Stifel Financial Annual Report 2008

FY2008 Annual Report · Stifel Financial

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Navigating
the Storm

Annual Report 2008

Company Description

Stifel Financial Corp. is the holding company for Stifel, Nicolaus & Company, Incorporated, a full-service brokerage and investment

banking firm established in 1890 and headquartered in St. Louis, Missouri. The Company provides securities brokerage, investment

banking, trading, investment advisory, and related financial services through its wholly owned subsidiaries, primarily Stifel

Nicolaus, to individual investors, professional money managers, businesses, and municipalities.

Statement of Commitment

To Our Associates — current and future, our commitment is to provide an entrepreneurial environment that encourages unconfined,
long-term thinking. We seek to reward hard-working team players that devote their energy and attention to client needs. At work, at
home, and in their communities, we seek to be their Firm of Choice.

To Our Clients — individual, institutional, corporate, and municipal, our commitment is to listen and consistently deliver innovative
financial solutions. Putting the welfare of clients and community first, we strive to be the Advisor of Choice in the industry. Pursuit of
excellence and a desire to exceed clients’ expectations are the values that empower our Company to achieve this status.

To Our Shareholders — small and large, our commitment is to create value and maximize your return on investment through all market
cycles. By achieving the status of Firm of Choice for our professionals and Advisor of Choice for our clients, we are able to deliver value to
our shareholders as their Investment of Choice.

Investment
of Choice

Advisor
of Choice

Firm
of Choice

Photo of Ronald J. Kruszewski courtesy of Brian Cassidy, St. Louis Business Journal

Financial Highlights

operating results

Total Revenues
Net Income
Earnings Per Diluted Share1
Core Earnings2
Core Earnings Per Diluted Share1,2

financial position

Total Assets
Stockholders’ Equity
Book Value Per Share1

(in thousands, except per share amounts)

2004
$251,189
$23,148
$1.25
$23,148
$1.26

2005

2006

2007

2008

$270,010
$19,644
$1.04
$21,616
$1.15

$471,388
$15,431
$0.74
$39,590
$1.90

$793,090
$32,170
$1.25
$66,788
$2.60

$888,847
$55,502
$1.98
$71,380
$2.54

2004

2005

2006

2007

2008

$382,314
$131,312
$9.02

$842,001
$155,093
$10.21

$1,084,774
$220,265
$12.36

$1,499,440
$424,637
$18.36

$1,558,145
$593,185
$22.68

1 All stock price amounts reflect the four-for-three stock split distribution in September 2004 and three-for-two stock split in June 2008.
2 Core Earnings and Core Earnings Per Diluted Share, non-GAAP measures, represent GAAP net income and GAAP diluted earnings per share adjusted for

acquisition-related charges, principally compensation related to the acquisition of Legg Mason Capital Markets for 2006, 2007, and 2008 and compensation charges
related to the acceleration of vesting for the Ryan Beck deferred compensation plans for 2007. See Reconciliation of GAAP Net Income to Core Earnings on the
inside back cover.

ToTAl RevenueS
(in millions)

889

CoRe eARnIngS2
(in millions)

793

CoRe eARnIngS
PeR DIluTeD
SHARe1,2

2.60

2.54

471

251

270

1.90

1.26

1.15

ToTAl ASSeTS
(in millions)

1,499

1,558

SToCkHolDeRS’
equITy
(in millions)

425

593

Book vAlue
PeR SHARe1

22.68

18.36

1,085

842

382

220

155

131

12.36

10.21

9.02

1
3

equity Capital Markets
equity Capital Markets
Shareholder letter

navigating
the Storm

$870 million, marking our 13th consecutive year of record
net revenue. Core net income was a record $71 million, up
7% from the record established in 2007. We remain very well
capitalized, as evidenced by the following benchmarks achieved
as of December 31, 2008:

• Stockholders’ equity of $593 million, or $22.68 per share.

• Tier-one capital ratio of 49%, which is 12 times the
required level.

• Net capital ratio of 58%, 18 times the required level.

• Our core return on equity, achieved without employing
the excessive leverage of many of our industry brethren,
totaled 15%.

For the year, our stock price increased 31% vs. declines of 37%
for the S&P 500 and 62% for the Securities Broker-Dealer
Index. Over five years, our stock price has achieved a compound
annual growth rate of 35% as compared to compound annual
declines of 2% for the S&P 500 and 10% for the Securities
Broker-Dealer Index.

What explains our Company’s extraordinary performance,
especially in the difficult market environment of 2008? The
answer remains the same as last year. Instead of employing
financial leverage, we simply strive to leverage our infrastructure
and capabilities through the addition of talented, entrepreneurial
people. Since 2000, we have leveraged our capabilities through
the addition of approximately 2,400 associates, bringing the total
to more than 3,500 today. This growth, in turn, has resulted in
a 391% increase in net revenue over this same time frame. In
short, the intellectual capital and energy of our people represents
the franchise value of our Company.

Importantly, the interests of our associates remain aligned with
our shareholders. Our compensation systems are closely aligned
with performance; performance as measured in a fashion that
does not leave Stifel with unwarranted residual risk. Moreover,
our associates own over 45 percent of our stock, on a fully
diluted basis.

The following milestones demonstrate our commitment
to growth through the addition of new associates from the
beginning of 2008 through March 2009.

Ronald J. Kruszewski
Chairman, President, and Chief Executive Officer

Dear Fellow Shareholders, Clients, and Associates:

Navigating the storm. And what a storm 2008 proved to be.
At the beginning of the year, there existed five large independent
investment banks. Today, there are two. Bear Stearns was
absorbed into J.P. Morgan Chase, Lehman Brothers declared
bankruptcy, and Merrill Lynch apparently found it necessary to
sell itself to Bank of America. The two remaining large firms,
Goldman Sachs and Morgan Stanley, while still independent,
converted to bank holding companies. That’s not all. The
government effectively nationalized AIG and placed Fannie Mae
and Freddie Mac into conservatorship. The country’s mortgage-
banking industry is in disarray. Citigroup is deleveraging
and dismantling its universal bank model, underscored by its
announced spin-off of Smith Barney. IndyMac and 24 other
banks were taken over by the FDIC in 2008. Washington Mutual
was acquired by J.P. Morgan Chase, and Wachovia sold itself to
Wells Fargo. The market reflected the carnage, as the S&P 500
ended 2008 42% off its high achieved in October 2007.

Our Company’s 2008 Performance

Amid the 2008 maelstrom, I am pleased to report that Stifel
Financial Corp. navigated the storm in extraordinary fashion.
As way of reference, U.S. securities industry net revenue declined
19%, resulting in a collective pre-tax loss of $34 billion. In
contrast, Stifel Financial’s net revenue increased 14% to a record

2
2

• We opened 62 new offices and added 231 Financial
Advisors to our Company, net of departures. These totals
include the acquisition of Butler Wick, which closed on
December 31, 2008, and added 75 Financial Advisors and
18 branch offices.

