Stifel Financial Annual Report 2019

FY2019 Annual Report · Stifel Financial

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ANNUAL REPORT 2019

ABOUT STIFEL

Put simply, Stifel is a growth company.

From our founding in 1890 through the late 1990s, Stifel was primarily a Midwestern brokerage firm providing investment advice
to individuals. Since the late 1990s, through strategic hiring and a series of acquisitions, Stifel has transformed itself to where
it is today, a diversified wealth management and investment banking firm, operating through a number of brands, subsidiaries,
and broker-dealers – Stifel, Nicolaus & Company, Incorporated, Stifel Bank & Trust, KBW, Miller Buckfire, Eaton Partners, and Stifel
Nicolaus Europe Limited, to name a few. Stifel has grown, and is built, around the strength and commitment of an increasingly
diverse group of like-minded entrepreneurial professionals.

Together we now serve a broad group of clients – individuals, institutions, municipalities, and corporations – providing a wide
array of services, ranging from investment advice, securities brokerage, lending and trust services, debt and equity capital raising,
strategic advice, and restructuring, across multiple geographies.

Although we operate under different Stifel brands, we collaborate across business units, functions, and geographies to deliver
differentiated capabilities to our clients and guidance to our associates. We are connected through a common infrastructure and,
most importantly, a common principle that has guided Stifel throughout its history – “Safeguarding the money of others as if it were
your own.” As our business has grown and evolved, this enduring principle has remained constant.

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

FIRM
OF
CHOICE

ADVISOR
OF CHOICE

FINANCIAL HIGHLIGHTS

OPERATING RESULTS:
in thousands, except per share amounts

2015

2016

2017

2018

2019

Total Revenues

$2,376,993

$2,642,370

$2,996,462

$3,194,957

$3,514,961

Net Income Available to Common Shareholders

Earnings Per Diluted Share
Non-GAAP Net Income1
Non-GAAP Earnings Per Diluted Share1

$92,336

$1.18

$149,252

$1.90

$77,614

$1.00

$173,496

$384,593

$431,077

$2.14

$4.73

$5.49

$185,705

$323,383

$429,442

$479,636

$2.39

$3.99

$5.28

$6.10

FINANCIAL POSITION:
in thousands, except per share amounts

Total Assets

Shareholders’ Equity

Book Value Per Share

201 5

2016

2017

2018

2019

$13,326,051

$19,129,356

$21,383,953

$24,519,598

$24,610,225

$2,492,416

$2,738,408

$2,861,576

$3,167,593

$3,614,791

$37.19

$38.84

$38.26

$42.62

$48.37

1 Non-GAAP net income and non-GAAP earnings per diluted common share represent GAAP net income and GAAP earnings per diluted common share adjusted for:
(1) acquisition-related charges other than duplicative expenses; (2) litigation-related expenses; (3) actions taken by the Company in response to the tax legislation
that was enacted in the fourth quarter of 2018 to maximize tax savings; (4) the favorable impact of the adoption of new accounting guidance during 2017 associated
with stock-based compensation; and (5) the revaluation of the Company’s deferred tax assets as a result of the enacted tax legislation. See Reconciliation of GAAP net
income to non-GAAP net income on page 18.

TOTAL REVENUES
(In millions)

NON-GAAP NET INCOME1
(In millions)

NON-GAAP EARNINGS
PER DILUTED SHARE1

900

1,800

2,700

3,600

120

240

360

480

1.75

3.5

5.25

7.0

TOTAL ASSETS
(In millions)

6,250

12,500

18,750

25,000

SHAREHOLDERS’ EQUITY
(In millions)

925

1,850

2,775

3,700

BOOK VALUE PER SHARE

12.25

24.50

36.75

49.00

1
SHAREHOLDER LETTER

The ongoing COVID-19 pandemic, a global health crisis derailing life and
work for families everywhere, presents a major challenge in writing this
shareholder letter. News of its spread, and of the differing government
responses across the globe, seems as volatile and unpredictable as
the virus itself. Governments have adopted varying degrees of social
distancing and quarantine, measures which necessarily place extraordinary
pressure on the economy and constrain business at every scale. Reliable
information is in short supply, leaving little basis for an evaluation of the
true risks on all sides – and to individuals in all their roles, as patients and
workers, consumers and investors, business owners, and family members.
Taken together, the health epidemic and the corresponding measures are
unprecedented and have, by their very nature, inserted tremendous
uncertainty into entire societies.

Amid this uncertainty, Stifel is doing its part to contribute to the ultimate
recovery. As a firm, we have prioritized the health and safety of our
associates while enabling them to continue providing fundamental services
to our clients. Our business continuity plans have allowed our associates
to operate in disaster recovery sites as well as in other remote locations
without interrupting essential systems. As I write this, we have successfully
implemented these plans across numerous geographies in which we
operate. We have also canceled events, eliminated most travel, and
carefully repositioned operational capabilities to maintain excellent service
and achieve increased social distancing.

I am proud of Stifel associates who have shown resolve, creativity, and
teamwork to achieve the dual objectives of promoting the safety of our
people while delivering exceptional service to our clients. By continuing to
provide essential and fundamental services, by remaining rational and dependable, by dispensing good advice, and above all by showing faith
in the strength and resiliency of the American system, we will play a vital role in the inevitable recovery.

RONALD J. KRUSZEWSKI
Chairman of the Board, Chief Executive Officer

2019 Financial Performance

The 2019 economy, which feels like a light year removed, nevertheless provided a strong foundation for our Company’s record year. Inflation
remained muted, unemployment fell to historic lows, and growth was generally consistent across our economy. The S&P 500 gained 29%, while
interest rates remained low.

