in the best interests of our clients and may act in a fiduciary capacity, providing financial planning, investment advice, and discretionary asset management. The violation of these obligations and standards by any of our associates would adversely affect our clients and us. Associate conduct on non-business matters, such as social issues, including the posting of information on social media or other internet forums, could be inconsistent with our policies and ethics and result in reputational harm to our business due to their employment by us or affiliation with us. It is not always possible to deter or prevent every instance of associate misconduct, and the precautions we take to detect and prevent this activity may not be effective in all cases. If our associates engage in misconduct, our business would be adversely affected.

Business growth, including through acquisitions, could increase costs and regulatory and integration risks. We continue to grow, including through acquisitions and through our recruiting efforts. Integrating acquired businesses, providing a platform for new businesses and partnering with other firms involve risks and present financial, managerial, and operational challenges. While cultural fit is a requirement for both our recruiting and acquisition efforts, there can be no assurance that recruited talent and/or acquisition targets will ultimately assimilate into our company in a manner which results in the expected financial benefits. We may incur significant expense, including in the areas of technology and cybersecurity, in connection with expanding our existing businesses, recruiting financial advisors, or when acquiring and integrating businesses. Our overall profitability would be negatively affected if investments

19


 

and expenses associated with such growth are not matched or exceeded by the earnings derived from such investments or growth. Assumptions which underlie the basis of our acquisition decisions, such as the retention of key personnel, future revenue growth of an acquired business, cost efficiencies to be realized, or the value created through the application of specialized expertise we plan to bring to the acquired business, may not be fully realized post-acquisition, resulting in an adverse impact on the value of our investment and potential dilution of the value of our shares.

We may be unable to integrate an acquired business into our existing business successfully, or such integration may be materially delayed or become more costly or difficult than expected. Further, either company’s clients, suppliers, employees, or other business partners may react negatively to the transaction. Such developments could have an adverse effect on our business, financial condition, and results of operations.

Domestic and international business growth, including through acquisitions, may expose us to additional regulatory oversight, create a need for additional compliance, risk management, and internal control procedures, and require us to hire additional personnel to address these procedures. To the extent such procedures are not adequate or not adhered to with respect to our expanded business or any new business, we could be exposed to a material loss or regulatory sanction. 

Moreover, to the extent we pursue acquisitions, or enter into acquisition commitments, a number of factors may prevent us from completing such acquisitions on acceptable terms. For example, regulators such as the Fed could fail to approve a proposed transaction or such approvals could result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction. The shareholders of a publicly traded target company could fail to approve the transaction. Closing conditions in the transaction agreement could fail to be satisfied, or there could be an unexpected delay in closing. Other developments that may affect future results of an acquired company may occur, including changes in asset quality and credit risk, changes in interest rates and capital markets, inflation, and/or changes in customer borrowing, repayment, investment, and deposit practices. Finally, an event, change, or other circumstance could occur that gives rise to the termination of the transaction agreement.

In addition, we may need to raise capital or borrow funds in order to finance an acquisition, which could result in dilution or increased leverage. We may not be able to obtain such financing on favorable terms or perhaps at all. Further, we may issue our shares as a component of some or all of the purchase consideration for an acquisition, which may result in dilution.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if such lawsuits are without merit, defending against these claims could result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition.

We are subject to risks relating to environmental, social, and governance (“ESG”) matters that could adversely affect our reputation, business, financial condition, and results of operations. We are subject to a variety of risks, including reputational risk, associated with ESG matters. The public holds diverse and often conflicting views on ESG topics. As a large financial institution, we have multiple stakeholders, including our shareholders, clients, associates, federal and state regulatory authorities, and the communities in which we operate, and these stakeholders will often have differing priorities and expectations regarding ESG issues. For example, individual U.S. states are increasingly developing differing, and sometimes conflicting, rules related to ESG matters, such as the recently enacted Climate Corporate Data Accountability Act in California. If we take action in conflict with one or another of those stakeholders’ expectations, we could experience an increase in client complaints, a loss of business, or reputational harm. We could also face negative publicity or reputational harm based on the identity of those with whom we choose to do business. Any adverse publicity in connection with ESG issues could damage our reputation, our ability to attract and retain clients and associates, compete effectively, and grow our business.

In addition, proxy advisory firms and certain institutional investors who manage investments in public companies are increasingly integrating ESG factors into their investment analysis. The consideration of environmental and social matters in making investment and voting decisions is relatively new. Accordingly, the frameworks and methods for assessing ESG policies are not fully developed, vary considerably among the investment community, and will likely continue to evolve over time. Moreover, the subjective nature of methods used by various stakeholders to assess a company with respect to ESG criteria could result in erroneous perceptions or a misrepresentation of our actual ESG policies and practices. Organizations that provide ratings information to investors on ESG matters may also assign unfavorable ratings to our company. Public companies are facing increased pressure from stakeholders to consider ESG issues in corporate actions, such as the election of directors and approval of executive compensation. Certain of our clients might also require that we implement additional ESG procedures or standards in order to continue to do business with them. If we fail to comply with specific ESG-related investor or client expectations and standards, or to provide the disclosure relating to ESG issues that any third parties may believe is necessary or appropriate (regardless of whether there is a legal requirement to do so), our reputation, business, financial condition, and/or results of operations, as well as the price of our common and preferred stock could be negatively impacted.

