-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Km95eayo5r+fryqxRTyXk4M1SOJ5S6+3QmOW919LTx9pr0tDDUJCwMt5d/HYT2zE qPi5rKT0wcg9uLaSJsXm8A== 0000720672-00-000009.txt : 20000510 0000720672-00-000009.hdr.sgml : 20000510 ACCESSION NUMBER: 0000720672-00-000009 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000330 DATE AS OF CHANGE: 20000509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STIFEL FINANCIAL CORP CENTRAL INDEX KEY: 0000720672 STANDARD INDUSTRIAL CLASSIFICATION: 6211 IRS NUMBER: 431273600 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-09305 FILM NUMBER: 589746 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL PLAZA STREET 2: 501 N BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 BUSINESS PHONE: 3143422000 MAIL ADDRESS: STREET 1: ONE FINANCIAL PLAZA STREET 2: 501 N BROADWAY CITY: ST. LOUIS STATE: MO ZIP: 63102-2102 10-K405 1 FORM 10-K; DECEMBER 31, 1999 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [x] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1999 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to . Commission file number 1-9305 STIFEL FINANCIAL CORP. ----------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 43-1273600 - - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 501 N. Broadway St. Louis, Missouri 63102-2102 - - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number,including area code 314-342-2000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange Title of Each Class On Which Registered - - -------------------------------------- ---------------------------- Common Stock, Par Value $.15 per share New York Stock Exchange Chicago Stock Exchange Preferred Stock Purchase Rights New York Stock Exchange Chicago Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report) and (2) has been subject to such filing requirements for the past 90 days. Yes[x] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K [x] 2 Aggregate market value of voting stock held by non-affiliates of the registrant at March 8, 2000 was $74,709,865. Shares of Common Stock outstanding at March 8, 2000: 7,254,247 shares, par value $.15 per share. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Report to Stockholders for the year ended December 31, 1999 are incorporated by reference in Part II hereof. Portions of the Company's Proxy Statement filed with the SEC in connection with the Company's Annual Meeting of Stockholders to be held April 26, 2000 are incorporated by reference in Part III hereof. Exhibit Index located on pages 22 and 23. 3 PART I ITEM 1. BUSINESS Stifel Financial Corp. ("Financial" or the "Company"), a Delaware corporation and a holding company for Stifel Nicolaus & Company, Incorporated ("Stifel Nicolaus") and other subsidiaries, was organized in 1983. Stifel Nicolaus is the successor to a partnership founded in 1890. Unless the context requires otherwise, the term "Company" as used herein means Financial and its subsidiaries. On January 12, 2000, the Company completed the merger of Hanifen, Imhoff Inc. ("HII"), a Denver-based investment banking firm. The transaction is being accounted for as a purchase and provides for a tax-free exchange of approximately 517,000 shares of the Company for all of the outstanding shares of HII. In connection with the transaction, certain key associates of HII executed employment agreements containing non-compete provisions and restrictions on the sale of the stock received in the merger and were awarded options in the Company. HII also has offices located in Omaha, Nebraska and Winter Park, Florida. The merger added 59 investment bankers, research analysts, institutional sales associates, and traders to the capital markets segment, as well as 23 administrative and technical support associates. The Company offers securities-related financial services through its wholly-owned operating subsidiaries, Stifel Nicolaus, Century Securities Associates, Inc., and Pin Oak Capital, Ltd. These subsidiaries provide brokerage, trading, investment banking, investment advisory, and related financial services primarily to customers throughout the United States from 63 locations. The Company's customers include individuals, corporations, municipalities and institutions. Although the Company has customers throughout the United States, its major geographic area of concentration is in the Midwest. Financial Information The amounts of each of the principal sources of revenue, the net income and total assets of the Company for the years ended December 31, 1999, 1998 and 1997 are contained in Item 6. Selected Financial Data, herein. Financial Information for each segment of the Company is contained in Note O of the Consolidated Financial Statements incorporated by reference herein. Narrative Description of Business As of February 29, 2000, the Company employed 1,004 individuals. Stifel Nicolaus employed 986 of which 335 were employed as investment executives. In addition, 143 investment executives were affiliated with Century Securities Associates, Inc. ("CSA") as independent contractors. Through its broker-dealer subsidiaries, the Company provides securities services to approximately 125,000 client accounts. No single client accounts for a material percentage of the Company's total business. 4 Private Client The Company provides securities transaction and financial planning services to its private clients through Stifel Nicolaus' branch system and its independent contractor firm, CSA. In 1998 and 1999 management made significant investments in personnel, technology, and market data platforms to grow the private client segment. Stifel Nicolaus Private Client Stifel Nicolaus has 59 private client branches located in 14 states, primarily in the Midwest. Its 335 Investment Executives provide a broad range of services and financial products to their clients. In most cases Stifel Nicolaus charges commissions on both stock exchange and over-the-counter transactions, in accordance with Stifel Nicolaus' commission schedule. In certain cases, varying discounts from the schedule are granted. In addition, Stifel Nicolaus distributes both taxable and tax exempt fixed-income products to its private clients, including municipal, corporate, government agency and mortgage backed bonds, preferred stock, and unit investment trusts. An increasing number of clients are electing asset based fee alternatives to the traditional commission schedule. In addition, Stifel Nicolaus distributes insurance and annuity products, and investment company shares. Stifel Nicolaus has dealer-sales agreements with numerous distributors of investment company shares. These agreements generally provide for dealer discounts ranging up to 5.75 percent of the purchase price, depending upon the size of the transaction. Century Securities Associates Inc. Private Client CSA has affiliations with 143 independent contractors in 23 branch offices and 98 satellite offices in 29 states. Under their contractual arrangements, these independent contractors may provide accounting services, real estate brokerage, insurance, or other business activities for their own account. However, all securities transactions must be transacted through CSA. CSA's independent contractors provide the same types of financial products and services to its private clients, as does Stifel Nicolaus. Independent contractors are responsible for all of their direct costs and are paid a larger percentage of commissions to compensate them for their added expenses. CSA is an introducing broker-dealer and as such clears its transactions through Stifel Nicolaus. Client transactions in securities for Stifel Nicolaus and CSA are effected on either a cash basis or margin basis. The customer deposits less than the full cost of the security when securities are purchased on a margin basis. The Company makes a loan for the balance of the purchase price. Such loans are collateralized by the securities purchased. The amounts of the loans are subject to the margin requirements of Regulation T of the Board of Governors of the Federal Reserve System, New York Stock Exchange, Inc. ("NYSE") margin requirements, and the Company's internal policies, which usually are more restrictive than Regulation T or NYSE requirements. In permitting customers to purchase securities on margin, the Company is subject to the risk of a market decline, which could reduce the value of its collateral below the amount of the customers' indebtedness. 