In 2019, our business and financial results were the best in our illustrious 129-year history. Over the last several years, our diversity of business
has generated not only earnings growth, but also earnings stability. This stability is underscored by the fact that fee-based and net interest
revenue has grown, as a percentage of overall revenue, from 21% in 2012 to 42% in 2019.

With regard to our 2019 financial results, Stifel reported record revenue, net income, and earnings per share. Net revenue, which has increased
for the last 24 years, totaled slightly more than $3.3 billion, up 10%. Net income under generally accepted accounting principles (“GAAP”) was
$431 million, or $5.49 per diluted share. On a non-GAAP basis, our net income was $480 million, or $6.10 per diluted share. In addition, in
January 2020, we announced a 13% increase to our dividend on common shares, our third consecutive annual increase.

Please see the Year in Review section for more color on our 2019 results.

Executing Our Strategic Initiatives

Stifel’s Board of Directors, in collaboration with the executive management team, evaluates our strategy and corresponding priorities. Our Board
understands that our business is in a constant state of change and, therefore, recognizes the need to be agile and flexible as markets evolve.
Our overall strategy, which remains unchanged since I joined Stifel in 1997, is to be in a position to take advantage of opportunity as we endeavor
to be a premier wealth management and institutional services firm. In this way, in a little over two decades, we have built Stifel through organic
growth and strategic acquisitions from 733 associates to over 8,000 and from $110 million in revenue to over $3.3 billion.

Unique, at least in financial services, is our preference for preserving and enhancing the independent excellence of the firms that join us. We want
our brands to uphold the reputations they have dedicated themselves to cultivating. While we maximize operational efficiency by integrating risk,
settlement, and administrative services, our primary goal is always to better serve our clients, not simply add ornaments to the Stifel emblem.

The intersection of advice and technology continues to be a primary strategic focus for our Company – one requiring careful coordination of
investments in infrastructure, including in the cloud, along with training and recruiting. The result is a much more scalable and flexible way to
deliver services to clients. Using these new services, clients will be able to access banking and wealth management features from a unified user
experience. They will also be able to aggregate and analyze their portfolios, monitor their balance sheet, read custom news feeds, access our
research, and more. At the same time, we are improving our supporting and non-client-facing services, as key business areas across the firm
are now integrating big data and data analytics into their advice models. We have also invested in a differentiated trade execution facility that
can bridge human and machine interaction. Finally, a new enterprise CRM helps keep our institutional businesses connected across the globe.
Our clients and professionals will be uniquely connected to each other and to Stifel, making the firm’s excellent and differentiating service
available in more ways than ever.

We are also focused on providing our clients access to private companies. As market structure has changed, many growth companies are staying
private longer, making it difficult for the average investor to participate in their growth. Stifel aims to democratize private company investing through
our strategic alliance with OurCrowd, a global leader in crowd funding for startup growth companies.

Our most recent experience dealing with the business issues of COVID-19 has focused us on alternative ways to conduct business and collaborate
with clients and colleagues. Clearly, cloud-based solutions and teleconferencing are in some ways an enhancement, and in other ways a backstop,
for more traditional means of business. It is noteworthy that our Company processed significant business with up to 80% of our associates working
remotely. While this will not be the new normal, we can use what we have learned from this experience to be more productive and flexible in
the future.

We have not lost sight of the fact that 2020 is a presidential election year in the United States. The domestic political stakes are high as they relate
to the White House and Congress. It has been some time since this country has entered an election season in national crisis with our political parties
at two ends of the ideological spectrum. As a regulated business, Stifel will be greatly impacted by what happens this November. Suffice it to say,
we will be ready to respond to the opportunities or challenges presented by a post-election Washington.

The Importance of Culture and Diversity

I firmly believe that Stifel's enduring success is rooted in our culture. Our strategic vision would be nothing without the individual contributions
and commitment of our associates. Stifel is an entrepreneurial firm at heart, and we move forward when people at all levels are empowered to
find new and creative ways to succeed. This culture is one of our greatest assets, because advisors join the firm knowing that they can use Stifel’s
resources to serve their clients in their own innovative ways.

The lodestar in our culture has always been the Golden Rule. In practice, the Golden Rule asks us to go beyond
our own experiences and pay special attention to the way others want to be treated, because we cannot
assume that our preferences are all the same. Understanding the Golden Rule in this way demands that we
actively listen to and learn from others, and it means our culture must always be a work in progress.

We can do much better with regard to diversity among our associates in particular. The business case for this
effort is simple, as greater diversity – in all its forms – provides more opportunities to grow while reducing the
risks of blinkered, narrow-minded thinking. This applies to greater diversity in our community just as in our
revenue sources, business models, and geographic locations. More importantly, though, this is the only
fair and just path forward. Look again at the cover of this annual report, because it expresses an ideal that we
should strive for: There should be nothing about anyone’s birth or personal background that limits their ability
to contribute and compete at our firm. The benefits of moving toward this ideal will be unquantifiable, in the
best sense of the word, so I cannot stress enough that diversity doesn't need to earn its place in our ranks. We
need to work, and keep working, to earn its benefits.

ANNUAL REPORT 2019

Please take the time to read the diversity and inclusion message in this report because it expresses a major focus for Stifel, now and into the future.

Conclusion

The economy has been through many crises during my nearly four decades in this business. The lesson I’ve learned is that risk is omnipresent.
I often say that I am most anxious when things appear relatively calm and it is hard to predict the next crisis. Such was my anxiety in late 2019.
All seemed as if 2020 would be another record year. How quickly things change.