LEGAL AND REGULATORY RISKS

Financial services firms are highly regulated and are currently subject to a number of new and proposed regulations, all of which may increase our risk of financial liability and reputational harm resulting from adverse regulatory actions. Financial services firms

20


 

operate in an evolving regulatory environment and are subject to extensive supervision and regulation. The laws and regulations governing financial services firms are intended primarily for the protection of our depositors, our clients, the financial system, and the FDIC insurance fund, not our shareholders or creditors. The financial services industry has experienced an extended period of significant change in laws and regulations, as well as a high degree of scrutiny from various regulators, including the SEC, the Fed, the FDIC, the OCC, and the CFPB, in addition to stock exchanges, FINRA, and governmental authorities, such as state attorneys general. The SEC has recently been very active in proposing and adopting major new rules and regulations that affect public companies and, in particular, the financial services industry. Several of these new rules have been adopted after significantly abbreviated periods for public comments, and these new or proposed rules involve sweeping changes that could require significant shifts in industry operations and practices, thereby increasing uncertainty for markets and investors. Penalties and fines imposed by regulatory and other governmental authorities have also been substantial and growing in recent years. Additionally, an increasing number of U.S. states have proposed, or are considering, their own laws and regulations, and as a result, our activities could be subject to overlapping and conflicting regulation. We may be adversely affected by the adoption of new rules and by changes in the interpretation or enforcement of existing laws, rules, and regulations. Existing and new laws and regulations could negatively affect our revenue, limit our ability to pursue business opportunities, impact the value of our assets, require us to alter our business practices, impose additional compliance costs, and otherwise adversely affect our businesses.

Additionally, our international business operations are subject to laws, regulations, and standards in the countries in which we operate. In many cases, our activities have been and may continue to be subject to overlapping and divergent regulation in different jurisdictions. As our international operations continue to grow, we may need to comply with additional laws, rules, and regulations which could require us to alter our business practices and/or result in additional compliance costs. Any violations of these laws, regulations, or standards could subject us to a range of potential regulatory events or outcomes that could have a material adverse effect on our business, financial condition, and prospects, including potential adverse impacts on continued operations in the relevant international jurisdiction.

We are also required to comply with the Volcker Rule’s provisions. Although we have not historically engaged in significant levels of proprietary trading, due to our underwriting and market-making activities and our investments in covered funds, we continue to incur costs to ensure compliance with the Volcker Rule. Any changes to regulations or changes to the supervisory approach may also result in increased compliance costs to the extent we are required to modify our existing compliance policies, procedures and practices.

Broker-dealers and investment advisers are subject to regulations covering all aspects of the securities business, including, but not limited to: sales and trading methods; trade practices among broker-dealers; use and safekeeping of clients’ funds and securities; capital structure of securities firms; anti-money laundering efforts; recordkeeping; and the conduct of directors, officers and employees. Any violation of these laws or regulations could subject us to the following events, any of which could have a material adverse effect on our business, financial condition, reputation, and prospects: civil and criminal liability for us or our associates; sanctions, which could include the revocation of our subsidiaries’ registrations as investment advisers or broker-dealers; the revocation of the licenses of our financial advisors; censures; fines; conditions or limitations on our business activities, including higher capital requirements; or a temporary suspension or permanent bar from conducting business. As a recent example of this risk, the Company has been contacted by each of the SEC and the CFTC in connection with an investigation of the Company’s compliance with records preservation requirements for off-channel communications relating to the broker-dealer or investment adviser business activities of the Company using personally owned communications devices and/or messaging platforms that have not been approved by the Company. The SEC has announced their imposition of significant fines on a number of financial services companies in connection with similar investigations, and has reportedly conducted similar investigations of record preservation practices at other financial institutions. See Note 18 of the Notes to Consolidated Financial Statements of this Form 10-K for additional information.

The Federal Reserve requires a bank holding company to act as a source of financial and managerial strength for its subsidiary banks. The Federal Reserve could require the Company to commit resources to its bank subsidiaries when doing so is not otherwise in the best interests of our company or its shareholders or creditors.

Regulatory actions brought against us may result in judgments, settlements, fines, penalties, or other results, any of which could have a material adverse effect on our business, financial condition, reputation, or results of operations. There is no assurance that regulators will be satisfied with the policies and procedures implemented by our company and its subsidiaries. In addition, from time to time, the Company and its subsidiaries may become subject to additional findings with respect to supervisory, compliance, or other regulatory deficiencies, which could subject us to additional liability, including penalties, and restrictions on our business activities. Among other things, these restrictions could limit our ability to make investments, complete acquisitions, expand into new business lines, pay dividends on our common and preferred stock, and/or engage in share repurchases. See “Item 1, Business – Regulation,” of this Form 10-K for additional information regarding our regulatory environment.