5 Capital Markets Capital markets include investment banking, corporate finance and public finance departments, research department, syndicate department, over-the-counter equity trading, and institutional sales and trading. Investment Banking - Corporate Finance The investment banking corporate finance group consists of 24 professionals, located in St. Louis, Cleveland, and Denver, and is involved in public and private equity and preferred underwritings for corporate clients, merger and acquisition advisory services, fairness opinions, and evaluations. Stifel Nicolaus focuses on small and mid-cap companies, located primarily in the Midwest. Research Department The research department consists of 17 analysts located in St. Louis and Denver who publish research on over 175 companies. Proprietary research reports are provided to private and institutional clients at no charge and are supplemented by research purchased from outside vendors. Syndicate Department The syndicate department coordinates the marketing, distribution, pricing, and stabilization of the Company's lead- and co-managed underwritings. In addition, the syndicate department coordinates the firm's syndicate and selling group activities managed by other investment banking firms. Over-the-Counter Equity Trading The Company trades as principal in the over-the-counter market. It acts as both principal and agent to facilitate the execution of customers' orders. The Company makes a market in various securities of interest to its customers through buying, selling and maintaining an inventory of these securities. At February 29, 2000, Stifel Nicolaus made a market in 213 equity issues in the over-the-counter market. The Company does not engage in a significant amount of trading for its own account. Institutional Sales Institutional sales is comprised of institutional equity sales, fixed income sales, and taxable and tax-exempt trading departments located in St. Louis and Denver. The institutional equity sales group provides equity products to its institutional accounts in both the primary and secondary markets. Primary equity issues are generally underwritten by Stifel Nicolaus' investment banking corporate finance group. At February 29, 2000, the institutional equity sales department maintained relationships with over 1,070 institutional accounts. Stifel Nicolaus buys fixed income products, both tax-exempt and taxable products, primarily municipal bonds, corporate, government agency, and mortgage back bonds for its own account, maintains an inventory of these products and resells from that inventory to its institutional accounts. The institutional fixed income sales group maintained relationships with over 1,500 accounts at February 29, 2000. 6 Investment Banking-Public Finance Investment banking public finance consists of 25 professionals with its principal offices in St. Louis and Denver. Stifel Nicolaus acts as an underwriter and dealer in bonds issued by states, cities, and other political subdivisions and may act as manager or participant in offerings managed by other firms. The majority of the Company's municipal bond underwritings are originated through its St. Louis and Denver offices. Other Segments In addition to its private client segment and capital markets segment, the Company has an investment advisory firm which provides investment advisory services to individuals, fiduciary, and corporate clients. Revenues are derived based upon assets under management. Pin Oak Capital, Ltd. is registered as an investment advisor in five states and had assets under management of approximately $176,442,000 at December 31, 1999. Stifel Nicolaus clears transactions for the Company's independent contractor, CSA, and two other introducing broker-dealers. Revenues and costs associated with clearing these transactions are also included in "other segments." Competition The Company competes with other securities firms, some of which offer their customers a broader range of brokerage services, have substantially greater resources, and may have greater operating efficiencies. In addition, the Company faces increasing competition from other financial institutions, such as commercial banks, online service providers, and other companies offering financial services. The Financial Modernization Act, signed into law in late 1999, lifts restrictions on banks and insurance companies to provide financial services once dominated by securities firms. In addition, recent consolidation in the financial services industry may lead to increased competition from larger, more diversified organizations. Some of these firms generally charge lower commission rates to their customers without offering services such as portfolio valuation, investment recommendations and research. Trading on the Internet has increased significantly. Online brokerage customers account for more than one-third of trading in U.S. equities. The number of online accounts doubled in 1999 and is expected to quadruple in the next three years. During 1999 the Company continued to invest in and provide support for technologically advanced equipment and software for the Private Client Group, including web-based access to customer accounts and development of online trading to be launched in early 2000. Management relies on the expertise acquired in its market area over its 109-year history, its personnel, and its equity capital to operate in the competitive environment. 7 Regulation The securities industry in the United States is subject to extensive regulation under federal and state laws. The Securities and Exchange Commission ("SEC") is the federal agency charged with the administration of the federal securities laws. Much of the regulation of broker-dealers, however, has been delegated to self-regulatory organizations, principally the National Association of Securities Dealers, Inc., the Municipal Securities Rulemaking Board, and the national securities exchanges, such as the NYSE. These self-regulatory organizations adopt rules (which are subject to approval by the SEC) which govern the industry and conduct periodic examinations of member broker-dealers. Securities firms are also subject to regulation by state securities commissions in the states in which they are registered. The regulations to which broker-dealers are subject cover all aspects of the securities business, including sales practices, trade practices among broker-dealers, capital structure of securities firms, record keeping, and the conduct of directors, officers and employees. Additional legislation, changes in rules promulgated by the SEC and by self-regulatory organizations, and changes in the interpretation or enforcement of existing laws and rules often directly affect the method of operation and profitability of broker-dealers. The SEC and the self-regulatory organizations may conduct administrative proceedings, which can result in censures, fines, suspension or expulsion of a broker- dealer, its officers or employees. The principal purpose of regulation and discipline of broker-dealers is the protection of customers and the securities markets rather than the protection of creditors and stockholders of broker-dealers. As a broker-dealer and member of the NYSE, Stifel Nicolaus is subject to the Uniform Net Capital Rule (Rule 15c3-1) promulgated by the SEC, which provides that a broker-dealer doing business with the public shall not permit its aggregate indebtedness (as defined) to exceed 15 times its net capital (as defined) or, alternatively, that its net capital shall not be less than two percent of aggregate debit balances (primarily receivables from customers and broker-dealers) computed in accordance with the SEC's Customer Protection Rule (Rule 15c3-3). The Uniform Net Capital Rule is designed to measure the general financial integrity and liquidity of a broker-dealer and the minimum net capital deemed necessary to meet the broker-dealer's continuing commitments to its customers and other broker-dealers. Both methods allow broker-dealers to increase their commitments to customers only to the extent their net capital is deemed adequate to support an increase. Management believes that the alternative method, which is utilized by most full-service securities firms, is more directly related to the level of customer business. Therefore, Stifel Nicolaus computes its net capital under the alternative method. 8 Under SEC rules, a broker-dealer may be required to reduce its business and restrict withdrawal of subordinated capital if its net capital is less than four percent of aggregate debit balances and may be prohibited from expanding its business and declaring cash dividends if its net capital is less than five percent of aggregate debit balances. A broker-dealer that fails to comply with the Uniform Net Capital Rule may be subject to disciplinary actions by the SEC and self-regulatory agencies, such as the NYSE, including censures, fines, suspension, or expulsion. In computing net capital, various adjustments are made to net worth to exclude assets which are not readily convertible into cash and to state conservatively the other assets such as a firm's position in securities. Compliance with the Uniform Net Capital Rule may limit those operations of a firm such as Stifel Nicolaus which requires the use of its capital for purposes of maintaining the inventory required for a firm trading in securities, underwriting securities, and financing customer margin account balances. Stifel Nicolaus had net capital of approximately $31.9 million at December 31, 1999, which was approximately 8.98 percent of aggregate debit balances and approximately $24.8 million in excess of required net capital. ITEM 2. PROPERTIES The headquarters and administrative offices of the Company, Stifel Nicolaus and CSA are located in downtown Saint Louis, Missouri. Pin Oak is located in New York, New York. Stifel Nicolaus has a branch office system located in 14 states, primarily in the Midwest. The Company has a total of 63 locations in 17 states. All offices of the Company are located in leased premises. The Company's management believes that at the present time the facilities are suitable and adequate to meet its needs and that such facilities have sufficient productive capacity and are appropriately utilized. The Company also leases communication and other equipment. Aggregate annual rental expense, for office space and equipment, for the year ended December 31, 1999 was approximately $4,728,000. Further information about the lease obligations of the Company is provided in Note D of the Notes To Consolidated Financial Statements incorporated by reference herein. 