While we can learn from past crises and explain them all in retrospect, they will never feel normal – especially when they divert careers, delay life
choices, or upend lives altogether. We do not yet know what the bounds of this pandemic will be, but looking forward over the next few decades,
it is hardly prophetic to predict that there will be more disruptions to come. The world is not getting any simpler. In our business, we must be
fundamentally prepared for the unknown, and it is our job to help others do the same.

During my tenure at Stifel, continuing the 129-year traditions of the firm, we have developed the judgment to manage in uncertainty, rather than
trying to manage uncertainty itself. Our strategic vision has always centered on unexpected opportunity, which requires us to be poised to act
rationally and decisively – and do so when things seem least clear, which is where opportunity most frequently appears.

We guide our clients in the same way. As managers and advisors, we aim to make things more certain and predictable, to quantify risk and reward.
Yet we must also steel ourselves and our clients for true uncertainty, because that is where real risk and real opportunity always lie; it is where
downturns and crises are nurtured, but also where entrepreneurship reigns. While I would never predict the market here, I offer the following
as a token of faith: My prediction is that the next 100% move in the market will be up. Or, said another way, the Dow will achieve 40,000 before
the Dow goes to zero.

There will be a time when this pandemic is behind us, and markets will rebound as people take back to the skies and the streets to dine, travel,
and shop. Until then, we will use our strength to contribute to a better outcome for those more directly affected, as individuals and businesses,
nationally and locally. I am confident that the American people will get through this.

As always, we sincerely thank our shareholders and clients for their support, as well as our more than 8,000 associates for their commitment
to excellence.

23RONALD J. KRUSZEWSKIChairman of the Board and Chief Executive Officer March 26, 2020

YEAR IN REVIEW

In 2019, Stifel reported:

• Record net revenues of $3.3 billion, increased 10.3% compared with 2018.
• Record net revenues and pre-tax operating income in Global Wealth
Management.
• Record net revenues in Institutional Group.
• Record net income available to common shareholders of $431.1 million,
or $5.49 per diluted common share.
• Record non-GAAP net income available to common shareholders
of $479.6 million, or $6.10 per diluted common share.

For the year ended December 31, 2019, the Company reported net income
available to common shareholders of $431.1 million, or $5.49 per diluted common
share on record net revenues of $3.3 billion, compared with net income available
to common shareholders of $384.6 million, or $4.73 per diluted common share,
on net revenues of $3.0 billion for the comparable in 2018.

For the year ended December 31, 2019, the Company reported non-GAAP net
income available to common shareholders of $479.6 million, or $6.10 per diluted
common share. The Company’s reported GAAP net income for the year ended
December 31, 2019, was primarily impacted by merger-related expenses. Details
are discussed below and in the “Reconciliation of GAAP Net Income to Non-GAAP
Net Income” section.

We continuously strive to improve client service and invest in our future, and we
are also focused on improving our operational efficiency. Three years ago, we
articulated a strategy to identify costs, savings, and efficiencies, and to further
integrate our businesses. These steps have resulted in a meaningful improvement
in our non-GAAP performance metrics as compared to 2016, as our:

• Compensation ratio improved to 58.1% vs. 62.8%;
• Non-compensation expense ratio improved to 21.8% vs. 24.1%;
• Pre-tax margin improved to 19.9% vs. 13.1%; and
• Return on tangible equity improved to 24.6% vs. 15%.

..
%

10.

12.

16.

2019 RESULTS
(in thousands)

TOTAL FIRM
Total Revenues

Non-GAAP Net Income

Non-GAAP EPS

2019

$3,514,961

479,636

6.10

GLOBAL WEALTH MANAGEMENT
Net Revenues

2,130,559

Contribution

AUM

785,960

329,495,000

INSTITUTIONAL
Equity Net Revenues

Fixed Income Net Revenues

Net Revenues

Contribution

797,591

416,426

1,214,017

175,670

INSTITUTIONAL CLIENT SERVICES
Equity

166,577

Fixed Income

Total

INVESTMENT BANKING
Equity

Fixed Income

Total

Capital Raising

Advisory

255,969

422,546

599,748

217,673

817,421

369,442

447,979

(10)

1 1

21.

Percent represents the increase/(decrease) over prior year results.

A clear benefit of our improved financial metrics is the generation of significant cash flow. We remain focused on maximizing risk-adjusted returns
when deploying our capital, yet as a growth company, we believe that investing in our business to enhance our relevance to our clients is essential.
In 2019, these investments included six acquisitions and significant hiring of talented people to further expand our revenue base. Furthermore, we
continued to make essential investments in technology to improve the client experience as well as the efficiency of our associates.

Stifel has executed an acquisition strategy that has served the Company well over the last 15 years. These acquisitions have made Stifel more
relevant to our clients and expanded our foundation for growth while increasing shareholder value. In 2019, we saw the opportunity to expand on
this strategy with the acquisitions of First Empire Holding Corp., Mooreland Partners, B&F Capital Markets, Inc., and MainFirst Bank AG, as well as
the businesses of George K. Baum & Company and GMP Capital Inc.

In addition to focusing on acquisitions, strategic hiring, and investments in technology, we utilized the strength of our balance sheet to return
approximately $300 million to shareholders through dividends, net settlement of restricted stock units, and share repurchases. Today, there exists
a significant debate, primarily political in nature, about the appropriateness of share repurchases. We view share repurchases as an important
capital tool, yet understand the importance of buying back stock at a reasonable price. Said another way, share repurchases should add value to
remaining shareholders. Of course, we understand the policy discussion restricting share repurchases if a company needs government assistance.