We are exposed to litigation and regulatory investigations and proceedings, which could materially and adversely impact our business operations and prospects. The financial services industry faces significant litigation and regulatory risks. Additionally, our litigation and regulatory risks continue to increase as our business expands internationally. Many aspects of our business involve substantial risk of liability. We have been named as a defendant or co-defendant in lawsuits and arbitrations primarily involving claims for damages. The risks associated with potential litigation often may be difficult to assess or quantify, and the existence and magnitude of potential claims often remain unknown for substantial periods of time.

21


 

In our role as underwriter and selling agent, we may be liable if there are material misstatements or omissions of material information in prospectuses and other communications regarding underwritten offerings of securities. At any point in time, the aggregate amount of existing claims against us could be material. While we do not expect the outcome of any existing claims against us to have a material adverse impact on our business, financial condition, or results of operations, we cannot assure you that these types of proceedings will not materially and adversely affect our company. We do not carry insurance that would cover payments regarding these liabilities, except for insurance against certain fraudulent acts of our associates. Acts of fraud are difficult to detect and deter, and while we believe our supervisory procedures are reasonably designed to detect and prevent violations of applicable laws, rules, and regulations, we cannot assure investors that our risk management procedures and controls will prevent losses from fraudulent activity. In addition, our bylaws provide for the indemnification of our officers, directors, and associates to the maximum extent permitted under Delaware law. In the future, we may be the subject of indemnification assertions under these documents by our officers, directors, or associates who have or may become defendants in litigation. These claims for indemnification may subject us to substantial risks of potential liability.

In challenging market conditions, the volume of claims and amount of damages sought in litigation and regulatory proceedings against financial institutions have historically increased. Litigation risks include potential liability under securities laws or other laws for alleged materially false or misleading statements made in connection with securities offerings and other transactions, issues related to our investment recommendations, including the suitability of such recommendations or potential concentration of investments, the inability to sell or redeem securities in a timely manner during adverse market conditions, contractual issues, employment claims, and potential liability for other advice we provide to participants in strategic transactions. Substantial legal liability could have a material adverse financial impact or cause us significant reputational harm, which, in turn, could seriously harm our business and future business prospects.

In addition to the foregoing financial costs and risks associated with potential liability, the costs of defending individual litigation and claims and/or regulatory matters continue to increase over time. The amount of attorneys’ fees incurred in connection with the defense of litigation and claims and/or regulatory matters could be substantial and might materially and adversely affect our results of operations. See “Item 3 – Legal Proceedings,” and Note 18 of the Notes to Consolidated Financial Statements of this Form 10-K for further information about legal matters.

The Basel III regulatory capital standards impose capital and other requirements on us that could negatively impact our profitability. The Fed and other federal banking regulators have implemented the global regulatory capital requirements of Basel III and certain requirements implemented by the Dodd-Frank Act. The U.S. Basel III Rules establish the quantity and quality of regulatory capital, set forth a capital conservation buffer, and define the calculation of risk-weighted assets. The capital requirements stipulated under the U.S. Basel III Rules could restrict our ability to grow during favorable market conditions or require us to raise additional capital. Revisions to the Basel III Rules could, when implemented in the U.S., negatively impact our regulatory capital ratio calculations or subject us to higher and more stringent capital and other regulatory requirements. As a result, our business, results of operations, financial condition, and prospects could be adversely affected. See “Item 1 – Business – Regulation” of this Form 10-K for further information on the Basel III regulatory capital standards.

Failure to comply with regulatory capital requirements primarily applicable to our company, our bank subsidiaries, or our broker-dealer subsidiaries would significantly harm our business. As discussed in “Item 1 – Business – Regulation” of this Form 10-K, our company and it bank subsidiaries are subject to capital requirements administered by various federal regulators in the U.S. and, accordingly, must meet specific capital guidelines that involve quantitative measures of our company’s and our bank subsidiaries’ assets, liabilities, and certain off-balance sheet items as calculated under regulatory guidelines. Failure to meet minimum capital requirements can trigger certain mandatory (and potentially discretionary) actions by regulators that, if undertaken, could harm either our company or our bank subsidiaries’ operations and financial condition, including precluding us from accepting or renewing brokered deposits. Further, we are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1) and FINRA’s net capital rule, which may limit our ability to make withdrawals of capital from our broker-dealer subsidiaries. Our non-U.S. subsidiaries are subject to similar limitations under applicable regulations in the countries in which they operate. Regulatory capital requirements applicable to some of our significant subsidiaries may impede access to funds that we may need to make payments on any of our obligations. See Note 19 of the Notes to Consolidated Financial Statements of this Form 10-K for further information on regulatory capital requirements.