9 ITEM 3. LEGAL PROCEEDINGS The Company is a defendant in several lawsuits relating principally to its securities business. Some of these lawsuits and arbitrations claim substantial amounts, including punitive damages. One such claim involves a lawsuit filed on October 5, 1995 by The Oklahoma Turnpike Authority ("OTA") in the District Court of Oklahoma County, State of Oklahoma, along with DeWayne VonFeldt and Robert Cochran, two former employees of the Company; Sakura Global Capital and Steven Strauss; Pacific Matrix and Jeff Feld. The OTA suit seeks $6.5 million in compensatory damages and an unspecified amount of punitive damages. The OTA suit alleges that an undisclosed fee paid to the Company by a third party for the placement of a forward purchase contract in an advance refunding escrow for the proceeds of the 1992 OTA $608 million municipal bond refinancing should have been paid to the OTA. Although the ultimate outcome of this and other actions cannot be ascertained at this time, management, based on its understanding of the facts and after consultation with outside counsel, does not believe the ultimate resolution of these matters will have a materially adverse effect on the Company's consolidated financial condition and results of operations. However, depending upon the period of resolution, such effects could be material to the financial results of an individual operating period. It is reasonably possible that certain of these lawsuits and arbitrations could be resolved in the next year, and management does not believe such resolutions will result in losses materially in excess of the amounts previously provided. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None 10 ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT The following information is furnished pursuant to General Instruction G (3) of Form 10-K with respect to the executive officers of Financial: Year First Appointed as Positions or Offices Executive Officer Name Age with the Company of the Company - - -------------------------------------------------------------------------------- George H. Walker III 69 Chairman of the Board of 1978 Financial and Stifel Nicolaus Ronald J. Kruszewski 41 President and Chief Executive Officer 1997 of Financial and Stifel Nicolaus James M. Zemlyak 40 Vice President, Treasurer and 1999 Chief Financial Officer of Financial and Senior Vice President and Chief Financial Officer of Stifel Nicolaus Charles R. Hartman 56 Vice President and Secretary of 1996 Financial and General Counsel, Senior Vice President and Secretary of Stifel Nicolaus Scott B. McCuaig 50 Vice President of Financial and 1998 Director of Retail Sales & Marketing of Stifel Nicolaus Walter F. Imhoff 68 Managing Director of Stifel Nicolaus 1998 The following are brief summaries of the business experience during the past five years of each of the executive officers of the Company. George H. Walker III joined Stifel Nicolaus in 1976, became Chief Executive Officer of Stifel Nicolaus in December 1978, and became Chairman of Stifel Nicolaus in July 1982. From the time of the organization of Financial, Mr. Walker has served as its Chairman of the Board and, until October 26, 1992, Mr. Walker served as its President and Chief Executive Officer. Ronald J. Kruszewski was appointed President and Chief Executive Officer of the Company and Stifel Nicolaus in September 1997. Prior to joining the Company, Mr. Kruszewski served as Managing Director and Chief Financial Officer of Baird Financial Corporation and Managing Director of Robert W. Baird & Co. Incorporated. James M. Zemlyak joined Stifel Nicolaus in February 1999. He is Vice President, Treasurer and Chief Financial Officer of Financial and Senior Vice President and Chief Financial Officer of Stifel Nicolaus and a member of the Board of Directors of Stifel Nicolaus. Prior to joining the Company, Mr. Zemlyak served as Managing Director and Chief Financial Officer of Baird Financial Corporation from 1997 to 1999 and Senior Vice President and Chief Financial Officer of Robert W. Baird & Co. Incorporated from 1994 to 1997. 11 Charles R. Hartman joined Stifel Nicolaus in June 1994. He is Vice President and Secretary of Financial and General Counsel, Senior Vice President and Secretary of Stifel Nicolaus. Prior to joining Stifel Nicolaus, Mr. Hartman was the Regional Counsel for the Securities and Exchange Commission in Los Angeles, California from April 1982 to June 1994. Scott B. McCuaig joined Stifel Nicolaus in January 1998. He is Vice President of Financial and the Director of Retail Sales & Marketing of Stifel Nicolaus. Prior to joining Stifel Nicolaus, Mr. McCuaig was a Managing Director, head of marketing and regional sales manager of Robert W. Baird & Co. Incorporated. Walter F. Imhoff joined Stifel Nicolaus in January 2000. He is Managing Director of Stifel Nicolaus. Prior to joining Stifel Nicolaus, Mr. Imhoff served as Chairman, President and Chief Executive Officer of Hanifen, Imhoff, Inc., a regional broker dealer, from 1979. 12 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS a.) Market Information The common stock of Financial is traded on the New York Stock Exchange and Chicago Stock Exchange under the symbol "SF." The high/low sales prices for Financial's Common Stock for each full quarterly period for the two most recent calendar years are as follows: High and Low Stock Price By Quarter -------------------------------------------------------------- 1999 1998 Quarter High - Low High - Low -------------------------------------------------------------- First $ 10 11/16 - 9 $ 16 3/16 - 12 1/16 Second 10 11/16 - 8 15/16 17 5/8 - 13 11/16 Third 9 3/4 - 8 15/16 15 11/16 - 9 1/8 Fourth 11 7/8 - 8 15/16 11 1/2 - 8 3/4 -------------------------------------------------------------- The Company from time-to-time uses funds generated from operations to purchase the Company's common stock throughout the calendar year. The Company's Board of Directors authorized the repurchase of up to 250,000 shares on July 28, 1999, and an additional 600,000 common shares on December 10, 1999 to be used to satisfy share obligations for employee benefit plans and for general corporate purposes. b.) Holders The approximate number of stockholders of record on March 8, 2000 was 3,000. c.) Dividends Dividends paid were as follows: Record Payment Cash Stock Date Date Dividend Dividend - - ---------------------------------------------------- 02/12/98 02/26/98 $0.03 5% 05/12/98 05/28/98 $0.03 - - 08/06/98 08/20/98 $0.03 - - 11/05/98 11/19/98 $0.03 - - 02/11/99 02/25/99 $0.03 5% 05/11/99 05/27/99 $0.03 - - 08/11/99 08/25/99 $0.03 - - 11/10/99 11/24/99 $0.03 - - A regular quarterly cash dividend of $0.03 per share was established on November 30, 1993. 13 ITEM 6. SELECTED FINANCIAL DATA Stifel Financial Corp. and Subsidiaries Financial Summary
Years Ended December 31, ------------------------------------------------- (In thousands, except 1999 1998 1997 1996 1995 per share and percentages) ----------------------------------------------------- Revenues Commissions $ 68,663 $ 56,729 $ 49,763 $ 43,900 $ 38,716 Principal transactions 24,654 26,465 20,463 19,498 20,362 Investment banking 11,507 15,763 28,476 16,253 12,121 Interest 20,525 18,889 21,397 13,774 13,002 Other 25,844 19,442 15,720 16,388 11,159 --------- --------- --------- --------- ---------- 151,193 137,288 135,819 109,813 95,360 Expenses Employee compensation and benefits 92,819 86,967 81,817 66,765 57,187 Commissions and floor brokerage 2,838 2,804 2,780 2,641 2,319 Communications and office supplies 8,911 8,389 6,914 6,797 7,651 Occupancy and equipment rental 11,819 9,549 8,109 7,958 8,512 Interest 10,097 9,798 12,991 8,197 8,312 Other operating expenses 13,736 11,192 13,787 11,853 10,072 --------- --------- --------- --------- --------- 140,220 128,699 126,398 104,211 94,053 --------- --------- --------- --------- --------- Income before income taxes 10,973 8,589 9,421 5,602 1,307 Provision for income taxes 3,808 3,344 3,750 2,209 663 --------- --------- --------- --------- --------- Net income $ 7,165 $ 5,245 $ 5,671 $ 3,393 $ 644 ========= ========= ========= ========= ========= Per Share Data Basic earnings $ 1.08 $ .77 $ 1.01 $ .66 $ .13 Diluted earnings $ 1.03 $ .73 $ .88 $ .59 $ .13 Cash dividends $ .12 $ .12 $ .12 $ .09 $ .12 Other Data Total assets $ 453,110 $ 335,005 $ 315,484 $ 301,344 $ 226,775 Long-term obligations $ 34,968 $ 20,570 $ 9,600 $ 10,000 $ 10,760 Stockholders' equity $ 59,059 $ 54,977 $ 50,081 $ 37,752 $ 34,795 Net income as % average equity 12.55% 9.69 % 13.29% 9.35 % 1.87 % Net income as % revenues 4.74% 3.82 % 4.17% 3.09 % 0.68 % Average common shares and share equivalents outstanding Basic 6,655 6,850 5,591 5,150 5,079 Diluted 6,940 7,198 7,099 6,816 5,152 - - ------------------------------------------------------------------------------------------