Both of our operating segments performed very well. Global Wealth Management, which represents approximately two-thirds of our overall
revenue, achieved record revenue of $2.1 billion, an increase of 7% over 2018, and achieved record profitability. Our Institutional business also
achieved record revenue of $1.2 billion.

Our Private Client Group now consists of more than 2,200 financial advisors who serve clients from 382 offices across the country. We had a
strong year for financial advisor recruiting, opening 18 new Private Client Group offices and adding 150 financial advisors from a variety of firms.
Our Wealth Management business continues to benefit from growth and stability of revenue. As of the end of 2019, we managed approximately
$330 billion in client assets. The success of this group emanates from the entrepreneurial character of each of our financial advisors. As always,
our goal is to support them with the tools and resources they need to do what they do best: build strong relationships with clients to better define
and meet their financial goals.

As it relates to client communication and marketing, we continue to grow our technology and digital offerings to create a more efficient and
personalized experience for clients and advisors. We’ve ramped up efforts to provide our financial advisors with the most cutting-edge digital
marketing capabilities in the marketplace. We now have a suite of offerings that enable our advisors to better communicate with their clients
on social media platforms like Facebook and LinkedIn, as well as online with customized advisor websites.

Percent represents the increase/(decrease) over prior year results.

Stifel Bancorp ended the year with $16.9 billion in assets while maintaining a conservative risk profile. Stifel Bancorp’s credit metrics remained
solid, with a non-performing asset ratio of 0.09%, an improvement of five basis points from 2018. Our asset quality metrics compare very favorably
to the overall market and reflect our conservative approach. Firm-wide assets totaled $24.6 billion, and we ended the year with a Tier 1 leverage
ratio of 10.0% and a risk-based capital ratio of 17.6%.

Investment Banking revenues totaled $817 million in 2019. Capital-raising revenue totaled $369 million, while advisory revenue was $448 million,
up 21% from 2018.

On the advisory front, we completed over 130 M&A strategic advisory assignments. This number includes 18 transactions from our new colleagues
from Mooreland Partners, who joined the firm this year and solidified our foothold in European and technology advisory.

Noteworthy assignments include being the exclusive financial advisor to ESCO Technologies (NYSE: ESE) on the sale of its technical packaging
segment, TEQ, to Sonoco (NYSE: SON); advisor to the COFINA Senior Bond Coalition on the $17.6 billion debt restructuring of Puerto Rico’s bonds;
exclusive financial advisor to Electro Scientific Industries (Nasdaq: ESIO) on its $1.1 billion sale to MKS Instruments (Nasdaq: MKSI); financial and
restructuring advisor to Gymboree Group, a multi-brand children’s clothing retailer; and exclusive financial advisor and placement agent to Century
Casinos in its $385 million acquisition of three casino assets from Eldorado Resorts.

We would be remiss if we did not highlight KBW, which posted another exceptional year. In 2019, KBW advised on 10 of the top 15 bank mergers,
was the No. 1 bank IPO lead book-runner, and advised on the largest mutual to mutual insurance company merger in the past decade. KBW’s
specialized focus on the financial sector and long-standing client relationships helped fuel the best year for M&A advisory in its illustrious history.

With respect to equity capital raising, we completed 30 book-run IPOs and 84 book-run follow-ons in 2019. Our strength across key sectors,
including healthcare, technology, financials, and energy, continued with book-managed transactions for a number of clients, including the IPOs of
IGM Biosciences, an early-stage, oncology-focused biotech company; HBT Financial, a bank holding company that provides a comprehensive suite
of banking products and services to businesses, families, and local governments; DWF, the first IPO of a global legal business on the London Stock
Exchange; and Lyft, a $2.6 billion offering for a leading peer-to-peer marketplace for on-demand ridesharing. Equally impressive, we acted as sole
structuring advisor, initial purchaser, and placement agent for a $175 million private 144a offering of common stock by NetSTREIT, an internally
managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant commercial retail real estate leased on
a long-term, primarily triple-net basis.

Our Institutional Sales and Trading businesses posted revenue of $423 million, an increase of 14% over 2018. Fixed Income Brokerage was up
38%, buoyed by strategic positioning and our acquisition of First Empire.

Equity Brokerage was down 10% largely due to the implementation of the most significant regulatory change in the brokerage business in decades
(MiFID II). We are confident that the equity brokerage business will improve in 2020 as the significant regulatory headwinds subside.

The closing of the acquisitions of MainFirst in Europe and GMP in Canada in the fourth quarter of 2019 significantly bolstered our equity
capabilities. On a combined basis, Stifel is now the largest provider of research coverage in North America and Europe. A primary focus of the
division in 2020 is cross-selling the new products and capabilities to clients globally.

Stifel’s debt capital raising is anchored by our Public Finance business, which is driven by both geographic and sector diversification. For the sixth
consecutive year, Stifel led the nation in the number of municipal negotiated issues, serving as sole or senior manager for 803 transactions with a
total par value of nearly $16.3 billion. In addition, the acquisition of the business of George K. Baum expanded Stifel’s reach both in terms of
geographic coverage and growing specialty practices. The strength of Stifel’s combined integrated platform has also been demonstrated by
extremely strong secondary market activity during the recent municipal bond market dislocation, in which our municipal desks have cleared a
significant volume of trades with entities that do not conventionally participate in the market, allowing new investors to find opportunities and
allowing the market to clear tax-exempt fund outflows.

Looking forward, 2020 will be a year of uncertainty and increased volatility. The social and economic impact of COVID-19 is yet to be determined,
and we have a national election in November of this year. Yet, despite the uncertainty, we are confident in Stifel’s ability to successfully navigate
this environment.