Changes in requirements relating to the standard of care for broker-dealers have increased, and may continue to increase, our costs. The SEC’s Regulation Best Interest requires, among other things, a broker-dealer to act in the best interest of a retail client when making a recommendation to that client of any securities transaction or investment strategy involving securities. The regulation imposes heightened standards on broker-dealers, and we have incurred substantial costs in order to review and modify our policies and procedures, including associated supervisory and compliance controls. We anticipate that we will continue to incur incremental costs in the future to comply with the standard.

In addition to the SEC, various states have adopted, or are considering adopting, laws and regulations seeking to impose new standards of conduct on broker-dealers that, as written, differ from the SEC’s regulations and may lead to additional implementation costs. Implementation of the SEC regulations, as well as any new state rules that are adopted addressing similar matters, has resulted in (and may continue to result in) increased costs related to compliance, legal, operations, and information technology. Furthermore, certain

22


 

non-U.S. jurisdictions have imposed heightened standards of conduct, which may have similar impacts on our business in those jurisdictions.

The DOL has indicated that it plans to amend the definition of “fiduciary” in connection with investment advice regarding employee benefit plans and IRAs. Imposing a new fiduciary standard could result in increased costs and other impacts to our business.

Numerous regulatory changes and enhanced regulatory and enforcement activity relating to our asset management activities may increase our compliance and legal costs and otherwise adversely affect our business. As some of our wholly owned subsidiaries are registered as investment advisers with the SEC, increased regulatory scrutiny and rulemaking initiatives may result in additional operational and compliance costs or the assessment of significant fines or penalties against our asset management business, and may otherwise limit our ability to engage in certain activities. While it is not possible to determine the extent of the long-term impact of any new laws or regulations that have been promulgated, or initiatives that have been or may be proposed, even the short-term impact of preparing for or implementing changes to our infrastructure and processes could negatively affect the ways we conduct business and increase our compliance and legal costs. Conformance with any new law or regulations could also make compliance more difficult and expensive and affect our product and service offerings. New regulations regarding the management of hedge funds and the use of certain investment products, including additional recordkeeping and disclosure requirements, may also impact our asset management business and result in increased costs. In addition, U.S. and foreign governments have taken regulatory actions impacting the investment management industry, and may continue to do so, including expanding current (or enacting new) standards, requirements, and rules that may be applicable to us and our subsidiaries. For example, several states and municipalities in the U.S. have adopted “pay-to-play” rules, which could limit our ability to charge advisory fees. Such “pay-to-play” rules could affect the profitability of that portion of our business.

As a financial holding company, our company’s liquidity depends on payments from its subsidiaries, which may be subject to regulatory restrictions. The Company, as a financial holding company, depends on dividends, distributions, and other payments from its subsidiaries in order to meet its obligations, including its debt service obligations and to fund dividend payments and share repurchases. Our subsidiaries are subject to laws and regulations that restrict dividend payments or authorize regulatory bodies to prevent or reduce the flow of funds from those subsidiaries to our company. If our subsidiaries are unable to make dividend payments to us and sufficient cash or liquidity is otherwise not available, the Company may not be able to make dividend payments to its shareholders, repurchase its shares, or make principal and interest payments on its outstanding debt. Our broker-dealers and bank subsidiaries are limited in their ability to lend or transact with affiliates, are subject to minimum regulatory capital and other requirements, and, in the case of our broker-dealer subsidiaries, have limitations on their ability to use funds deposited with them in brokerage accounts to fund their businesses. These requirements and limitations may hinder our company’s ability to access funds from its subsidiaries. Federal regulators, including the Federal Reserve and the SEC (through FINRA), have the authority and, under certain circumstances, the obligation to limit or prohibit dividend payments and stock repurchases by the banking organizations they supervise, including our company and its bank subsidiaries.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

We maintain an information security program and governance framework that are designed to protect our information systems against operational risks related to cybersecurity.

Cybersecurity Risk Management and Strategy

We define information security and cybersecurity risk as the risk that the confidentiality, integrity, or availability of our information and information systems are impacted by unauthorized or unintended access, use, disclosure, disruption, modification, or destruction. Information security and cybersecurity risk is an operational risk that is measured and managed as part of our operational risk framework. Operational risk is incorporated into our comprehensive Enterprise Risk Management (“ERM”) program, which we use to identify, aggregate, monitor, report, and manage risks.