• In March 2009, we entered into an agreement to acquire
up to 58 Private Client Group branches from the UBS
Wealth Management Americas branch network, in a deal
that will further extend our geographic presence and
strengthen our brokerage position. Expected to close in the
third quarter of 2009, this transaction could bring Stifel up
to 340 new Financial Advisors in 24 states, and we expect it
to be accretive to our earnings in the first year.

• We expanded the scope and capability of our Public
Finance practice through the addition of 25 professionals
and the opening of 4 new offices in Chicago, Illinois;
Lansing, Michigan; New York, New York; and San
Antonio, Texas. In addition, during the first quarter
of 2009, we opened two new Public Finance offices in
Cleveland and Columbus, Ohio.

• We have added 61 associates to our Equity Capital Markets
Group, including 24 in investment banking, 17 in sales
and trading, and 13 in research.

• We have added 55 associates in Fixed Income Capital
Markets, adding significantly to sales, trading, and Public
Finance, including the addition of 12 highly regarded
professionals to spearhead a new Aircraft Finance and
Credit Solutions practice.

InveSTMenT oF CHoICe

Stifel Financial Corp. (34.5% CAGR*)

Peer Group (-5.3% CAGR*)

S&P 500 Index (-2.2% CAGR*)

Securities Broker-Dealer Index
(-10.2% CAGR*)

$500

$400

$300

$200

$100

* Compound Annual Growth Rate

The above graph assumes $100 invested on an indexed basis, with dividends reinvested, in
Stifel Financial Corp. common stock, a Peer Group Index (consisting of six companies, including
Stifel, that serve the same markets as us and which compete with us in one or more markets), the
S&P 500 Index, and the Securities Broker-Dealer Index (consisting of 12 firms in the brokerage
sector, excluding Stifel) for the period December 31, 2003 to December 31, 2008.

• We have added 87 associates to our client service areas to
support our growth.

Other notable accomplishments in 2008 include:

• We continued our award-winning research efforts, ranking
#1 out of 246 firms in both stock-picking performance and
earnings accuracy. As a result, our institutional cash equity
business increased to $160 million, up 33% from 2007.

• Our Private Client Group posted record net revenue of
$461 million, up 6% from the previous record set in 2007.

• Our Fixed Income Capital Markets business posted record
net revenue of $175 million, up 170% from 2007. Simply
stated, this segment produced outstanding results in 2008.

• Our Public Finance Group acted as sole, senior, or co-
manager on 535 transactions totaling $12 billion.

• Our Equity Capital Markets segment posted revenue
of $216 million, an outstanding result considering the
difficult investment banking environment during the year.

• Stifel Bank grew assets 35% to $361 million, while adding
35 new associates.

ADvISoR oF CHoICe
total revenues
(in millions)

793

889

471

251

270

222

FIRM oF CHoICe
stifel associates

3,371

3,031

2,016

1,824

1,296

1,384

3
3

Shareholder letter

What happened to our financial system?
There are no simple answers to complex problems, especially
problems that have accumulated over time. In last year’s letter, I
quoted Warren Buffett, who stated, “It is easy to put on leverage,
and not so easy to take leverage off.” 2008 proved that adage true.

In my view, the current crisis is the result of speculative investment
fueled by excessive leverage. The leverage was enabled through
aggressive asset securitization endorsed by overly optimistic
credit agencies. The resulting crisis is a classic Irving Fisher
debt deflationary recession (certainly as it applies to financial
institutions), whereby the reduction of debt leads to distress selling,
which leads to a fall in the level of prices. This in turn reduces net
worth and profit potential, leading to bankruptcies, all of which
results in a loss of confidence. The consequence is a reduction in
lending, which feeds the cycle.

There are two fundamental ways out of this situation: a deep,
prolonged recession or inflationary credit expansion. The recession
is already upon us, but it is politically unacceptable to let the
recession run its natural course without government intervention.
The second option, inflationary credit expansion, is the apparent
policy choice today. In effect, the policy-makers are encouraging
debt over savings in order to stimulate the economy. Ironically, it is
this policy which got us into this mess in the first place.

Looking forward, a policy of inflationary credit expansion will result
in low interest rates for a period of time and materially increased
government debt. Sound familiar? If this policy is successful, it will
fuel the flow of credit, which will increase economic growth and
result in a firming of asset pricing. If not successful, we may merely
be kicking a bigger problem to the future.

What do we do now?
As Fed Chairman Ben Bernanke has repeatedly stated, “until we
stabilize the financial system, a sustainable economic recovery will
remain out of reach.” We agree. We also believe the following
issues need to be addressed:

Too big to fail — No concept seems more antithetical to capitalism
than the phrase, too big to fail. Effective capitalism requires failure.
The concentration of financial power coupled with the moral
hazard which accompanies the implicit government backing of
companies deemed too big to fail will cause market distortions
and eventually threaten our financial system. This is not an easy
issue, as many institutions today are too big to fail. In addition, we
have compounded the issue by encouraging these same financial
institutions to acquire other failing large institutions (often with
government subsidy), making the resulting entity even more
difficult to regulate and, again, too big to fail. While not a popular
concept among the financial giants today, the only real way to
reduce systemic risk and strengthen our financial system is to not
allow any institution to become too big to fail. This needs to be
a global policy to address the tired arguments that U.S.-based
institutions must be big enough to compete globally.

Derivatives — There is no question that derivatives are an essential
tool for managing risk. However, many derivative contracts are
structured and traded in a manner which makes it difficult to
monitor and assess counterparty risk and systemic risk. We need to
develop clearing houses, which will reduce the aforementioned risks.
This initiative cannot be completed fast enough. In addition, we
need to thoughtfully evaluate the question of who has an appropriate
“insurable interest” with respect to credit default swaps.

Pro-cyclical regulation — Regulation and accounting policy should
not exaggerate the cyclical nature of the financial services industry
but rather be more counter-cyclical. For example, during good
economic times, banks should be required to increase potential loss
reserves, and during difficult times, these reserves may actually fall
as assets are written down. The same is true of mark-to-market
accounting. Our regulations and accounting policies should
recognize that business and the economy are neither as good nor as
bad as a current snapshot would suggest.

Short-sale symmetry — A number of questions exist regarding
short selling. We believe that short selling is an important element
of any market and enhances liquidity. However, the rules for
short selling should have symmetry with the rules regarding long
purchases, as follows:

• Require delivery of shares sold short – The current rules for
settling short sales are different than those for long purchases,
and as a result, naked short selling can and does occur. This
discrepancy should be eliminated.

• Provide equal disclosure of short positions – The current
disclosure rules regarding long positions should be applied
to short positions. Short positions should be reported on a
quarterly basis, and any short position in excess of 5% of shares
outstanding should be reported on the same basis as 5% long
positions. Transparency is key to this issue.

Our outlook
There is no question these are difficult and tumultuous times.
However, during times of market upheaval, significant opportunities
exist for the companies that are both well positioned and well
capitalized. Stifel Financial is one of these companies. The
environment to attract and retain entrepreneurial and capable
people, which will result in increased market share, has never held
greater promise. We intend to continue to seize this opportunity.

As always, we offer our sincere thanks to our shareholders and to
our clients for their support and to our associates for their continued
commitment to excellence.