As Ron notes, we are writing these letters during a time when the fear and anxiety caused by
the impact of the COVID-19 virus, both personal and professional, are palpable. Ron further
mentions that one of Stifel’s many strengths is the geographic and revenue diversity of our
operating model. As evidence of that fact, at the time of writing this letter, up to 80% of our
associates are working remotely.

We recognize that we need that same benefit of diversity when it comes to our associates
and have taken the initial steps to implement programs to accomplish that goal. In addition
to many business line-specific initiatives, we established the Stifel Women’s Initiative
Network (“WIN”) in 2018 and appointed a Head of Diversity & Inclusion in 2019.

During times of crisis that impact individuals and entire societies, such as the one we are
now facing, it is not the leadership or strength of a single individual that shines through, but
the collective strength of a group of individuals that eventually leads the way. Stars shine
brightest when it is darkest.

VICTOR J. NESI
Co-President

JAMES M. ZEMLYAK
Co-President

So it is at Stifel. What has become clear through this crisis is that Stifel is a collection of diverse, strong, caring, inclusive individuals, united in helping
each other and in serving our clients. As we continue to grow, our focus on diversity of all types will only make that culture of inclusiveness and
strength more resilient and impactful for the betterment of us all and our clients.

We have the privilege of leading these exceptional individuals on a daily basis. We thank you, our shareholders, and our associates for that privilege.

DIVERSITY AND INCLUSION

Given our ever-changing, increasingly interconnected
world, there is a strong business case for developing and
maintaining a diverse workforce. After all, having a mix
of perspectives, experiences, and ideas can lead to more
innovation and better decision-making. Studies have
shown that companies with diverse workforces often
deliver better financial results.

But that’s not the proper lens through which to view
diversity and inclusion. It’s not about numbers; it’s simply
the right thing to do.

Here at Stifel, we’ve built a culture that 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.

As a society, there is much work to be done. The gender
wage gap still exists. Racial inequality still exists. But as a
company, we are committed to working for change.

Take, for instance, our Women’s Initiative Network – or
WIN. Started organically by a small group of the firm’s
top female advisors, WIN has evolved into a company-
wide initiative designed to engage, equip, and empower
women to recognize their value, set goals, and reach
their potential in both their personal and professional
lives. Today, it includes every woman at Stifel, providing
networking and mentoring opportunities for women at
every stage of their careers at the firm.

Under the leadership of Crystal Schlegl and Carol DeNatale,
WIN has made tremendous strides. More broadly, it has
provided a framework for future initiatives to increase
diversity at Stifel by enabling everyone in the company to
thrive. One such initiative is the Stifel Diversity & Inclusion
Champions, a group of associates focused on outreach –
to employment candidates, to our associates, and to our
community – with the goal of helping make Stifel a firm
that truly reflects the diverse clients we serve. Carrie Kramer,
Head of Diversity & Inclusion, is spearheading this initiative
as well as a number of other programs in the coming year as
we continue to weave diversity and inclusion into the core
fabric of how we do business.

We also recently announced that Stifel will serve as a
2020 President’s Circle sponsor of the Financial Women’s
Association (FWA) of New York. The FWA is an organization
committed to developing future women leaders and
enhancing the role of women in finance, and this partnership
will bring even more opportunities for our female associates
to collaborate, network, and expand their skill sets while also
giving back to the community through mentoring.

We understand that correcting decades of inequity is not
something that can be achieved quickly. Nor is it something
that can be done through empty platitudes. It takes buy-in
and commitment. It also requires us to take a look in the
mirror and ask if we’re truly doing all we can. By developing
a culture of respect, where everyone is a valued contributor,
we will position Stifel to continue to grow, adapt, and
succeed.

CAROL DENATALE
Chief Operating Officer
Investment Banking

CRYSTAL SCHLEGL
First Vice President
Private Client Group

STIFEL DIVERSITY & INCLUSION CHAMPIONS

A MESSAGE FROM THE CEO

“While Stifel has long been the firm
of choice for successful women, it’s

clear to me that we need to do more.

Nurturing gender, racial, and

cultural diversity is imperative

to our future success.
This is a male-dominated industry, and

I am going to change that. I am committed to it.”

Ron Kruszewski
Chairman and CEO
Stifel Financial Corp.

7WEALTH MANAGEMENT

PRIVATE CLIENT GROUP

Stifel has grown to become one of the nation’s largest wealth management firms, ranking No. 7 in terms of number of
financial advisors.

At the heart of our success is a culture built on respect. Respect for our clients and the financial advisors who serve them.
To that end, we foster an entrepreneurial environment for our advisors, empowering them to do what’s best for their clients.
We also provide our advisors with the tools and support to deliver outstanding service and address even the most complex
client needs.

150

Financial Advisors
Joined Stifel
in 2019

New Private
Client Group
Offices

382

Private Client
Group Branches

$330

Billion
in Assets Under
Management

7th largest full-service investment firm in the

nation in number of financial advisors

RANK

FIRM

ADVISORS

Bank of America Merrill Lynch

Morgan Stanley Wealth Management

Wells Fargo Advisors

Raymond James

UBS

JPMorgan

Stifel

17,458

15,468

13,512

8,060

6,549

2,890

2,222

Source: SIFMA and publicly available information for U.S. brokerage networks. Includes investment banks only.