Our Written Information Security Program (“WISP”), which is our enterprise information security and cybersecurity program incorporated in our ERM program and led by our Chief Information Security Officer (“CISO”), is designed to (i) ensure the security, confidentiality, integrity, and availability of our information and information systems; (ii) protect against any anticipated threats or hazards to the security, confidentiality, integrity, or availability of such information and information systems; and (iii) protect against unauthorized access to or use of such information or information systems that could result in substantial harm or inconvenience to us, our associates, or our clients. The WISP program is built upon a foundation of advanced security technology, employs a highly trained team of experts, and is designed to operate in alignment with global regulatory requirements. The program deploys multiple layers of controls, including embedding security into our technology investments, designed to identify, protect, detect, respond to, and recover from information security and cybersecurity incidents. Those controls are measured and monitored by a combination of subject matter experts and a security operations center with integrated cyber detection, response, and recovery capabilities. The WISP program includes our Incident Response program, which manages information security incidents involving compromises of sensitive information, and our

23


 

Security Incident Response Plan, which provides a documented framework for handling high severity security incidents and facilitates coordination across multiple parts of the Company to manage response efforts. We also routinely perform simulations and drills around security matters at both a technical and management level, and our associates receive annual cybersecurity awareness training.

In addition, we incorporate reviews by our Internal Audit department and reviews by external third-party experts as part of our WISP program. Our company also undergoes periodic independent third-party maturity assessments of our cybersecurity measures and controls within our WISP program against the Cyber Risk Institute Profile standards for the financial sector. We also invest in threat intelligence, collaborate with our peers in areas of threat intelligence, vulnerability management, incident response, and drills, and are active participants in industry and government forums.

Cybersecurity risks related to third parties are managed as part of our System and Services Acquisition Policy, which sets forth the procurement, risk management, and contracting framework for managing third-party relationships commensurate with their risk and complexity. Our program sets guidelines for identifying, measuring, monitoring, and reporting the risks associated with third parties through the life cycle of the relationships, which includes planning, due diligence and third-party selection, contracting, ongoing monitoring, and termination. Our program includes the identification of third parties with risks related to information security. Third parties that access, process, collect, share, create, store, transmit, or destroy our information or have access to our systems may have additional security requirements, depending on the levels of risk, such as enhanced risk assessments and monitoring, and additional contractual controls. We also conduct reassessments of our third-party risk, using a risk-based approach to determine frequency. Where appropriate, the Company seeks to incorporate contractual language with third-party service providers that includes clear terms involving the collection, use, sharing, and retention of user data, as well as compliance with appropriate security terms.

While we do not believe that our business strategy, results of operations, or financial condition have been materially adversely affected by any cybersecurity incidents, cybersecurity threats are pervasive, and, similar to other global financial services firms, we, as well as our clients, associates, regulators, service providers, and other third parties, have experienced a significant increase in information security and cybersecurity risk in recent years and will likely continue to be the target of cyber attacks. We continue to assess the risks and changes in the cyber environment, invest in enhancements to our cybersecurity capabilities, and engage in industry and government forums to promote advancements in our cybersecurity capabilities, as well as the broader financial services cybersecurity ecosystem. For more information on risks to us from cybersecurity threats, see “Any cyber attack or other security breach of our technology systems, or those of our clients or other third-party vendors we rely on, could subject us to significant liability and harm our reputation” in “Item 1A – Risk Factors” of this Form 10-K.

 

24


 

Cybersecurity Governance

Under our information security framework, our Board and our Risk Management Committee are primarily responsible for overseeing and governing the development, implementation, and maintenance of our WISP program, with the Board designating our Risk Management Committee to provide oversight and governance of technology and cybersecurity risks. Our Board receives an update on cybersecurity at least twice a year from our CISO or their designee. Our Risk Management Committee receives reports on cybersecurity at least four times a year, with ad hoc updates as needed. In addition, our Risk Management Committee annually approves our WISP program.

Our Operational Risk Committee (“ORC”), chaired by our CISO, provides oversight and governance for our information security risk management activities, including those related to cybersecurity. This includes efforts to identify, measure, manage, monitor, and report information security risks associated with our information and information systems. The ORC escalates risks to the Risk Management Committee or our Board based on the escalation criteria provided in our information security framework. Members of management with cybersecurity oversight responsibilities are informed about cybersecurity risks and incidents through a number of channels, including periodic and annual reports, with the annual report also provided to our Risk Management Committee and the ORC.

Our CISO leads the strategy, engineering, and operations of cybersecurity across the Company and is responsible for providing annual updates to our Board and the ORC on our WISP program, as well as ad hoc updates on information security and cybersecurity matters. Our CISO reports directly to the Risk Management Committee. The CISO has been with the Company since 2016 and prior to this worked in a number of security and technical roles within the Federal Reserve System.

ITEM 2. PROPERTIES

The following table sets forth the location, approximate square footage, and use of each of the principal properties used by our company during the year ended December 31, 2023. We own our executive offices in St. Louis, Missouri. We lease or sublease a majority of these properties under operating leases. Such leases expire at various times through 2036.