Ronald J. Kruszewski
Chairman, President, and Chief Executive Officer
April 13, 2009

Private Client group

The Private Client Group consists of 1,142 Financial Advisors
in 196 offices located in 35 states and the District of Columbia,
along with 173 independent contractors affiliated with Century
Securities Associates. Led by President and Co-Chief Operating
Officer Scott McCuaig and Chief Financial Officer Jim Zemlyak,
the Private Client Group has been, and continues to be, the
largest contributor to the Company’s net revenues and profits
and again produced record results.

enabled Stifel to gain a stronger presence in the Ohio Valley
Region, bolstering the Eastern Region by giving the firm
an additional 18 offices and 75 Financial Advisors in Ohio,
Pennsylvania, and Western New York. This acquisition also
allowed the firm to further build upon and capitalize on the
experience gained through the successful acquisitions and
integrations of the Legg Mason Capital Markets Group in 2005
and Ryan Beck in 2007.

Financial highlights for the Private Client Group in 2008
include:

• Net revenue of $461.4 million, an increase of 6%
from 2007.
• Record operating contribution of $98 million, a 2%
increase from 2007.

The firm’s selective recruiting efforts continue to pay off, as more
and more financial professionals make Stifel Nicolaus their Firm
of Choice. The firm opened 34 Private Client Group offices
in 2008, added 194 Financial Advisors, and finished the year
ranked as the 10th-largest brokerage firm in the country in terms
of registered representatives.

Eastern Region

Eastern Region Director Allen Brautigam expanded the firm’s
footprint into New Hampshire, South Carolina, and Vermont.
Through organic growth, the firm added a total of 17 new
Private Client Group offices.

In December, the firm closed on the acquisition of Youngstown,
Ohio-based Butler Wick & Company, Inc., a regional firm
with a culture and approach similar to Stifel’s. This transaction

Western Region

In August 2007, Stifel began its ambitious expansion efforts on
the West Coast with the hiring of John Lee, Western Region
Director. By the end of 2007, Lee had quickly established
a foothold for the firm in California, opening four offices.
In 2008, the firm continued its rapid pace of expansion in
California with the addition of 11 more offices. 2008 also
saw the opening of Stifel’s first new offices in Arizona, Hawaii,
Oregon, and Washington, for a total of 16 new offices.

Rocky Mountain Region

Always mindful of seizing opportunities as they become
available, Stifel hired Paul Coffee as Managing Director for its
Rocky Mountain Region.

Coffee comes to Stifel after 34 years at A.G. Edwards/Wachovia
Securities, where he was Western Regional Director responsible
for overseeing 70 offices. At Stifel, he will be spearheading the
firm’s expansion efforts in Colorado, Arizona, and Utah – states
that have been identified as key areas for strategic growth in 2009.

FInAnCIAl ADvISoRS

1,142

966

neT RevenueS
(in millions)

461

436

556

439

467

412

231

187

197

163

5
33333

equity Capital Markets
equity Capital Markets
Investment Banking

The challenges of 2008 have produced major headwinds in the capital markets that continue into 2009. Stifel’s
Investment Banking Group, however, has withstood those challenges and taken advantage of unique opportunities to
emerge stronger and better positioned to serve its clients’ needs.

The Investment Banking Group consists of 12 industry-focused divisions: Aerospace, Defense & Government
Services; Business Services; Consumer and Retail; Diversified Industrials; Education; Energy and Natural Resources;

neT RevenueS
equITy CAPITAl MARkeTS
(in millions)

238

216

Financial Institutions; Healthcare; Real Estate; Technology;
Telecommunications & Media; and Transportation, as well as
Private Finance and Financial Sponsors Groups.

In 2008, the firm:
• Lead or co-managed 49 public offerings with aggregate proceeds

150

exceeding $10.2 billion.

• Acted as financial advisor in 51 mergers and acquisitions with

total consideration exceeding $3.2 billion.

•Served as placement agent in 3 transactions, raising $50 million.

The Group added a number of senior bankers during 2008 and
early 2009 and now totals more than 120 investment banking
professionals in 10 offices across the country. This influx of talent
has effectively enhanced the firm’s capabilities and positioned Stifel
for future growth.

• The Aerospace, Defense & Government Services Group welcomed the addition of Tom Murphy, who is primarily
focused on aerospace, defense, and security companies.

• The Energy and Natural Resources Group expanded through the addition of Patrick Keeley, Chris Shebby, Kerry
McKeon, Julien Smythe, James Lee, and six other energy bankers. The group is co-headed by Sandy Stewart and
Chris Shebby. Patrick Keeley serves as Co-Head of Investment Banking and works with other industry groups in
business development, with a particular focus on Rule 144A equity transactions. Kerry McKeon focuses on the
mining and metals sectors, with an emphasis on the coal industry, while Julien Smythe is focusing on growing the
firm’s presence in the Houston market.

• The Financial Institutions Group, led by Co-Head of Investment Banking Rick Maples, added Kent Carstater, Peter
Kapp, and Scott Brewer. Peter Kapp and Kent Carstater serve as senior relationship officers with a primary focus on
the banking sector, while Scott Brewer serves as a senior relationship officer covering the insurance industry.

• The Healthcare Group expanded its resources with the addition of Adam Kohn, who is primarily focused on the
medical devices sector.

• The Technology Group added Doug Brockway, who offers extensive experience and strong relationships in the
technology sector.

• The Financial Sponsors Practice welcomed Group Head Joe Purcell and Robert Kent, who lead the firm’s
commitment to building long-term relationships in the financial sponsor community.

Stifel Transactions Win “Deal of the Year” Awards

Three prominent Stifel transactions which closed in 2008 received recognition from leading trade publications.

Stifel won both the Consumer Products and Retail M&A Turnaround Deal of the Year
($150 million and above) awards from the M&A Advisor and the Turnaround Deal of the
Year award from Buyouts for its role as exclusive financial advisor to Dorel Industries, Inc.
in its $200 million acquisition of the Cannondale Bicycle Corporation from an affiliate of
Pegasus Capital Advisors. The Cannondale acquisition instantly made Dorel a leading global
player in the premium end of the bicycle market and provided Dorel substantial critical
mass and growth in the U.S. and Europe. Mitch Schaffer, Managing Director – Consumer
Investment Banking, led Stifel’s M&A team, supported by Director Jeffrey Sherry.

The firm was recognized with Deal of the Year honors from The Deal magazine in the private
equity sector and Small Market Deal of the Year from Buyouts magazine for serving as M&A
advisor in the sale of Specialty Coating Systems Inc., a portfolio company of Bunker Hill
Capital, to Berwind Corp. The approximately $200 million transaction closed in just 22
days after signing the letter of intent. The Stifel Nicolaus team was led by Managing Director
Jon Tebol, supported by Vice President Bharat Ramprasad.

B E R W I N D

apei A M E R I C A N P U B L I C

E D U C A T I O N, I N C.