9
STIFEL BANK

ASSET MANAGEMENT

$17 Billion

in Assets

Providing investment management and services to
individuals and institutions and over a breadth of asset classes

STIFEL ASSET
MANAGEMENT AFFILIATES

Collaborates with Stifel financial advisors and
investment bankers to serve the broader needs
of clients

Delivers a full range of banking and lending services,

including mortgage lending, securities-based
lending, and private banking services

Offers sponsor finance, venture banking and

lending, and fund banking services to private
equity and venture capital investors and their
portfolio companies, often in conjunction with
additional services through Stifel’s investment
banking and wealth management professionals,

among others

Provides corporate lending and treasury

management services with a focus on middle-
market companies, often in collaboration with

the firm’s broad institutional capabilities for the

middle market

STIFEL TRUST

$4.3 Billion

in Assets Under Administration

Offers integrated trust services, including

corporate successor trustee appointments,
charitable and special needs trusts, and Delaware
trust services

Launched donor-advised funds and legacy funds
to further the planning and philanthropic needs of
our wealth management clients

TOTAL ASSETS
UNDER MANAGEMENT*

$16 Billion

in Assets Under Management

$8 Billion

in Assets Under Advisement

* Total assets under management, excluding private equity funds
discussed herein that are direct or indirect subsidiaries of Stifel.

INVESTMENT BANKING

Stifel is the industry’s preeminent middle-market
investment bank. Stifel advises on mergers and
acquisitions and raising public and private debt and
equity through our corporate clients as well as through
our dedicated financial sponsors and venture capital
effort, maintaining regular dialogue and transaction
flow with corporations and private equity firms focused
on Stifel’s core industry groups.

The combination of a full-service product offering
and the deep domain expertise of our more than
600 bankers empowers us to provide solutions for
our clients’ evolving needs.

SINCE 2010, IN THE MIDDLE MARKET,
STIFEL INVESTMENT BANKING IS …

Equity Deals Under $1 Billion1

in Total Number of Bookrun
Equity Deals Under $1 Billion1

No. 1 in Total Number of Managed
No. 2
No. 1
No. 1

in Total Number of M&A
Deals Under $1 Billion3

in Total Number of Preferred
& Baby Bonds Under $200 Million2

GEOGRAPHIC
EXPANSION

Extended our global reach into Canada, China, France, Germany, Israel,
Italy, Japan, and Korea.

SECTOR GROWTH

Expanded sector coverage for Business Services, Cannabis, and Media &
Telecom, and doubled the size of the firm’s Global Technology Group.

INCREASED SPONSOR
COVERAGE

Tripled the size of our Sponsor Coverage Group, completing more than
100 sell-side transactions.

$125B+

Completed
Transactions

235+

Executed Debt
and Equity
Offerings

IN 2019

110+

Executed Offerings
Serving as
Bookrunner

130+

M&A Strategic
Advisory
Assignments

Source: Dealogic
1 Rank-eligible SEC-registered IPOs and follow-on offerings
2 Excludes closed-end funds and trust preferreds
3 M&A Analytics

OUR CAPABILITIES:

ADVISORY

M&A
Activism
Restructuring

EQUITY CAPITAL MARKETS
Initial Public Offerings
Follow-Ons/Blocks/Buybacks
144A/Private Placements
Convertible Notes/Preferreds/SPACs

DEBT CAPITAL MARKETS

Investment Grade
Leveraged Finance
Private Placements

A full-service boutique investment bank and broker-dealer specializing in the financial services sector

A Stifel Company

Advised on
10 of the
Top 15
bank mergers
in 20191

Ranked No. 1
bank IPO
lead bookrunner2

Advised on the
largest
mutual to mutual
insurance
company merger
in the past decade3

Achieved
record M&A
revenue

Ranked No. 1
FIG Equity Sales Force,
FIG Equity Trading Desk,
and U.S. SMID Bank
Research by
Greenwich Associates

A leading investment bank specializing in corporate restructuring and recapitalization

THE M&A ADVISOR DEALS OF THE YEAR

Restructuring
Deal
of the Year
($10 billion or more)
COFINA

Distressed M&A
Deal of the Year
($50 million
to $75 million)
Acquisition of B&G
Crane Services
by Maxim Crane

Distressed M&A
Deal of the Year
($10 million
to $25 million)
Sale of select Things
Remembered Stores

TURNAROUND ATLAS
AWARDS OF THE YEAR

Mega
Restructuring
Deal of the Year
COFINA

One of the world's largest fund placement agents and advisory providers

A Stifel Company

Raised
$100+ billion
across more than
140 highly differentiated
alternative investment
funds and offerings
since 1983

Served as
exclusive
advisor and
placement agent
on the restructuring of
Spirit Music Group
and its portfolio of 200+
Billboard hits

Met or exceeded
hard caps for
70% of funds
in 2019 – despite
volatile market
conditions

Grew our network
of investors
to include more of the
world’s largest pension
funds, asset managers,
endowments,
foundations, and
family offices

1 Source: S&P Global Market Intelligence
2 Source: Dealogic
3 Source: S&P Global Market Intelligence

INSTITUTIONAL SERVICES

EQUITY RESEARCH

Stifel’s breadth and quality of equity research are unparalleled. We lead the industry with the largest equity research platform
in the U.S. and have the 8th largest global platform. The quality of our research has been consistently recognized, with 13
consecutive top 10 finishes in the StarMine Analyst Awards.

Our unwavering focus is to help our clients make the best investment decisions possible. Our analysts are at the heart of our
research, averaging more than two decades of experience – many of whom have hands-on experience in the industries they
cover. This continuity and experience enable proprietary and differentiated insights that drive better research and better results
for our clients and advisors.