Location

 

Approximate Square Footage

 

 

Use

St. Louis, Missouri

 

 

434,000

 

 

Headquarters and administrative offices of Stifel,
   Global Wealth Management operations (including SIA),
   and Institutional Group operations

New York, New York

 

 

282,000

 

 

Global Wealth Management and Institutional Group operations

Baltimore, Maryland

 

 

97,500

 

 

Institutional Group operations and Administrative offices

San Francisco, California

 

 

70,500

 

 

Global Wealth Management and Institutional Group operations

We also maintain operations in 468 leased offices in various locations throughout the United States and in certain foreign countries, primarily for our broker-dealer business. We lease 398 private client offices. Our Institutional Group segment leases 70 offices in the United States and certain foreign locations. We believe that, at the present time, the space available to us in the facilities under our current leases and co-location arrangements are suitable and adequate to meet our needs and that such facilities have sufficient productive capacity and are appropriately utilized.

Leases for the branch offices of our independent contractor firms are the responsibility of the respective independent financial advisors.

See Note 20 of the Notes to Consolidated Financial Statements for further information regarding our lease obligations.

 

25


 

 

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

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

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

SEC and CFTC Investigation of Communications Recordkeeping

The Company has been contacted by each of the SEC and the CFTC in connection with an investigation of the Company’s compliance with records preservation requirements for off-channel communications relating to the broker-dealer or investment adviser business activities of the Company using personally owned communications devices and/or messaging platforms that have not been approved by the Company. The SEC and the CFTC have provided the Company with settlement offers, and the Company has established an accrual for potential losses that are probable and reasonably estimable, but at this time, based upon currently available information and review with outside counsel, the Company is not able to state with certainty that any settlements will be achieved or the ultimate resolution of these matters.

ITEM 4. MINE SAFTEY DISCLOSURES

Not applicable.

26


 

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol “SF.” The closing sale price of our common stock as reported on the New York Stock Exchange on February 1, 2024, was $72.86. As of that date, our common stock was held by approximately 92,500 shareholders. The following table sets forth for the periods indicated the high and low trades for our common stock.

 

 

2023

 

 

2022

 

 

 

High

 

 

Low

 

 

High

 

 

Low

 

First quarter

 

$

68.77

 

 

$

53.48

 

 

$

83.28

 

 

$

60.35

 

Second quarter

 

$

62.35

 

 

$

54.84

 

 

$

70.26

 

 

$

54.74

 

Third quarter

 

$

66.61

 

 

$

58.08

 

 

$

65.39

 

 

$

51.73

 

Fourth quarter

 

$

70.07

 

 

$

54.81

 

 

$

66.96

 

 

$

49.31

 

Cash dividends per share of common stock paid during the year are reflected below. The dividends were declared during the quarter of payment.

 

 

Fiscal Year 2023

 

 

Fiscal Year 2022

 

First quarter

 

$

0.36

 

 

$

0.30

 

Second quarter

 

$

0.36

 

 

$

0.30

 

Third quarter

 

$

0.36

 

 

$

0.30

 

Fourth quarter

 

$

0.36

 

 

$

0.30

 

The payment of dividends on our common stock is subject to several factors, including operating results, financial requirements of our company, and the availability of funds from our subsidiaries. See Note 19 of the Notes to Consolidated Financial Statements for more information on the capital restrictions placed on our broker-dealer subsidiaries and bank subsidiaries.

Securities Authorized for Issuance Under Equity Compensation Plans

Information about securities authorized for issuance under our equity compensation plans is contained in “Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Form 10-K.

Issuer Purchases of Equity Securities

There were no unregistered sales of equity securities during the quarter ended December 31, 2023. The following table sets forth information with respect to purchases made by or on behalf of Stifel Financial Corp. or any “affiliated purchaser” (as defined in Rule 10b-10(a)(3) under the Securities Exchange Act of 1934, as amended), of our common stock during the quarter ended December 31, 2023.

 

 

Total Number of
Shares Purchased

 

 

Average Price Paid
per Share

 

 

Total Number of
Shares
Purchased as
Part of Publically
Announced Plans

 

 

Maximum Number
of Shares That May
Yet be Purchased
Under the Plan or
Program

 

October 1 - 31, 2023

 

 

816,702

 

 

 

58.28

 

 

 

816,702

 

 

 

13,365,258

 

November 1 - 30, 2023

 

 

1,028,445

 

 

 

59.12

 

 

 

1,028,445

 

 

 

12,336,813

 

December 1 - 31, 2023

 

 

500,000

 

 

 

65.48

 

 

 

500,000

 

 

 

11,836,813

 

 

 

 

2,345,147

 

 

 

60.18

 

 

 

2,345,147

 

 

 

 

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, 2023, the maximum number of shares that may yet be purchased under this plan was 11.8 million.

 

27


 

Stock Performance Graph

Five-Year Shareholder Return Comparison

The graph below compares the cumulative stockholder return on our common stock with the cumulative total return of a Peer Group Index, the Standard & Poor’s 500 Index (“S&P 500”), and the NYSE ARCA Securities Broker Dealer Index for the five-year period ended December 31, 2023. The NYSE ARCA Securities Broker Dealer Index consists of eighteen firms in the brokerage sector. The Broker-Dealer Index includes our company. The stock price information shown on the graph below is not necessarily indicative of future price performance.