ABS Capital’s realization of its investment in American Public Education, Inc. (APEI) won
in two categories of the Buyouts Deal of the Year awards: Deal of the Year and Middle Market
Deal of the Year. The Capital Markets Division of Legg Mason Wood Walker, Inc., which
was acquired by Stifel in 2005, advised APEI in the initial private placement by ABS Capital
in 2002. Stifel co-managed all three of the APEI public offerings in which ABS monetized
its investment in APEI, two in 2008 and one in 2007. Jim Rowan, Managing Director –
Education Group, led the Stifel team, supported by Meredith Ruble, Director.

Equity Capital Markets
Research

Stifel continued its investment in Equity Research in 2008, growing the Equity Research Group to 147 professionals providing
coverage of more than 800 equities in 12 industries. Amid layoffs and consolidation on Wall Street, as of March 2009, Stifel
ranked as the third-largest provider of equity research and the largest provider of small cap research in the U.S.

OvERall COvERagE
Company
J.P. Morgan
Barclays Capital
Stifel Nicolaus
Bank of America/Merrill Lynch
UBS
Citigroup
Goldman Sachs
Credit Suisse
Raymond James
Oppenheimer & Co.

Stocks
1,095
898
827
806
786
763
746
716
702
656

SMall Cap COvERagE
Company
Stifel Nicolaus
J.P. Morgan
Raymond James
Sidoti & Company LLC
Oppenheimer & Co.
RBC Capital Markets
Jefferies & Co.
Barclays Capital
Piper Jaffray
Bank of America/Merrill Lynch

Stocks
463
415
400
395
369
327
304
276
272
263

Source: StarMine (4/2/09 report), with small cap representing less than $1 billion.

The Group had another banner year in 2008, earning recognition from the national financial media. Stifel’s Equity Research
Group finished #1 in Stock Picking and #1 in Earnings Estimate Accuracy out of 246 firms in StarMine’s 2008 domestic
rankings. Building upon the momentum from its #1 ranking in earnings estimate accuracy in 2007, Stifel enhanced its record
for high-quality research by earning both #1 rankings in 2008. In compiling these rankings, StarMine employs the same
methodology used in its annual Best Brokerage Analysts Survey, released in conjunction with the Financial Times.

In May, Stifel research analysts won a total of 14 awards in the seventh annual FT/StarMine Best Brokerage Analysts Survey,
ranking the firm eighth among more than 235 firms.

Stifel analysts recognized for their stock-picking skill in this year’s survey were:

• Barry Bannister, #1 in the Machinery Industry
• Mark Swartzberg, #1 in the Beverages Industry
• Barry Bannister, #2 in the Construction & Engineering Industry
• Jerry Doctrow, #2 in the Real Estate Investment Trusts (REITs) Industry
• Anthony Davis, #3 in the Thrifts & Mortgage Finance Industry
• Scott Devitt, #3 in the Internet & Catalog Retail Industry
• Kit Spring, #3 in the Media Industry
• Oliver Wood, #3 in the Food Products Industry

In the earnings estimate accuracy category, Jerry Herman and Robert Craig
were recognized as the #10 Overall Estimators out of more than 1,900 analysts.
Other earnings estimate accuracy award winners were:

• Selman Akyol, #1 in the Gas Utilities Industry
• Jerry Herman & Robert Craig, #1 in the Diversified Consumer Services Industry
• Thomas Carroll, #2 in the Health Care Providers & Services Industry
• Mark Swartzberg, #2 in the Beverages Industry
• Todd Weller, #2 in the Software Industry

That outstanding performance was followed by more good news
for Stifel from The Wall Street Journal’s Best on the Street 2008
Analysts Survey in which Stifel ranked fifth out of the 72 firms
that qualified for the survey, up from sixth place in the 2007
survey.

Individual analysts recognized for their stock-picking skill in this
year’s survey were:

• Paul Forward, #1 in Mining & Metals
• Barry Bannister, #2 in Heavy Machinery & Materials
• Oliver Wood, #2 in Food & Tobacco
• Robert Craig and Jerry Herman, #2 in Specialty Retailers &
Services
• Tony Davis, #3 in Thrifts
• William Loomis, #3 in Internet & Computer Services
• John Baugh, #4 in Home Construction & Furnishings
• Mark Swartzberg, #5 in Beverages

“We are once again very pleased with the performance of our
research department in 2008,” commented Hugh Warns, Director
of Research at Stifel Nicolaus. “Stifel has ranked among the top
20 out of more than 200 firms in the FT/StarMine survey in
each of the last five years, with three top 10 finishes in that span.
Our top five ranking in The Wall Street Journal’s survey continues

a trend of superior performance as well. According to our
calculations, Stifel Nicolaus is the only firm which has ranked in
the top 12 in each of the last five annual surveys (including Legg
Mason research acquired by Stifel on December 1, 2005). We
are extremely proud that we have consistently identified money-
making ideas in a variety of market conditions for our clients.”

STIfEl RESEaRCh UnIvERSE

Consumer
& Retail
18%

Financial
Institutions
25%

Real Estate
10%

Healthcare
8%

2%
3%

Education

Diversified Industrials

Telecom & Media

Business Services

Technology

Transportation

Energy & Power

A&D and Government Services

Institutional Equity Sales & Trading

Led by Tom Mulroy, the Institutional Equity Sales & Trading Group has developed a sustainable business model focused on providing high-
quality, differentiated research and offering institutional investors research-driven equity products with a dedication to value and service.
Consisting of over 160 talented and experienced individuals, the Group’s team of salespeople and traders works closely with Stifel’s research
analysts to provide timely dissemination of information to clients worldwide from eight offices in North America and Europe.

Amid the market turmoil that has caused many of the industry’s large institutional firms to fall by the wayside, Stifel has built its institutional
equities business into a growing force. Stifel’s steady, conservative business model has proven to be an asset, as institutional investors seek a
stable, reliable counterparty.

Stifel has also been afforded the opportunity, through its consistent revenue and earnings growth, to continue to invest in the quality of
its associates. The current environment has enabled Stifel to attract individuals who can make significant contributions to the Company’s
success, across all areas of the firm, including in Institutional Equity Sales & Trading.

fixed Income Capital Markets
public finance

In 2008, the Public Finance Group served as sole, senior, or co-
manager on 85 deals worth a total of $3.2 billion.

Denver Public Finance Earns Top Rankings

Under the leadership of Steve Bell and Peter Czajkowski, Stifel
Nicolaus expanded its Public Finance practice, adding over 20
professionals and broadening the scope of analytical services
available to its clients. During 2008 and early 2009, the Group
renewed its commitment to municipal finance by adding a team
of eight new professionals to its St. Louis-based public finance
team as well as six new public finance offices located in Chicago,
Illinois; Cleveland, Ohio; Columbus, Ohio; Lansing, Michigan;
New York, New York; and San Antonio, Texas. The firm now has
a total of 60 Public Finance professionals in 14 offices nationwide.