THIRTEEN
consecutive
top ten finishes
in the StarMine
Analyst Awards,
with No. 1 rankings
in 2016 and 2017 and
Top 3 rankings
in 2010, 2011, 2012,
2013, 2014, and 2018

UNITED STATES

• Largest U.S. equity research platform
• Largest U.S. provider of small and
mid cap research

TOP FIVE PROVIDER OF U.S.
EQUITY COVERAGE IN:

· Banks
· Capital Markets
· Commercial Services & Support
· Construction & Engineering
· Healthcare Equipment
· Information Technology
· Insurance
· Machinery
· Oil & Gas Consumable Fuels
· Real Estate

GLOBAL

No. 1

Broker
North American
Non-Deal
Roadshows

Most-Used Brokers by
North American Companies
1 Stifel
2 Bank of America Merrill Lynch
2 Barclays Capital
4 Royal Bank of Canada
5 JP Morgan Chase
6 Citi
6 Jefferies
6 Wells Fargo
9 UBS
10 Morgan Stanley
10 Raymond James

Survey of 456 Investor Relations Officers
Source: IR Magazine Global Roadshow Report 2019

TIED

EXTEL AWARDS

No. 1 Germany
Country Research

No. 1 Germany
Leading Brokerage Firm

No. 1 Switzerland
SMID Research

No. 2 Switzerland
Country Research

No. 2 Switzerland
Leading Brokerage Firm

No. 3 Germany
SMID Research

No. 5 France
Leading Brokerage Firm

No. 5 Pan-European Brokerage
Firm for Research – UK SMID

TOP FIVE PROVIDER OF GLOBAL
EQUITY COVERAGE IN:

MORE THAN 2,100 STOCKS
UNDER COVERAGE

· Banks
· Capital Markets
· Commercial Services & Support
· Construction & Engineering
· Energy Equipment
· Healthcare Equipment
· Information Technology
· Insurance
· Machinery
· Materials
· Oil & Gas Consumable Fuels
· Real Estate

159 ANALYSTS
ACROSS 15 SECTORS

· Largest provider of coverage
across North America and
Europe

· Largest global provider
of small cap and mid cap
coverage

· Largest global provider
of coverage in financials,
industrials, energy, and
information technology

Source: StarMine, 12/31/19
Includes firms acquired by Stifel. See www.stifel.com/research for more information on the StarMine Analyst Awards.

INSTITUTIONAL SALES AND TRADING

FIXED INCOME

EQUITIES

80+ traders with annual client trade volume
of more than $475 billion1,2

Third largest U.S. equity trading platform3

Traded more than 6.7 billion shares in 2019

60+-member Fixed Income Research and

(Stifel and KBW combined)

Relationships with more than 3,500
institutional accounts globally

Active daily market-maker in more than
4,000 stocks

Major liquidity provider to largest equity
money management complexes

Multi-execution venues: high-touch,

algorithms, program trading, and options
trading

Dedicated convertible sales, trading, and
research desk

Active equity trading desks in the U.S.,
Canada, London, and Europe

Strategy Group

220+-person fixed income institutional

sales force

40+ institutional fixed income offices

nationwide

Offices in Geneva, London, Madrid, and Zurich

INSTITUTIONAL INVESTOR
ALL-AMERICA RESEARCH RANKINGS

Ranked No. 8 among all U.S. firms with

recognition in five analyst fields

Ranked No. 5 in Investment Grade,

No. 8 in High Yield

GREENWICH ASSOCIATES 2019 STUDY RESULTS*

Investment Grade: No. 1 in Market

Penetration and Forward Momentum

High Yield: No. 1 in Service, Market Share,

and Forward Momentum

1 As of 12/31/19 2 Trailing 12 months, 12/31/19 3 Among non-bulge bracket firms

PUBLIC FINANCE
PUBLIC FINANCE

TOP-RANKED PUBLIC
FINANCE PLATFORM
• No. 1-ranked senior manager
of negotiated municipal bond

issues

• Funding capital projects and
supporting governmental and
not-for-profit clients

BROAD GEOGRAPHIC AND
SECTOR COVERAGE
• 270 public finance associates

in 36 offices

• Broad diversity of experience and
depth of resources to best serve
our clients

• Dedicated quantitative resources
and sector groups

STIFEL’S NATIONAL
SCHOLARSHIP
COMPETITION

Awards $2,000 scholarships
to 50 high school seniors who
compose essays reflecting on their
challenges and accomplishments.

No. 1 by Par Amount in

K-12, Land Secured,
National Development, and
Tax Increment

No. 1 by Par Amount in

Indiana, Michigan, and Missouri

No. 1 by Number of Issues in

Bank Qualified, Multifamily Housing,
Tax Increment Financing

Arizona, California, Illinois, Indiana,
Michigan, and Ohio

Note: State rankings include George K. Baum issues prior to acquisition.

RANK

FIRM

# OF
ISSUES

MARKET
SHARE

PAR AMOUNT
(MILLIONS)

Stifel

RBC

Raymond James

Piper Sandler

D.A. Davidson

Robert W. Baird

Bank of America Merrill Lynch

Citi

JPMorgan

Morgan Stanley

Source: Thomson Reuters SDC

803

619

450

413

368

340

326

311

250

232

11.8%

$16,263.4

9.1

6.6

6.1

5.4

5.0

4.8

4.6

3.7

3.4

24,831.9

11,874.3

11,034.7

4,708.0

4,713.2

45,312.0

35,520.8

24,919.4

28,868.0

Stifel delivers a full-service investment bank to
companies and investors in the middle market
across Europe. Stifel Europe is based in London,
with offices in Frankfurt, Geneva, Madrid, Milan,
Munich, Paris, and Zurich. In our chosen sectors,
Stifel Europe offers advice across the capital
structure, connecting growing companies with
investors who are willing and able to support
their expansion.

Stifel Europe successfully executed a total
of 26 equity capital markets deals across the
London markets in 2019, representing a
near 10% market share.