The material in this report is not deemed “filed” with the SEC and is not to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filings.

The following table and graph assume that $100.00 was invested on December 31, 2018, in our common stock, the Peer Group Index, the S&P 500 Index, and the NYSE ARCA Securities Broker Dealer Index, with reinvestment of dividends.

 

 

2019

 

 

2020

 

 

2021

 

 

2022

 

 

2023

 

Stifel Financial Corp.

 

$

148

 

 

$

187

 

 

$

264

 

 

$

225

 

 

$

270

 

Peer Group

 

$

121

 

 

$

134

 

 

$

190

 

 

$

162

 

 

$

179

 

S&P 500 Index

 

$

131

 

 

$

156

 

 

$

200

 

 

$

164

 

 

$

207

 

NYSE ARCA Securities Broker-Dealer Index

 

$

122

 

 

$

159

 

 

$

205

 

 

$

189

 

 

$

235

 

 

img90490872_0.jpg 

*Compound Annual Growth Rate

 

28


 

The Peer Group Index consists of the following companies that serve the same markets as us and which compete with us in one or more markets:

Affiliated Managers Group Inc.

 

Houlihan Lokey, Inc.

 

Moelis & Company

Ameriprise Financial, Inc.

 

Invesco Ltd.

 

Northern Trust Corp.

Cowen Inc. (1)

 

Jefferies Financial Group Inc.

 

Piper Sandler Companies

Evercore Inc.

 

Lazard Ltd.

 

Raymond James Financial, Inc.

Franklin Resources, Inc.

 

LPL Financial Holdings Inc.

 

T. Rowe Price Group, Inc.

(1) Cowen Inc. was acquired by TD Bank Group on March 1, 2023.

ITEM 6. Reserved

 

29


 

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, 2023.

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, with a growing presence in the United Kingdom, Europe, and Canada. 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 March 1, 2023, the Company acquired Torreya Partners LLC, a leading independent M&A and private capital advisory firm serving the global life sciences industry.

On August 1, 2023, the Company acquired Sierra Pacific Securities, LLC, an algorithmic trading-focused, fixed income market-making firm.

Results for the Year Ended December 31, 2023

For the year ended December 31, 2023, net revenues decreased 1.0% to $4.3 billion compared to $4.4 billion during the comparable period in 2022. Net income available to common shareholders for the year ended December 31, 2023, decreased 22.3% to $485.3 million, or $4.28 per diluted common share, compared to $624.9 million, or $5.32 per diluted common share, in 2022. For the year ended December 31, 2023, our Global Wealth Management segment posted record net revenues and pre-tax income.

Our revenue decline for the year ended December 31, 2023, was primarily attributable to lower advisory and transactional revenues, partially offset by higher net interest income, asset management, and capital-raising revenues.

We remain well-positioned entering fiscal 2024, with nearly $445 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 don’t believe that 2024 will be a “normalized” operating environment, as there remains uncertainty regarding the number of rate cuts that the Federal Reserve will make, the timing of the pickup in investment banking revenue, the presidential election, and how the equity markets will react to these changes. As a result, we may continue to experience volatility in transactional and investment banking revenues, which may negatively impact revenues in future periods. In our Global Wealth segment, we anticipate further net interest income growth despite the slower growth rate of our balance sheet. Our strong recruiting efforts will lead to further net new asset growth in our private client business. Our Institutional business is more cyclical but remains well positioned to benefit from any pickup in capital-raising activity, and we will continue to focus on increasing our relevance to our customers.

30


 

Economic and Market Conditions

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.

The benefits of our diversified business model enabled us to successfully navigate market conditions that included increased geopolitical risks, tightening of financial conditions primarily due to significant increases in short-term rates, and quantitative tightening by the Federal Reserve, both implemented to corral inflation, and the failure of three major U.S. banks.

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.

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.

Impact of Interest Rates

During 2023, the Federal Reserve remained committed to tightening monetary policy as a means of combating inflation. While modest decreases in key inflationary measures such as the Consumer Price Index demonstrated that the rate increases implemented throughout 2022 were beginning to have their intended impact, unexpectedly strong job growth and consumer spending data led the Federal Reserve to conclude that further short-term rate increases were necessary. As a result, the Federal Reserve increased the Federal funds rate by 100 basis points to a target range of 5.25% to 5.50% during 2023. The 2023 rate increases balanced the Federal Reserve’s intention not to “over-tighten,” while also acknowledging that a contraction in bank lending in light of the Silicon Valley Bank and Signature Bank failures would likely help ease inflation. At its January 2024 Federal Open Market Committee meeting, the Federal Reserve unanimously voted not to raise interest rates. The Federal Reserve has forecasted that it will make three quarter-point cuts to the Federal funds rate during 2024.