Stifel’s accomplishments have not gone unnoticed within the
public finance industry. According to ratings service Thomson
Financial, Stifel’s Denver Public Finance office earned #1 rankings
for its involvement in two prominent deals:

Colorado Higher Education Long-Term Municipal New Issues
(equal credit to each co-manager)
Par amount – $115.4 million
Market Share – 21.9

Colorado $10 Million and Under Long-Term Municipal New Issues
(full credit to book manager, equal if joint)
Par amount – $74.5 million
Market Share – 20.0

Case Study: City of St. louis

$21,850,000, St. Louis Municipal Finance Corporation
Leasehold Revenue Bonds, Series 2008
(Convention Center Capital Improvement Projects)

Stifel Nicolaus was hired by the City of St. Louis to senior manage the financing
of its convention center in September 2008, winning the assignment over eleven
competing firms. The final team assembled by the City of St. Louis consisted of
Stifel and five co-managers.

The first series of bonds was sold with a municipal bond insurance policy from
Assured Guaranty. In between pricing and closing, Assured Guaranty was
downgraded by Moody’s Investors Service to Aa2, causing one of the co-managers
on the issue to renege on its liability of over $3.8 million of bonds sold to one
of its institutional accounts. An institutional account that purchased the bonds
informed the co-manager that it would not honor the agreed-upon trade because
of the downgrade. Without another buyer on board, the co-manager had to renege on its liability, because it did not have the
necessary capital to purchase its liability of bonds from the issuer.

After careful consideration, Stifel decided to commit its capital to purchase the bonds from the issuer, assuming the
co-manager’s liability. With this commitment from Stifel Nicolaus, the City was able to close the transaction as scheduled.

Institutional fixed Income Sales, Trading & Strategies

Stifel’s Institutional Fixed Income Sales, Trading & Strategies
Group offers institutional clients a comprehensive combination of
fixed income products and services, including expertise in trading,
research, and banking.

In 2008, the Group opened 3 new offices (bringing the total
number of offices to 29 in 21 states) and added 17 new
institutional salespeople, for a total fixed income distribution force
of 99 seasoned professionals. The expansive trading and strategies
platform is comprised of 42 experienced traders, strategists,
and analysts, providing a key foundation for the more than 200
professionals in the Fixed Income Capital Markets Group.

In 2008, the Group:

• Transacted over $120 billion in client fixed income
trade flow, including mortgages (residential and
commercial), governments and agencies, alternative spread
product, asset-backed securities, corporates, municipals,
and preferreds.

• Established over 450 new client product relationships.

• Serviced over 1,400 active institutional clients nationwide,
including money managers, financial institutions,

nET REvEnUES
fIxEd InCOME CapITal MaRkETS
(in millions)

175

insurance companies, trust companies, pension funds,
municipalities, hedge funds, and corporations in 8,300
different institutional accounts.

• Continued to grow its trading platform, adding new or
additional capabilities in alternative structured products,
residential mortgages, credit securities, and liability
products, including structured repo, CD issuance, and
whole loan trading.

• Expanded the breadth of its Research and Strategies
Group to provide clients with targeted total return
approaches as well as alternative funding strategies
for financial institutions.

In 2008, Stifel expanded its
Fixed Income Alternative Spread
Products Group with the addition of
12 highly regarded professionals
who specialize in aircraft finance.
This group of talented individuals forms
Stifel’s new Aircraft Finance and Credit
Solutions practice and broadens the
Company’s ability to provide creative debt
capital markets solutions to clients.

Market Strategists

Stifel clients have access to two investment advisory groups led by some of the most prominent investment managers in the industry:
Washington Crossing Advisors, led by Joe Battipaglia, and EquityCompass Strategies, led by Richard Cripps.

Washington Crossing Advisors

Washington Crossing Advisors offers fee-based investment advisory services via the Stifel Core Portfolios Program (S|CORE). The Washington
Crossing Advisors group is led by Chief Investment Officer Joseph V. Battipaglia and Portfolio Managers Kevin R. Caron and Chad A.
Morganlander. Collectively, the group has over 50 years of combined investment experience as research analysts, strategists, and portfolio
managers, and the team has worked together successfully to help investors build wealth for over 15 years.

Washington Crossing Advisors believes in viewing markets from the “top down” for tactical asset allocation portfolios as well as using “bottom-
up” approaches for equity investing. By combining both approaches in their daily practice, they strive to gain a broader perspective on what is
driving financial markets.

Washington Crossing Advisors uses disciplined, time-tested approaches to wealth management through two strategy platforms: the
CONQUEST Global Tactical Asset Allocation Strategy and the VICTORY All-Capitalization Value Equity Strategy.

Mr. Battipaglia is Market Strategist for the Stifel Nicolaus Private
Client Group and Chief Investment Officer of Washington
Crossing Advisors. He is the former chairman of investment
policy at Ryan Beck & Co., where he conducted strategic market
and economic analysis in support of the firm’s retail network
and institutional presence. Prior to joining Ryan Beck & Co. in
2002, Mr. Battipaglia served over an 18-year period in a number
of executive positions at Gruntal & Co. Before joining Gruntal in
1984, he was a financial analyst for the Exxon Corporation and
worked as a securities analyst at Elkins & Co.

Mr. Battipaglia is featured frequently in the national media,
including CNBC, FOX News, and PBS’ Nightly Business Report.
Additionally, he speaks regularly with reporters from The New
York Times, The Wall Street Journal, and other publications where
his market views are often quoted. Mr. Battipaglia is a former
trustee of the Securities Industry Institute, which is the Securities
Industry and Financial Markets Association’s premier leadership
and management education program.

Mr. Battipaglia graduated Phi Beta Kappa with a degree in
economics from Boston College and earned his M.B.A. at the
Wharton Graduate School of Business, University of Pennsylvania.

Joe Battipaglia
Chief Investment Officer – Washington Crossing Advisors

EquityCompass Strategies

EquityCompass Strategies is a research and investment advisory unit of Choice Financial Partners, a wholly owned subsidiary and affiliated
SEC Registered Investment Advisor of Stifel Financial Corp., and provides fee-based investment advisory services to Stifel’s Private Client
Group and institutional investors through the S|CORE Program. Led by Chief Investment Officer Richard Cripps, EquityCompass has
worked closely with the financial advisor community for close to a decade, providing investment advice, financial market commentary, and
stock opinions – summarized in its monthly publication, Update & Review – as well as tools for stock selection and portfolio management.
The group currently has over 8,000 U.S. and international stocks under coverage and publishes seven style-specific model portfolios and six
stock selection lists based in alternative strategies.

The EquityCompass investment philosophy is based on the belief that the key to achieving consistent superior investment performance that
withstands volatile market conditions is an investment process which relies on tested analysis, sound investment principles, and disciplined
decision-making. The investment process employs a series of proprietary, but fully transparent, quantitative models that incorporate insights
on relative valuation, level and direction of expectations, investor over-/underreaction, and shareholder value creation for stock selection and
portfolio management.

Richard Cripps is the Chief Investment Officer of EquityCompass
and its parent, Choice Financial Partners, Inc. Prior to his
current role, Mr. Cripps directed the Portfolio Strategy Group of
Stifel Nicolaus Equity Research, where he also served as a senior
member of the investment committee with responsibilities for
equity market analysis and portfolio strategy.