14 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Management's Discussion and Analysis of Financial Condition and Results of Operations, included on pages 16 through 21 of the Annual Report of the Registrant to its Stockholders for the year ended December 31, 1999, is incorporated herein by reference. ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk. Quantitative and Qualitative Disclosure About Market Risk, included on page 21 of the Annual Report of the Registrant to its Stockholders for the year ended December 31, 1999, is incorporated herein by reference. ITEM 8. Financial Statements and Supplementary Data. The following consolidated financial statements included in the Annual Report of the Registrant to its Stockholders for the year ended December 31, 1999, is incorporated herein by reference. Statement Annual Report Reference ----------------------------------------------------------------------------- Consolidated Statements of Financial Condition -- December 31, 1999 and December 31, 1998................. 22 - 23 Consolidated Statements of Operations -- Years ended December 31, 1999, December 31, 1998 and December 31, 1997................................... 24 Consolidated Statements of Stockholders' Equity -- Years ended December 31, 1999, December 31, 1998 and December 31, 1997.................................. 25 Consolidated Statements of Cash Flows -- Years ended December 31, 1999, December 31, 1998 and December 31, 1997.................................. 26 - 27 Notes to Consolidated Financial Statements.............. 28 - 40 Independent Auditors' Report..................... 41 Selected Quarterly Financial Data, included on page 42 of the Annual Report of the Registrant to its Stockholders for the year ended December 31, 1999, is incorporated herein by reference. ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None 15 PART III ITEM 10. Directors and Executive Officers of the Registrant. Information regarding directors is contained in "Election of Directors," included in the Registrant's Proxy Statement for the 2000 Annual Meeting of Stockholders, which information is incorporated herein by reference. Information regarding the executive officers, as of March 24, 2000, is contained in "Item 4a. Executive Officers of the Registrant," hereof. There is no family relationship between any of the directors or named executive officers. Information regarding compliance with Section 16 of the Securities Exchange Act of 1934, as amended, is contained in "Section 16(a) Beneficial Ownership Reporting Compliance," included in the Registrant's Proxy Statement for the 2000 Annual Meeting of Stockholders, which information is incorporated herein by reference. ITEM 11. Executive Compensation. Information regarding executive compensation is contained in "Executive Compensation," included in the Registrant's Proxy Statement for the 2000 Annual Meeting of Stockholders, which information is incorporated herein by reference. ITEM 12. Security Ownership of Certain Beneficial Owners and Management. Information regarding security ownership of certain beneficial owners and management is contained in "Voting Securities and Principal Holders Thereof," included in the Registrant's Proxy Statement for the 2000 Annual Meeting of Stockholders, which information is incorporated herein by reference. ITEM 13. Certain Relationships and Related Transactions. Information regarding certain relationships and related transactions is contained in "Certain Relationships and Related Transactions," included in the Registrant's Proxy Statement for the 2000 Annual Meeting of Stockholders, which information is incorporated herein by reference. 16 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1) Consolidated Financial Statements; Incorporated herein by reference, are listed in Item 8 hereof. (2) Consolidated Financial Statement Schedules: Page ---- Independent Auditors' Report..................................16 Schedule I-Condensed Financial Information of Registrant.....17-19 Schedule II-Valuation and Qualifying Accounts.................20 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted. (3) Exhibits: See Exhibit Index on pages 22 and 23 hereof. (b) Reports on Form 8-K: There were no reports on Form 8-K during the fourth quarter ended December 31, 1999. 17 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of St. Louis, State of Missouri, on the 24th day of March 2000. STIFEL FINANCIAL CORP. (Registrant) By /s/ Ronald J. Kruszewski ----------------------------- Ronald J. Kruszewski (Principal Executive Officer) /s/ James M. Zemlyak ----------------------------- James M. Zemlyak (Principal Financial and Accounting Officer) 18 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant on March 24, 2000, in the capacities indicated. /s/ George H. Walker III Chairman of the Board - - ------------------------ George H. Walker III /s/ Ronald J. Kruszewski President, Chief Executive - - ------------------------ Officer, and Director Ronald J. Kruszewski /s/ Bruce A. Beda Director - - ------------------------ Bruce A. Beda /s/ Charles A. Dill Director - - ------------------------ Charles A. Dill /s/ Richard F. Ford Director - - ------------------------ Richard F. Ford /s/ John J. Goebel Director - - ------------------------ John J. Goebel /s/ Stuart I. Greenbaum Director - - ------------------------ Stuart I. Greenbaum /s/ Robert E. Lefton Director - - ------------------------ Robert E. Lefton /s/ James M. Oates Director - - ------------------------ James M. Oates 19 [Deloitte & Touche LLP letterhead] Independent Auditors' Report To the Board of Directors and Stockholders of Stifel Financial Corp. St. Louis, Missouri: We have audited the consolidated financial statements of Stifel Financial Corp. and Subsidiaries as of December 31, 1999 and December 31, 1998, and for each of the three years in the period ended December 31, 1999, and have issued our report thereon dated March 10, 2000; such consolidated financial statements and report are included in your 1999 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of Stifel Financial Corp. and Subsidiaries, listed in Item 14. These consolidated financial statement schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. /s/ Deloitte & Touche LLP March 10, 2000 St. Louis, Missouri 19 SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS STIFEL FINANCIAL CORP. Dec. 31, Dec. 31, 1999 1998 ----------- ----------- ASSETS Cash $ 9,155 $ 9,155 Due from subsidiaries (a) 1,496,035 3,795,026 Investment in subsidiaries (a) 59,607,151 52,684,827 Office equipment and leasehold improvements,less allowances for depreciation and amortization of $11,275,888 and $11,869,688, respectively 7,537,667 5,195,917 Investments, at cost 2,055,045 1,462,239 Goodwill, net of amortization of $737,815 and $645,955, respectively 1,631,327 1,723,187 Other assets 759,018 2,075,975 ----------- ----------- TOTAL ASSETS $73,095,398 $66,946,326 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Due to subsidiaries (a) $ 1,667,781 $ 4,773,926 Obligation under capital lease 1,067,636 847,769 Long-term debt 10,370,000 5,370,000 Other liabilities 931,269 978,417 ----------- ----------- TOTAL LIABILITIES 14,036,686 11,970,112 Stockholders' Equity: Capital stock 1,106,633 1,082,521 Additional paid-in capital 43,573,499 41,867,576 Retained earnings 24,546,476 18,291,104 ----------- ----------- 69,226,608 61,241,201 Less treasury stock, at cost 6,984,167 2,161,886 Less unearned employee stock ownership plan shares 2,813,483 3,021,862 Less unamortized expense of restricted stock awards, at cost 370,246 1,081,239 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY 59,058,712 54,976,214 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $73,095,398 $66,946,326 =========== =========== (a) Eliminated in consolidation. See Notes to Consolidated Financial Statements (Item 8) 20 SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT (continued) CONDENSED STATEMENTS OF OPERATIONS STIFEL FINANCIAL CORP. Years Ended December 31, 1999 1998 1997 Revenues: Lease $ 2,598,206 $ 1,762,434 $ 1,202,248 Other 923,039 523,138 95,015 ----------- ----------- ----------- 3,521,245 2,285,572 1,297,263 Expenses: Depreciation and amortization 2,690,033 1,853,837 1,294,108 Professional fees 176,140 410,039 290,554 Miscellaneous 799,400 492,273 194,419 ----------- ----------- ----------- 3,665,573 2,756,149 1,779,081 ----------- ----------- ----------- Loss before income taxes (144,328) (470,577) (481,818) Benefit for income taxes (52,882) (226,522) (201,150) Loss before equity in net income of subsidiaries (91,446) (244,055) (280,668) Equity in net income of subsidiaries 7,256,612 5,489,482 5,951,674 ----------- ----------- ----------- NET INCOME $ 7,165,166 $ 5,245,427 $ 5,671,006 =========== =========== =========== See Notes to Consolidated Financial Statements (Item 8) 21 SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT (continued) CONDENSED STATEMENTS OF CASH FLOWS STIFEL FINANCIAL CORP.