The increases in rates, which are intended to reduce inflation, are also likely to reduce economic activity, possibly leading to a recession in the coming months. These factors have already reduced customer confidence and are likely to continue to reduce discretionary spending, increase volatility in financial markets, and reduce revenues the Company derives from commissions and possibly from fees based on the value of client assets managed by the Company should equity prices decline. The increases in the Federal funds rate are favorable to the Company's interest-based revenue. However, increases in interest rates have increased fees the Company earns from FDIC-insured deposits of clients through a program offered by the Company, though such increases may be offset to some extent if the cash sweep balances decrease as clients seek higher-yielding investments. These rate increases have also increased the rates the Company charges on margin balances, which has positively impacted earnings. The stability and expected reduction in the Federal funds rate should positively impact our fixed income transactional business.

 

31


 

RESULTS OF OPERATIONS

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

 

 

For the Year Ended December 31,

 

 

Percentage
Change

 

 

As a Percentage of
Net Revenues
for the Year Ended
December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

2023 vs. 2022

 

 

2022 vs. 2021

 

 

2023

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions

 

$

673,597

 

 

$

710,589

 

 

$

809,500

 

 

 

(5.2

)%

 

 

(12.2

)%

 

 

15.5

%

 

 

16.2

%

 

 

17.1

%

Principal transactions

 

 

490,440

 

 

 

529,033

 

 

 

581,164

 

 

 

(7.3

)

 

 

(9.0

)

 

 

11.3

 

 

 

12.0

 

 

 

12.3

 

Investment banking

 

 

731,255

 

 

 

971,485

 

 

 

1,565,381

 

 

 

(24.7

)

 

 

(37.9

)

 

 

16.8

 

 

 

22.1

 

 

 

33.0

 

Asset management

 

 

1,299,496

 

 

 

1,262,919

 

 

 

1,206,516

 

 

 

2.9

 

 

 

4.7

 

 

 

29.9

 

 

 

28.8

 

 

 

25.5

 

Interest

 

 

1,955,745

 

 

 

1,099,115

 

 

 

548,400

 

 

 

77.9

 

 

 

100.4

 

 

 

45.0

 

 

 

25.0

 

 

 

11.6

 

Other income

 

 

8,747

 

 

 

19,685

 

 

 

72,125

 

 

 

(55.6

)

 

 

(72.7

)

 

 

0.1

 

 

 

0.5

 

 

 

1.5

 

Total revenues

 

 

5,159,280

 

 

 

4,592,826

 

 

 

4,783,086

 

 

 

12.3

 

 

 

(4.0

)

 

 

118.6

 

 

 

104.6

 

 

 

101.0

 

Interest expense

 

 

810,336

 

 

 

201,387

 

 

 

45,998

 

 

 

302.4

 

 

 

337.8

 

 

 

18.6

 

 

 

4.6

 

 

 

1.0

 

Net revenues

 

 

4,348,944

 

 

 

4,391,439

 

 

 

4,737,088

 

 

 

(1.0

)

 

 

(7.3

)

 

 

100.0

 

 

 

100.0

 

 

 

100.0

 

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

2,554,581

 

 

 

2,586,232

 

 

 

2,820,301

 

 

 

(1.2

)

 

 

(8.3

)

 

 

58.7

 

 

 

58.9

 

 

 

59.5

 

Occupancy and equipment rental

 

 

339,322

 

 

 

313,247

 

 

 

290,243

 

 

 

8.3

 

 

 

7.9

 

 

 

7.8

 

 

 

7.1

 

 

 

6.1

 

Communication and office supplies

 

 

184,652

 

 

 

175,135

 

 

 

165,490

 

 

 

5.4

 

 

 

5.8

 

 

 

4.3

 

 

 

4.0

 

 

 

3.5

 

Commissions and floor brokerage

 

 

58,344

 

 

 

57,752

 

 

 

59,681

 

 

 

1.0

 

 

 

(3.2

)

 

 

1.3

 

 

 

1.3

 

 

 

1.3

 

Provision for credit losses

 

 

24,999

 

 

 

33,506

 

 

 

(11,502

)

 

 

(25.4

)

 

 

391.3

 

 

 

0.6

 

 

 

0.8

 

 

 

(0.2

)

Other operating expenses

 

 

480,354

 

 

 

340,451

 

 

 

345,794

 

 

 

41.1

 

 

 

(1.5

)

 

 

11.1

 

 

 

7.7

 

 

 

7.3

 

Total non-interest expenses

 

 

3,642,252

 

 

 

3,506,323

 

 

 

3,670,007

 

 

 

3.9

 

 

 

(4.5

)

 

 

83.8

 

 

 

79.8

 

 

 

77.5

 

Income before income taxes

 

 

706,692

 

 

 

885,116

 

 

 

1,067,081

 

 

 

(20.2

)

 

 

(17.1

)

 

 

16.2