Prior to joining Stifel Nicolaus, Mr. Cripps spent his professional
career with Legg Mason Wood Walker, Inc. in various roles. In
1997, he became Chief Market Strategist and Co-Chairman of the
investment committee and worked closely with the firm’s equity
analysts in developing and monitoring investment opinions, as
well as providing market commentary, strategy, and portfolio
advisory to individual and institutional clients.

Mr. Cripps developed the EquityCompass, a series of equity
models that quantify investment characteristics for stock selection
and portfolio management. Insights and portfolio discipline from
the EquityCompass were utilized in a variety of programs at Legg
Mason and are currently being offered by Stifel’s Private Client
Group.

Mr. Cripps’ market commentary has frequently appeared in
leading financial news media. He has also been a participant in
economic forums organized by the White House to monitor the
market impact of various economic policies on financial markets.

Richard E. Cripps, CFA
Chief Investment Officer – EquityCompass Strategies Group

Mr. Cripps has a B.S. in finance from James Madison University
and serves on the university’s School of Business Executive
Advisory Committee. He is a CFA charterholder and member of
the Baltimore Security Analysts Society.

Stifel Bank & Trust

Stifel Bank & Trust offers banking services to private and
corporate clients. This broader range of services gives a unique
competitive edge to Stifel Nicolaus’ Financial Advisors in today’s
marketplace, enabling them to meet additional financial needs of
their clients.

The benefit of Stifel Bank is two-fold. Stifel Bank assists the
firm by providing highly competitive lending products to Stifel
Nicolaus clients and enables the firm to better utilize private client
cash balances. Stifel Bank’s strength in lending includes mortgage
and collateralized securities lending.

Responding to the credit crisis, Stifel Bank implemented a
conservative approach to loan growth in step with this new
economy.

Mortgage Lending

Mortgage originations for Stifel Bank 2008 were up nearly ten-
fold over 2007, fueled by the addition of fourteen lenders and
their support teams. Stifel Bank recruited top mortgage bankers
in the Midwest to service the needs of Stifel Nicolaus clients
across the country, as well as their own client base. The banking
operations team was hand-chosen to provide the technology and
resources to quickly implement this growth strategy.

The mortgage program is focused on quality, originating loans
primarily to be sold on the secondary market. “Some low risk
loans and home equity lines of credit with high level qualifying
criteria are selected to be retained in the bank’s loan portfolio,”
according to Chris Reichert, President of Stifel Bank.

The year began and ended strong, with high volume in mortgage
originations. The summer “purchase season” was relatively slow,
mirroring the decline in purchase transactions and short-lived
rise in mortgage rates. The current historical low interest rate
environment will continue to fuel strong growth in mortgage
lending throughout the coming year.

Pledged-Asset Lending

Stifel Bank originated Stifel Pledged Asset (SPA) Account loans
and lines of credit of $67 million in 2008. The SPA Account
represents a very convenient source of liquidity for a client,
enabling the client’s investment portfolio strategy to remain in tact
when cash flow needs arise for large purchases, business growth,
or other needs. SPA Accounts utilize a client’s eligible non-
margined securities held at Stifel Nicolaus as collateral. The SPAs

have a very low risk profile, and the rates correlate with the bank’s
primary funding source of floating rate insured deposits from the
firm’s clients.

Commercial Lending

In 2008, Stifel Bank focused on maintaining a high level of quality
and customer service in commercial lending. The addition of
technology, staffing, and expertise allowed the commercial lending
team to selectively add new commercial loans, implement a more
hands-on approach to the loan renewal process, and carefully
monitor its $120 million commercial loan portfolio.

Banking

Stifel Bank has taken on a more visible role for core deposit
opportunities. The FDIC’s deposit coverage increase and Stifel
Bank’s introduction of CDARS, offering coverage up to $100
million, allow Stifel Bank to provide extensive FDIC coverage to
high net worth clients.

Working with the Financial Advisors at Stifel Nicolaus has
provided an opportunity to the bank staff to provide additional
niche services to assist the Financial Advisors in meeting the
changing needs of their client base. The Stifel Bank operation is
scalable and poised to grow with the firm.

Technology & Operations

Looking forward, the Technology & Operations team has a great
deal planned for the coming year. Many of the Company’s client-
facing systems are undergoing upgrades. New account features
that will further bridge the bank’s capabilities to investment
accounts are in the final stage of deployment. Stifel is embracing
virtualization capabilities across the Information Technology
organization. Compliance and Risk Management are evaluating
the latest surveillance tools. Exciting plans are in place for
improved remote access to all of Stifel’s systems. And, at the
time of this publication, the Technology & Operations team had
already completed a significant conversion to add the Butler Wick
accounts, branches, and associates to the Company. Likewise,
plans are well underway to effect another significant conversion
later in the year to add UBS branches.

While challenging, it is these very growth opportunities that have
brought together the platform areas of Stifel in the past. The
Technology & Operations team is confidently looking forward to
the challenge and continuing to make Stifel’s support areas among
the best in the industry.

2008 was an exciting year for the Stifel platform. While the
markets were certainly challenging, the Technology & Operations
team focused on strengthening Stifel’s capabilities, service, and
expertise. As the Company added talented associates to the Private
Client Group, the Equity and Fixed Income Capital Markets
Groups, and Stifel Bank & Trust, most of the key support areas,
including Operations, Information Technology, Compliance, and
Risk Management, also added to their respective teams. During
the year, these areas completed numerous projects and prepared to
continue to meet the challenge in the year ahead. The platform
is stronger than ever, updated with leading-edge technology and
staffed and led by exceptional individuals.

In 2008, the Information Technology Group continued to build
out Stifel’s network infrastructure and upgraded numerous data
center capabilities. These investments added reliability and
redundancy to applications, ranging from simple file storage, data
backup, and e-mail processing to sophisticated equity and fixed
income trading and order routing systems. Over the year, the
team upgraded several key business software applications to ensure
that Stifel has the latest technology in place. The Company’s
electronic trading systems can now access more marketplaces than
ever, ensuring best execution and product access. And finally,
because Stifel embraces a high-touch support philosophy for
associates, the Information Technology Group added significant
depth to the team of professionals who confidently assist fellow
Stifel team members to ensure the Company continues to leverage
its technology.

On the Operations front, almost every discipline also added to
their respective teams to stay ahead of the growth of the Company.
And, in addition to adding new skilled operations associates
during 2008, Stifel also implemented enhanced procedures and
systems to streamline processing and improve communication
between the front and back office. Efforts are still underway
to continue improving automation and to reduce paperwork
and processes to enhance and expedite the service experience.
Fortunately, the team of professions leading Stifel’s efforts to
improve the operational platform has tremendous industry
knowledge and the energy and vision it will take to revamp how
the Company approaches business operations.

Board of directors

Stifel Financial Corp. Board of Directors and Officers

Ronald J. Kruszewski*
Chairman of the Board, President,
and Chief Executive Officer

Richard F. Ford*
Retired Managing General Partner
Gateway Associates, LP

James M. Oates*
Chairman
Hudson Castle Group, Inc.