Years Ended December 31, 1999 1998 1997 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,165,166 $ 5,245,427 $ 5,671,006 Non-cash items included in net income: Depreciation and amortization 2,690,033 1,853,837 1,294,108 Deferred items (592,807) 79,812 (251,492) Undistributed income of subsidiaries (7,314,394) (5,489,482) (5,951,674) Amortization and forfeitures of restricted stock awards and stock benefits 853,387 594,800 172,357 ----------- ----------- ----------- 2,801,385 2,284,394 934,305 Net change in due to/due from subsidiaries (807,154) (179,370) 595,049 (Increase) decrease in other assets 1,832,200 197,542 (796,569) Increase (decrease) in other liabilities 483,624 2,765,035 (169,235) ----------- ----------- ----------- CASH FROM OPERATING ACTIVITIES 4,310,055 5,067,601 563,550 =========== =========== =========== CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from: Shares issued 1,823,318 2,043,402 2,907,790 Long-term debt 5,000,000 370,000 5,000,000 Payments for: Purchase of stock for treasury (5,437,233) (2,160,450) (2,926,452) Purchase unearned ESOP shares - - - - (3,178,125) Principal payments under capital lease (704,419) (597,930) (392,248) Cash dividend and rights redemption (852,913) (829,046) (608,968) ----------- ----------- ----------- CASH FROM FINANCING ACTIVITIES (171,247) (1,174,024) 801,997 =========== =========== =========== CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from: Distributions/sales received on investments - - 118,300 62,020 Sales of office equipment and leasehold improvements 13,241 46,205 144,512 Payments for: Acquisition of investments - - (119,999) (633,739) Acquisition of Office equipment and leasehold improvements (4,152,049) (3,938,083) (938,340) ----------- ----------- ----------- CASH FROM INVESTING ACTIVITIES (4,138,808) (3,893,577) (1,365,547) =========== =========== =========== Increase in cash 0 0 0 Cash (beginning of period) 9,155 9,155 9,155 ----------- ----------- ----------- Cash (end of period) $ 9,155 $ 9,155 $ 9,155 =========== =========== =========== Supplemental Disclosures of Cash Flow Information Schedule of Non-cash Investing and Financing Activities Fixed assets acquired under capital lease $ 924,000 $ 923,000 $ 405,000 Restricted stock awards and units, net of forfeitures $ 3,471,000 $ 1,263,000 $ 153,000 Employee stock ownership shares issued $ 152,000 $ 165,000 $ 300,000 Debt converted to stock $ - - $ - - $10,000,000 Stock dividends distributed $ 77,000 $ 3,551,000 $ 4,370,000 See Notes to Consolidated Financial Statements (Item 8)
22 SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS STIFEL FINANCIAL CORP. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E Balance at Additions Balance Beginning Charged to Costs at End Description of Period and Expenses Deduction of Period - - -------------------------------------------------------------------------------------------- Year Ended December 31, 1999: Deducted from asset account: Allowances for doubtful accounts $ 555,891 $ 5,309 $ 5,309 $ 555,891 Deducted from asset account: Allowances for doubtful notes receivables 482,369 389,367 167,518(2) 704,218 Deducted from asset account: Allowances for doubtful collection of other assets 3,586 0 3,586(5) 0 Deducted from asset Account: Reserves for investments 1,010,116 420,348 103,828 1,326,636 Deducted from asset Account: Reserves for Securities owned 200,000 0 0 200,000 Year Ended December 31, 1998: Deducted from asset account: Allowances for doubtful accounts 555,891 0 0 555,891 Deducted from asset account: Allowances for doubtful notes receivables 2,376,351 254,108 2,148,090(2) 482,369 Deducted from asset account: Allowances for doubtful collection of other assets 62,000 0 58,414(5) 3,586 Deducted from asset Account: Reserves for Investments 679,846 330,270 0 1,010,116 Deducted from asset Account: Reserves for Securities owned 200,000 0 0 200,000 Year Ended December 31, 1997: Deducted from asset account: Allowances for doubtful accounts 581,946 2,038 28,093(1) 555,891 Deducted from asset account: Allowances for doubtful notes receivables 2,551,627 235,229 410,505(2) 2,376,351 Deducted from asset account: Allowances for doubtful collection of other assets 300,000 62,000 300,000(4) 62,000 Deducted from asset Account: Reserves for Investments 735,362 175,154 230,670(3) 679,846 Deducted from asset Account: Reserves for Securities owned 200,000 0 0 200,000 (1) Uncollected accounts written off and recoveries. (2) Uncollected notes written off and recoveries. (3) Investments disposed of. (4) Uncollected asset written off. (5) Recovery of account.
23 EXHIBIT INDEX Stifel Financial Corp. and Subsidiaries Annual Report on Form 10-K Year Ended December 31, 1999 Exhibit Number Description 3. (a)(1) Restated Certificate of Incorporation of Financial filed with the Secretary of State of Delaware on June 1, 1983, incorporated herein by reference to Exhibit 3.1 to Financial's Registration Statement on Form S-1, as amended (Registration File No. 2-84232) filed July 19, 1983. (a)(2) Amendment to Restated Certificate of Incorporation of Financial filed with the Secretary of State of Delaware on May 11, 1987, incorporated herein by reference to Exhibit (3)(a)(2) to Financial's Annual Report on Form 10-K (File No. 1- 9305) for the year ended July 31, 1987. (a)(3) Certificate of Designation, Preferences, and Rights of Series A Junior Participating Preferred Stock of Financial filed with the Secretary of State of Delaware on July 10, 1987, incorporated herein by reference to Exhibit (3)(a)(3) to Financial's Annual Report on Form 10-K (File No. 1- 9305) for the year ended July 31, 1987. (a)(4) Amendment to Restated Certificate of Incorporation of Financial filed with the Secretary of State of Delaware on November 28, 1989, incorporated herein by reference to Exhibit (3)(a)(4) to Financial's Annual Report on Form 10-K (File No. 1- 9305) for the year ended July 27, 1990. (b) Amended and Restated By-Laws of Financial, incorporated herein by reference to Exhibit 3(b)(1) to Financial's Annual Report on Form 10-K (File No. 1- 9305) for fiscal year ended July 30, 1993. 4. (a) Preferred Stock Purchase Rights of Financial, incorporated herein by reference to Financial's Registration Statement on Form 8-A (File No. 1-9305) filed July 30, 1996. 10. (a)(1) Employment Agreement with George H. Walker III dated August 21, 1987, incorporated herein by reference to Exhibit 10(c) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 31, 1987.* (a)(2) First Amendment to Employment Agreement with George H. Walker III, incorporated herein by reference to Exhibit 10(a)(2) to Financial's Annual Report on Form 10-K (File No. 1- 9305) for the fiscal year ended July 31, 1992. * 24 (b) Form of Indemnification Agreement with directors dated as of June 30, 1987, incorporated herein by reference to Exhibit 10.2 to Financial's Current Report on Form 8-K (date of earliest event reported - June 22, 1987) filed July 14, 1987. (c) 1983 Incentive Stock Option Plan of Financial, incorporated herein by reference to Exhibit 4(a) to Financial's Registration Statement on Form S-8 (Registration File No. 2-94326) filed November 14, 1984. * (d) 1985 Incentive Stock Option Plan of Financial, incorporated herein by reference to Exhibit 28C to Financial's Registration Statement on Form S-8, as amended (Registration File No. 33-10030) filed November 7, 1986. * (e) 1987 Non-qualified Stock Option Plan of Financial, incorporated herein by reference to Exhibit 10(h) to Financial's Annual Report on Form 10- K (File No. 1-9305) for the fiscal year ended July 31, 1987. * (f) Amendment to 1983 Incentive Stock Option Plan, 1985 Incentive Stock Option Plan and 1987 Non- Qualified Stock Option Plan, incorporated herein by reference to Exhibit 10(f) to Financial's Annual Report on Form 10-K (File No. 1-9305) for the fiscal year ended July 28, 1989. * (g) Dividend Reinvestment and Stock Purchase Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-3 (Registration File No. 33-53699) filed May 18, 1994. (h) Amended and Restated 1997 Incentive Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-84717) filed on August 6, 1999.* (i) 1998 Employee Stock Purchase Plan of Financial, incorporated herein by reference to Financial's Registration Statement on Form S-8 (Registration File No. 333-37807) filed October 14, 1998. * (j)(1) Employment Letter with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10(l) to Financial's Annual Report on Form 10- K (File No. 1-9305) for the year ended December 31, 1997. * 25 (j)(2) Stock Unit Agreement with Ronald J. Kruszewski, incorporated herein by reference to Exhibit 10(j) 2 to Financial's Annual Report on Form 10-K (File No. 1-9305) for the year ended December 31, 1998. * (k) 1999 Executive Incentive Performance Plan of Financial,incorporated herein by reference to Annex B of Financial's Proxy Statement for the 1999 Annual Meeting of Stockholders filed March 26, 1999. * 13. Annual Report to Stockholders for the year ended December 31, 1999, filed herewith. Except for those portions of pages expressly incorporated by reference, the 1999 Annual Report to Stockholders is not deemed filed as part of this Annual Report on Form 10-K. 21. List of Subsidiaries of Financial, filed herewith. 23. Consent of Independent Auditors, filed herewith. 27. 1999 Financial Data Schedule BD, filed herewith. * Management contract or compensatory plan or arrangement. 27 EX-13 2 STIFEL FINANCIAL CORP. - 1999 Annual Report Business Environment