According to data from ECM Insight, Stifel Europe
ranked second among all investment banks, as
measured by volume of UK deals, up from No. 4
in 2018.

Stifel Europe raised more than 1.3 billion pounds
for clients in 2019. Notable transactions include
a secondary share placing for Diversified Gas & Oil
PLC (AIM: DGOC), which ranked as the year’s third
largest fundraise on the Alternative Investment
Market, and the initial public offering of DWF
Group PLC (LON: DWF), the largest UK law firm
to ever go public.

The firm has now participated in 176 transactions
that have raised more than 33 billion pounds
for clients in Europe since entering the London
market in mid-2014. We maintain market-leading
positions in several European sectors, including
real estate, investment funds, oil & gas, and
technology, along with powerful trans-Atlantic
franchises in healthcare and in financial services
through KBW.

Thanks to our acquisition of MainFirst Bank AG,
our pan-European platform is now equipped to
deliver superior capabilities and meaningful reach
across the continent, with our combined business
offering equity research coverage of more than
700 European companies. Our MainFirst platform
allows us to offer European execution services
to clients regardless of the outcome of Brexit
negotiations.

STIFEL EUROPE

Completed the acquisition of MainFirst Bank AG

Grew to more than 500 professionals

Won five awards in StarMine’s Europe
and United Kingdom/Ireland rankings

Ranked

• No. 1 in Germany*
• No. 2 in Switzerland*
• No. 5 Overall UK Research (up from 11)
• No. 6 Overall Brokerage (up from 10)

in the Extel 2019 UK Small and
Mid Caps Survey

and

• No. 2 in Banks by volume and No. 6 by value
• No. 3 in Financial Advisers by volume
and No. 5 by value
• No. 5 in Banks in the Alternative Investment
Market by volume and No. 6 by value

in the London markets by
ECM Insight

*Rankings pertain to MainFirst Bank AG, acquired by
Stifel in November 2019

Source: ECMi Report 2019

BOARD OF DIRECTORS

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

Adam T. Berlew
Executive Director of Americas Marketing
Google Cloud

Kathleen Brown
Partner
Manatt, Phelps & Phillips, LLP

Michael W. Brown
Former Vice President and
Chief Financial Officer
Microsoft Corporation

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

Robert E. Grady
Partner
Gryphon Investors
Lead Independent Director

Daniel J. Luedeman, Sr.
President and CEO
Concordance Academy of Leadership

Maura A. Markus
Former President and Chief Operating Officer
Bank of the West

James M. Oates
Chairman
Hudson Castle Group, Inc.

David A. Peacock
President and Chief Operating Officer
Schnuck Markets, Inc.

Thomas W. Weisel
Senior Managing Director

Michael J. Zimmerman
Vice Chairman
Continental Grain Company

Photo credit: NYSE

SHAREHOLDER INFORMATION

ANNUAL MEETING
The current public health and travel situation may make it difficult for some shareholders to make plans to attend an in-person
meeting. For this reason, our 2020 Annual Meeting of Shareholders will be virtual-only, Friday, May 15, 2020, at 9:30 a.m.
Central. For instructions on how to access, vote, and submit questions at the virtual meeting, please refer to page 2 of our
proxy statement distributed on April 3, 2020.

TRANSFER AGENT

The transfer agent and registrar for Stifel Financial Corp. is Computershare Trust Company, N.A., Canton, Massachusetts.

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 last two
calendar years are as follows:

SALES PRICE

2018

2019

High

Low

High

Low

CASH DIVIDENDS

2018

2019

First Quarter

68.76

56.36

57.03

39.80

0.12

0.15

Second Quarter

Third Quarter

Fourth Quarter

61.93

57.14

53.23

52.21

51.01

38.39

59.93

61.94

63.52

52.90

50. 75

49.63

0.12

0.15

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
A reconciliation of GAAP Net Income to Non-GAAP Net Income and GAAP Net Income Per Diluted Common Share, the most
directly comparable measure under GAAP, to Non-GAAP Earnings Per Diluted Common Share is included in the table below.

(in thousands, except per share amounts)

2015

2016

2017

2018

2019

GAAP net income

Preferred dividends

$92,336

$81,520

$182,871

$393,968 $448,396

—

3,906

9,375

17,319

GAAP net income available to common shareholders

92,336

77,614

173,496

384,593

431,077

Tax reform, net of tax

Litigation charges, net of tax

Acquisition revenues, net of tax

Acquisition charges, net of tax

Compensation

Other non-compensation

U.S. tax benefit 1

Non-GAAP net income

GAAP earnings per diluted common share

Adjustments

Non-GAAP earnings per diluted common share

—

2,367

2,681

38,356

16,193

—

63,718

41,692

—

85,426

22,667

1,251

21,766

14,930

3,847

—

5,251

—

132

13,400

26,179

24,288

24,139

—

$149,252

$185,705

$323,383

$429,442 $479,636

$1.18

0.72

$1.90

$1.00

1.39

$2.39

$2.14

1.85

$3.99

$4.73

0.55

$5.28

$5.49

0.61

$6.10

1 U.S. tax benefit in connection with the favorable impact of the adoption of new accounting guidance associated with stock-based compensation and the revaluation
of the Company’s deferred tax assets as a result of the enacted tax legislation in 2017.

STIFEL LOCATIONS

More than

400

global
offices

Approximately

8,000

Associates

Public Finance
Private Client Group
Investment Banking
Institutional Sales Offices
(Equity & Fixed Income)

Stifel Financial Corp. | www.stifel.com
One Financial Plaza | 501 North Broadway | St. Louis, Missouri 63102