Robert J. Baer*
President and Chief Executive Officer
Metro

Frederick O. Hanser*
Vice Chairman
St. Louis Cardinals, LLC

Ben A. Plotkin*
Senior Vice President
Vice Chairman

Bruce A. Beda*
Chief Executive Officer
Kilbourn Capital Management, LLC

Richard J. Himelfarb*
Senior Vice President
Vice Chairman

Kelvin R. Westbrook*
President and Chief Executive Officer
KRW Advisors, LLC

Charles A. Dill*
Principal
Two Rivers Associates

Robert E. Lefton*
President and Chief Executive Officer
Psychological Associates, Inc.

James M. Zemlyak*
Senior Vice President, Treasurer,
and Chief Financial Officer

John P. Dubinsky*
President and Chief Executive Officer
Westmoreland Associates, LLC

President and Chief Executive Officer
CORTEX

Scott B. McCuaig*
Senior Vice President
President, Stifel Nicolaus

Thomas P. Mulroy*
Senior Vice President

David M. Minnick
Senior Vice President, General Counsel,
and Corporate Secretary

David D. Sliney
Senior Vice President

*Director

Stifel, Nicolaus & Company, Incorporated Board of Directors

Ronald J. Kruszewski
Chairman of the Board and
Chief Executive Officer

Scott B. McCuaig
President
Co-Chief Operating Officer

James M. Zemlyak
Executive Vice President
Co-Chief Operating Officer

Steven H. Bell
Senior Vice President
Director, Denver Public Finance

Richard J. Himelfarb
Executive Vice President
Director, Investment Banking

Michael F. Imhoff
Senior Vice President
Director, Denver Municipal Trading

Thomas R. Kendrick IV
Senior Vice President
Director, Syndicate

Thomas P. Mulroy
Executive Vice President
Director, Equity Capital Markets

J. Joseph Schlafly III
Senior Vice President
Director, Private Markets

David D. Sliney
Senior Vice President
Director, Strategic Planning,
Technology, and Operations

Hugo J. Warns III, CFA
Senior Vice President
Director, Equity Research

Branch Offices

Arizona
Green Valley – (520) 393-1500*
Phoenix – (602) 952-2500*

California
Bonsall – (760) 643-1235*
Fort Jones – (530) 468-2408*
Grass Valley – (530) 273-9877*
Lincoln – (916) 409-1300*
Monterey – (831) 333-0963*
Murrieta – (951) 461-7220*
Newport Beach – (949) 252-1324*
Oxnard – (805) 486-0400*
Paradise – (530) 872-5110*
Pasadena – (626) 564-0311*
Redding – (530) 244-7199*
Roseville – (916) 626-3322*
San Francisco – (415) 398-2929•
San Juan Capistrano – (949) 234-2340*
Santa Rosa – (707) 542-3521*
Visalia – (559) 622-1040*
Walnut Creek – (925) 746-6560*
Westlake Village – (805) 496-8150*

Colorado
Colorado Springs – (719) 442-2646*
Denver – (303) 534-1180*
Denver – (303) 296-2300•
Fort Collins – (970) 267-9666*•
Glenwood Springs – (970) 945-5275*
Greenwood Village – (303) 290-1040*

Connecticut
Avon – (860) 677-2132*
Hamden – (203) 772-7200*
New London – (860) 440-3373*

District of Columbia
Washington – (202) 686-6675*
Washington – (202) 756-7760•

Florida
Boca Raton – (561) 982-2600*•
Cape Coral – (239) 242-2358*
Melbourne – (321) 757-7209*
Naples – (239) 417-6740*
Palm Beach Gardens – (561) 615-5300*
Ponte Vedra Beach – (904) 543-7120*
Sarasota – (941) 366-5443*
Vero Beach – (772) 299-4967*

Georgia
Atlanta – (404) 869-3576•
Columbus – (706) 660-3940*
LaGrange – (706) 845-7888*
Warner Robins – (478) 953-1313*

Hawaii
Honolulu – (808) 521-2601*

Illinois
Belleville – (618) 233-5685*
Champaign – (217) 359-4686*
Chicago – (312) 454-3800*
Chicago – (312) 726-5900*•
Decatur – (217) 429-4290*
Edwardsville – (618) 659-3780*
Geneva – (630) 845-7900*
Jacksonville – (217) 243-8060*
Lake Forest – (847) 615-0677*
Mattoon – (217) 235-0353*
Oregon – (815) 732-1312*
Orland Park – (708) 364-0034*
Quincy – (217) 228-0053*
Rockford – (815) 654-5500*
Springfield – (217) 726-0875*
Waterloo – (618) 939-9400*

Indiana
Anderson – (765) 649-2339*
Crown Point – (219) 756-0100*
Fort Wayne – (260) 459-3989*
Indianapolis – (317) 706-1420*
Indianapolis – (317) 571-4600*
New Albany – (812) 945-8598*
South Bend – (574) 288-3040*

Iowa
Des Moines – (515) 699-8510•
Waterloo – (319) 234-4800*

Kansas
Manhattan – (785) 776-1066*
Overland Park – (913) 345-4200*•
Topeka – (785) 438-5400*
Wichita – (316) 264-6321*

Kentucky
Danville – (859) 236-1588*
Louisville – (502) 425-1230*
Louisville – (502) 897-3081•
Shelbyville – (502) 633-7170*

Louisiana
New Orleans – (504) 525-7711*•

Maryland
Baltimore – (410) 659-2300*
Baltimore – (443) 224-1400•
Bel Air – (410) 809-6700*
Hunt Valley – (410) 527-1138*

Massachusetts
Boston – (617) 235-7800*
Boston – (617) 737-5438•
Harwich – (508) 432-2079*
Hyannis – (508) 420-7000*
Longmeadow – (413) 565-8100*
Wellesley – (781) 239-2800*

Michigan
Ann Arbor – (734) 213-5103*
Birmingham – (248) 594-3879•
East Lansing – (517) 333-3576*•
Fremont – (231) 924-0250*
Grand Haven – (616) 846-3620*
Grand Rapids – (616) 942-1717*
Grosse Pointe Farms – (313) 886-4493*
Portage – (269) 384-5024*
Traverse City – (231) 946-4975*

Minnesota
Edina – (952) 831-0160*
Golden Valley – (763) 542-3700*
Minneapolis – (612) 455-5555*•
New Ulm – (507) 354-8589*
Rochester – (507) 292-9760*
St. Cloud – (320) 253-1300*
St. Paul – (651) 291-8552*
Wayzata – (952) 473-6010*

Mississippi
Jackson – (601) 366-7890*

Missouri
Camdenton – (573) 346-4242*
Cape Girardeau – (573) 335-8454*
Chesterfield – (636) 530-6600*
Clayton – (314) 862-8800*
Columbia – (573) 874-2199*
Frontenac – (314) 872-8900*
Jefferson City – (573) 635-7997*
Joplin – (417) 781-6161*
Kansas City – (816) 531-7777*
Kirkwood – (314) 909-0238*
Rolla – (573) 364-8930*
Springfield – (417) 886-2855*
St. Louis – (314) 342-2000*•
St. Peters – (636) 939-2676*