Stifel Financial Corp. (the "Parent"), through its wholly owned subsidiaries, principally Stifel, Nicolaus & Company, Incorporated ("Stifel Nicolaus"), collectively referred to as "the Company," is principally engaged in retail brokerage, securities trading, investment banking, investment advisory, and related financial services throughout the United States. Although the Company has offices throughout the United States, its major geographic area of concentration is in the Midwest. The Company's princip

Many factors affect the Company's results of operations, including changes in economic conditions, inflation, volatility of securities prices and interest rates, trading volume of securities, demand for investment banking services, political events, and competition from other financial institutions. As these factors are outside the control of the Company and a significant portion of the Company's expenses are relatively fixed, results of operations can vary significantly from period to period.

The Company faces increasing competition from other financial institutions, such as commercial banks, online service providers, and other companies offering financial services. The Financial Modernization Act, signed into law in late 1999, lifts restrictions on banks and insurance companies to provide financial services once dominated by securities firms. In addition, recent consolidation in the financial services industry may lead to increased competition from larger, more diversified organizations. At

The securities industry continues to benefit from the longest peacetime economic expansion, as evidenced by the growth in trading volumes of the two major stock exchanges - the New York Stock Exchange (NYSE) and NASDAQ. Since 1990, the volume increased 414% and 698%, respectively. During 1999, the major market indices - the NASDAQ composite, the Dow Jones Industrial Average, and the Standard & Poor's 500 - increased 86%, 25%, and 20%, respectively.

Trading on the Internet has increased significantly. Online brokerage customers account for more than one-third of trading in U.S. equities. The number of online accounts doubled in 1999 and is expected to quadruple in the next three years.

During 1999, the Company continued to build upon the foundation of growth and regional expansion of its Private Client Group, which began in 1998, with the opening of 11 new offices and the addition of 102 investment executives and independent contractors. In addition, the Company made several strategic moves to position itself for continued expansion with the sale of Todd Investment Advisors ("Todd"), the opening of investment banking offices in Cleveland, Ohio, and St. Louis, Missouri, the realignment of

Additionally, the Company continued to invest in and provide support for technologically advanced equipment and software for the Private Client Group during 1999, including web-based access to customer accounts and development of online trading to be launched in early 2000.

The following summarizes the changes in the major categories of revenues and expenses for the respective periods.

Year Ended Year Ended
Increase (Decrease) December 31, December 31, December 31, December 31,
1999 vs. 1998 1998 vs. 1997
Dollars in thousands Amount Perecentage Amount Percentage
Revenues:
Commissions $11,934 21% $ 6,966 14%
Principal transactions ( 1,811) ( 7) 6,002 29
Investment banking ( 4,256) (27) (12,713) ( 45)
Interest 1,636 9 ( 2,508) ( 12)
Other revenues 6,402 33 3,722 24
$13,905 10% $14,469 1%
Expenses:
Compensation and benefits $5,852 7% $5,510 6%
Communication and office supplies 522 6 1,475 21
Occupancy and equipment rental 2,270 24 1,440 18
Interest 299 3 ( 3,193) ( 25)
Commissions and floor brokerage 34 1 24 1
Other operating expenses 2,544 23 ( 2,595) ( 19)
$11,521 9% $2,301 2%

 
1999 As Compared to 1998

The Company experienced its third successive year of record revenues, as 1999 total revenues of $151.2 million outdistanced 1998 total revenues of $137.3 million. The growth in total revenues can be attributed principally to increased Private Client Group production, while investment banking revenues declined for the second successive year. Net income increased to $7.2 million or $1.03 per diluted share in 1999 from $5.2 million or $0.73 per diluted share in 1998.

Revenues from commissions increased $11.9 million, resulting principally from the strong equity markets mentioned above and the increased number of investment executives and independent contractors. The increase in commission revenues is attributed to increased activity in over-the-counter stocks, mutual funds, and insurance products, which increased 42%, 19%, and 45%, respectively.

Principal transaction revenues are primarily derived from over-the-counter equity and fixed income inventory activities. Inventories of these securities are maintained to meet clients' needs. Realized and unrealized gains and losses that result from holding and trading these securities are included in principal transaction revenues. Revenues from principal transactions decreased $1.8 million due to decreased sales of unit investment trusts and decreased sales of equity products from market-making activit

Investment banking revenues are derived from underwriting of corporate and municipal securities and providing advisory services to clients. These revenues declined $4.3 million in 1999, as new issue underwritings for small- and mid-cap offerings continued their downward trend from 1998 in conjunction with a 62% decrease in corporate underwriting participation revenue. Managed and co-managed corporate offerings and the dollar volume of these transactions decreased from eight new issues for $442 million in

Interest revenues increased $1.6 million, principally from an increase in interest earned on zero coupon U.S. Government securities held in an irrevocable trust for repayment of long-term debt (see Note J), a slight increase in interest earned on customer borrowings on margin accounts, and an increase in interest earned on stock borrowing activity, which increased $922,000, $302,000, and $287,000, respectively.

Other revenues increased $6.4 million, principally from growth in money market account fees, an increase in managed account fees, settlement of claims against former employees, and the gain on the sale of Todd.

Total expenses increased $11.5 million to $140.2 million due principally to increased employee compensation and benefits, occupancy and equipment rental, and increased litigation expense.

Employee compensation and benefits, which comprises 66% of total expenses, increased $5.9 million. The fixed component of compensation, primarily salaries, increased $1.8 million as a result of normal year-to-year salary increases and the addition of non-sales associates. The majority of these personnel increases resulted from the expansion of the Equity Capital Market Group, Private Client Group, and related product support departments. The increase of $4.1 million in the variable component of compensat

Communication and office supplies increased $522,000, resulting from the Private Client Group and investment banking office additions.

Occupancy and equipment rental increased $2.3 million, due to the office additions referred to above, increased depreciation expense related to capitalized equipment to upgrade communication and desktop work station technology and Private Client Group expansion, and increased lease expense associated with the relocated Company headquarters.

Interest expense increased $299,000 as a result of increased borrowings by the Company to finance customer margin accounts and increased notes payable.

Other operating expense increased $2.5 million due principally to expenses related to the Private Client Group expansion.

The effective tax rate for the year decreased from the previous year due to the tax effect of the gain on the disposition of Todd and reduced state taxes.
 
1998 As Compared to 1997

The strong market conditions experienced in 1997 continued to surge upward in 1998 as record volumes set in 1997 over 1996 fell by the wayside. Continued low interest rates and low inflation preserved investor confidence in the equity markets as evidenced by record trading volumes on the three major U.S. markets (NYSE, NASDAQ, and AMEX), which increased 25% over 1997's record volumes. Additionally, industry-wide net new sales of mutual funds experienced a record increase of 28% in 1998 over 1997's record

The Company's focus for 1998 was expansion of its Private Client Group. In that vein, the Company invested in several key areas to broaden its capabilities and capacity to support the Private Client Group. Professional support associates were added to improve financial and retirement planning, provide trust and corporate executive services, and provide technical support for improved technology. Additionally, the Company introduced new client statements with cost-basis information and made substantial inv

Calendar 1998 was the Company's second successive year of record revenues. Total revenues of $137.3 million represented a nominal increase over the prior year's revenues of $136.1 million but were more notable considering the drop in new issue underwritings experienced industry-wide. Net income declined to $5.2 million in 1998 from $5.7 million in 1997, while net income per diluted share declined to $0.73 from $0.88 one year earlier.

Revenues from commissions increased $7.0 million, principally as a result of the strong equity markets and an increase in the number of investment executives and independent contractors. Main components of the increase were commissions on mutual funds, listed equity securities, and insurance products, which increased 24%, 16%, and 29%, respectively.

Revenues from principal transactions increased $6.0 million, resulting primarily from revenues generated by the sales of unit investment trusts.

Investment banking revenues decreased $12.7 million from the record year of 1997, as new issue equity underwritings, especially small- and mid-cap offerings, slowed dramatically. The Company's investment banking revenues declined principally from fewer equity and preferred underwritings. The number of managed and co-managed corporate underwritings and the dollar volume of these transactions decreased from 24 new issues for $1.4 billion in 1997 to 8 new issues for $442 million in 1998.

Interest revenues decreased $2.5 million, resulting from a drop in interest earned from customer borrowings on margin accounts. This earnings decline was the result of both a reduction in customer borrowings and a moderate decrease in rates charged to customers.

Other revenues increased $3.7 million, principally from a 28% growth in money market account fees and a 28% growth in managed account service fees.

Total expenses increased $2.3 million to $128.7 million, principally as a result of increased compensation and benefits along with rising operating costs associated with the growth of the Company's Private Client Group, and were offset by a significant decline in litigation expenses.

Compensation and benefits, the largest component of the Company's total expenses, rose $5.2 million. Sales commissions, a significant element of compensation, increased $3.6 million. The increased level of sales commissions was the result of increases in hiring incentives paid to newly recruited investment executives, increases in compensation as a result of higher individual production, and increases in payments to independent contractors. The Company's emphasis on expanding the Private Client Group, br

Communications and office supplies expenses rose $1.5 million. The increases in communication costs resulted principally from the expansion and improvement of the Company's communication technology to enhance services provided for the Company's private clients. Office supplies increased as a direct result of the increase in branch office openings.

The opening of 10 new Private Client Group branch offices and the upgrading of communications technology equipment led to a $1.4 million increase in occupancy and equipment rental expenses.

Decreased borrowings to finance customer margin accounts, and the 1997 conversion of $10.0 million of debt into shares of the Company's common stock (see Note J), led to a $3.2 million decline in interest expense.

Other operating expenses decreased $2.6 million, principally caused by the significant decline in litigation related to the Company's former Oklahoma operations for which estimated losses were provided in prior years.
 
Impact of Year 2000

The Year 2000 issue is the result of computer programs written in two-digit format, rather than four-digit, to define the applicable year, which affects the ability of computer systems to accurately process dates ending after December 31, 1999.