Nebraska
Omaha – (402) 955-1033*

New Hampshire
New London – (603) 526-8130*

New Jersey
Cherry Hill – (856) 661-3640•
Florham Park – (973) 549-4000*•
Fort Lee – (201) 585-6150*
Marlton – (856) 810-4800*
Princeton – (609) 799-1180*
Ramsey – (201) 669-3030*
Roseland – (973) 533-4000*•
Roxbury – (973) 598-8300*
Shrewsbury – (732) 450-9000*

Madison – (608) 241-9516*
Mequon – (262) 243-3125*
Merrill – (715) 536-0073*
Milwaukee-Glendale – (414) 276-5014*
Milwaukee – (414) 270-0190•
Oconomowoc – (262) 560-3800*
Oshkosh – (920) 303-1686*
Racine – (262) 554-4660*
Rhinelander – (715) 362-1719*
Stevens Point – (715) 343-5688*
West Bend – (262) 338-5889*

Stifel Nicolaus Limited
England
London • 011-44-20-7557-6030•
Spain
Madrid • 011-34-91-458-5500•
Switzerland
Geneva • 011-41-22-994-0606•

*Private Client Group Office
• Capital Markets Group Office

New York
Binghamton – (607) 651-9540*
Goshen – (845) 291-1131*
Hewlett – (516) 792-2200*
New York – (212) 351-4300*
New York – (212) 407-0579*
New York – (212) 247-3983•
New York – (212) 742-8923•
Olean – (716) 372-2839*
Oyster Bay – (516) 624-2700*
Poughkeepsie – (845) 471-8080*
Uniondale – (516) 719-7740*
White Plains – (914) 694-8600*

North Carolina
Brevard – (828) 877-5856*
Chapel Hill – (919) 932-3220•
Charlotte – (704) 554-6039*
Charlotte – (704) 554-7677•
Fayetteville – (910) 438-0715*
Greenville – (252) 353-2052*
Raleigh – (919) 645-5900*

North Dakota
Dickinson – (701) 225-9101*
Jamestown – (701) 251-1152*
Williston – (701) 572-4527*

Ohio
Akron – (330) 665-2916*
Alliance – (330) 823-7666*
Beachwood – (216) 831-3135*
Boardman – (330) 744-4351*
Canfield – (330) 744-4351*
Canton – (330) 454-5390*
Canton – (330) 493-1616*
Cincinnati – (513) 794-0030*
Cleveland – (216) 623-1170•
Columbus – (614) 463-9360*
Dayton – (937) 312-0610*
Dublin – (614) 789-9354*
Fairlawn – (330) 668-6257*
Granville – (740) 344-2600*
Kent – (330) 678-2151*
Lancaster – (740) 654-5996*
Mansfield – (419) 524-4009*
Marysville – (937) 644-8686*
Pepper Pike – (216) 593-7400*
Salem – (330) 337-9911*
Sandusky – (419) 625-5432*
Steubenville – (740) 264-7254*
Warren – (330) 393-1567*
Westlake – (440) 835-4170*
Westlake – (440) 899-9450*
Youngstown – (330) 965-6929*
Youngstown – (330) 744-4351*

Oklahoma
Oklahoma City – (405) 842-0402*
Tulsa – (918) 877-3361*

Oregon
Eugene – (541) 345-6003*
Medford – (541) 770-7350*
Portland – (503) 499-6260*
Salem – (503) 315-4993*

Pennsylvania
Allentown – (610) 782-5400*
Bethel Park – (412) 854-7500*
Bethlehem – (610) 997-6400*•
Camp Hill – (717) 730-1100*
Conshohocken – (610) 567-1900*
Franklin – (814) 432-3169*
Lebanon – (717) 279-3510*
Oil City – (814) 678-6552*
Philadelphia – (267) 256-0777*
Philadelphia – (215) 861-7150•
Pittsburgh – (412) 456-0200*•
Sharon – (724) 346-4175*
Warren – (814) 726-7067*
Yardley – (215) 504-1600*
York – (717) 741-8900*

South Carolina
Anderson – (864) 225-7177*
Bluffton – (843) 706-6150*
Florence – (843) 665-7599*

Tennessee
Memphis – (901) 766-0822*
Memphis – (901) 685-3321•
Nashville – (615) 277-7000*

Texas
Corpus Christi – (361) 693-3060*
Dallas – (214) 706-9450*•
Houston – (713) 655-1161•
San Antonio – (210) 558-3371•
Texarkana – (903) 792-3305*

Vermont
Manchester – (802) 362-4111*

Virginia
Manassas – (703) 392-4033•
Richmond – (804) 727-6400•

Washington
Seattle – (206) 654-3900*

Wisconsin
Appleton – (920) 991-1415*
Brookfield – (262) 794-1000*
Brookfield – (262) 794-0037•
Eau Claire – (715) 552-8003*
Green Bay – (920) 437-2555*

Shareholder Information

Annual Meeting
The 2009 annual meeting of stockholders will be held at Stifel’s headquarters, One Financial Plaza, 501 North Broadway, 2nd Floor,
St. Louis, Missouri, on Wednesday, June 3, 2009, at 11:00 a.m.

Stock Listings
The common stock of Stifel Financial Corp. is traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol “SF.”
The high/low sales prices for Stifel Financial Corp. common stock for each full quarterly period for the calendar years are as follows:

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Sales Price

2008

2007

High

Low

High

Low

$ 52.53

$ 37.00

$ 34.81

$ 24.77

59.45

60.61

50.00

34.31

31.56

30.42

41.27

41.36

42.32

28.29

32.51

29.37

Transfer Agent
The transfer agent and registrar for Stifel Financial Corp. is Computershare Trust Company, n.a., Kansas City, Missouri.

Reconciliation of GAAP Net Income to Core Earnings
A reconciliation of GAAP Net Income to Core Earnings and GAAP Net Income Per Diluted Share, the most directly comparable measure
under GAAP, to Core Earnings Per Diluted Share is included in the table below.

(in thousands, except per share amounts)

GAAP Net Income
Acquisition-related revenues, net of tax
Acquisition-related charges, net of tax
Private placement compensation
Acquisition-related compensation
Other non-compensation charges

Core Earnings

Earnings Per Share:

2005

$ 19,644
- -

- -
1,370
602

2006

$ 15,431
90

5,692
17,516
861

2007

$ 32,170
185

- -
29,947
4,486

2008

$ 55,502
3

- -
15,538
337

$ 21,616

$ 39,590

$ 66,788

$ 71,380

GAAP Earnings Per Diluted Share
Acquisition-related charges

Core Earnings Per Diluted Share

1.04
0.11

1.15

0.74
1.16

1.90

1.25
1.35

2.60

1.98
0.56

2.54

All stock price amounts presented above reflect the three-for-two stock split distributed in June 2008.

Please see inside for Stifel Nicolaus branch locations.

Stifel Financial Corp.
One Financial Plaza | 501 North Broadway | St. Louis, Missouri 63102
(314) 342-2000 | (800) 488-0970