To date, the Company has not experienced any Year 2000 issues. Due to the uncertainty surrounding date-sensitive programs not under the Company's control and the interdependent nature of securities transactions, the Company will continue to monitor its daily activities for Year 2000 issues.
 
Forward-Looking Statements

The Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry, which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory acti
 
Liquidity and Capital Resources

The Company's assets are principally highly liquid, consisting mainly of cash or assets readily convertible into cash. These assets are financed primarily by the Company's equity capital, customer credit balances, short-term bank loans, proceeds from securities lending, long-term notes payable, and other payables. Changes in securities market volumes, related customer borrowing demands, underwriting activity, and levels of securities inventory affect the amount of the Company's financing requirements. On July 30, 1999, the Company issued an additional $5,000,000 long-term note payable to Western and Southern Life Insurance Company, a significant shareholder, due June 30, 2004, with interest payable monthly at the rate of 8% per annum.

On December 14, 1999, the Company announced the agreement to merge with HII, a Denver-based investment banking firm. The merger is being accounted for as a purchase and provides for a tax-free exchange of approximately 517,000 shares of the Company for all of the outstanding shares of HII. The shares will be issued out of treasury.

The Company's Board of Directors authorized the repurchase of up to 250,000 additional common shares on July 28, 1999, and an additional 600,000 common shares on December 10, 1999. These purchases may be made on the open market or in privately negotiated transactions, depending on market conditions and other factors. Repurchased shares may be used to meet obligations under the Company's employee benefit plans and for general purposes.

Management believes that funds from operations, available informal short-term credit arrangements, and long-term borrowings will provide sufficient resources to meet its present and anticipated financing needs.

Stifel, Nicolaus & Company, Incorporated, the Company's principal broker-dealer subsidiary, is subject to certain requirements of the Securities and Exchange Commission with regard to liquidity and capital requirements. At December 31, 1999, Stifel Nicolaus had net capital of approximately $31.9 million, which exceeded the minimum net capital requirements by approximately $24.8 million.
 
Inflation

The Company's assets are primarily monetary, consisting of cash, securities inventory, and receivables. These monetary assets are generally liquid and turn over rapidly and, consequently, are not significantly affected by inflation. However, the rate of inflation affects various expenses of the Company, such as employee compensation and benefits, communications, and occupancy and equipment, which may not be readily recoverable in the price of its services.
 
Market Risk

Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations, or other market factors, such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. The Company actively monitors its market risk through a variety of control procedures involving senior management and selected risk management committees. The Company's existing and proposed underwritings, credit extended to custome

During 1999, the Company's securities trading inventory consisted of fixed income debt and over-the-counter equity positions. The fair value of these securities at December 31, 1999, was $21.4 million and $7.3 million, respectively, in long positions and $1.2 million and $809,000, respectively, in short positions. Analysis was performed on these instruments that assessed the related risk and materiality as required by the Securities and Exchange Commission. Based on this analysis, in the opinion of manag   Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," which, after being amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," is effective for fiscal years beginning after June 15, 2000. This statement establishes accounting and reporting standards for derivative instrument
 
Consolidated Statements of Financial Condition
(in thousands) December 31, 1999 December 31, 1998
Assets Cash and cash equivalents $16,861 $12,835
Cash segregated for the exclusive benefit of customers 181 177
Receivable from brokers and dealers:
Securities failed to deliver 1,732 1,481
Deposits paid for securities borrowed 33,029 12,653
Settlement balances with clearing organizations 7,276 9,812
42,037 23,946
Receivable from customers, net of allowance for doubtful accounts of $556 and $446, respectively 313,034 213,709
Securities owned, at fair value:
U.S. Government obligations 4,287 4,282
State and municipal obligations 12,260 27,946
Corporate obligations 4,801 2,025
Corporate stocks 7,342 4,379
28,690 38,632
Memberships in exchanges, at cost 470 513
Office equipment and leasehold improvements, at cost, net of allowances for depreciation and amorization of $11,370 and $12,361, respectively 7,597 5,315
Goodwill, net of accumulated amoritzation of $738 and $1,721, respectively 1,631 3,874
Notes receivable from and advances to officers and employees, net of allowance for doubtful receivables from former employees of $701 and $482, respectively 7,934 6,460
Deferred tax asset 2,958 3,213
Other assets 31,717 26,331
TOTAL ASSETS $453,110 $335,005

(in thousands, except share amounts) December 31, 1999 December 31, 1998
Liabilites and Short-term borrowings from banks $122,950 $62,890
Stockholders'
Equity Payable to brokers and dealers:
       Securities failed to receive 4,037 1,545
     Deposits received from securities loaned 143,023 103,224
147,060 104,769
Payable to customers 33,643 37,306
Securities sold, but not yet purchased, at fair value 2,036 998
Drafts payable 18,065 18,210
Accured employee compensation 18,277 18,320
Obligations under capital leases 1,068 848
Accounts payable and accured expenses 15,984 16,117
Long-term debt 34,968 20,570
Total Liabilities 394,051 280,028
Stockholders' equity:
       Preferred stock - $1 par value; authorized 3,000,000 shares
             3,000,000 shares; none issed
       Common stock - $.15 par value; authorized 10,000,000 shares;
              issed 7,376,176 and 7,219,335 shares, respectively 1,107 1,084
       Additional paid-in capital 43,573 41,867
       Retained earnings 24,546 18,291
69,226 61,242
Less:
    Treasury stock, at cost
         724,055 and 222, 743 shares, respectively 6,984 2,162
    Unamortized expense of restricted stock awards 370 1,081
    Unearned employee stock ownership plan shares,
         at cost, 219,601 and 235,866 shares, respectively 2,813 3,022
Total stockholder's Equity 59,059 54,977
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $453,110 $335,005
See Notes to Consolidated Financial Statements.
 
Consolidated Statements of Operations
Years Ended December 31,
(In thousands, except per share amounts) 1999 1998 1997
Revenues Commissions $ 68,663 $ 56,729 $ 49,763
Principal transactions    24,654    26,465   20,463
Investment banking    11,507   15,763   28,476
Interest    20,525   18,889   21,397
Other    25,844   19,442   15,720
151,193 137,288 135,819
Expenses Employee compensation and benefits 92,819 86,967 81,817
Communications and office supplies   8,911   8,389   6,914
Occupancy and equipment rental 11,819   9,549   8,109
Interest 10,097   9,798 12,991
Commissions and floor brokerage   2,838   2,804   2,780
Other operating expenses 13,736 11,192 13,787
140,220 128,699 126,398
Income before income taxes 10,973 8,589 9,421
Provision for income taxes 3,808 3,344 3,750
Net income $ 7,165 $ 5,245 $ 5,671
Earning Per Common   Net Income per share:
Share and Share     Basic earnings per share $   1.08 $   0.77 $   1.01
Equivalents     Diluted earnings per share $   1.03 $   0.73 $   0.88
See Notes to Consolidated Financial Statements
 
Consolidated Statements of Stockholders' Equity
(in thousands, except share amounts) Common Stock
_______________________
Shares                Amounts		 Additional Paid-in Capital Retained Earnings Treasury Stock and Unearned Employee
Stock Ownership Plan
Shares              Amount		 Unamoritzed Expense of Restricted Stock Wards Total
Balance at January, 1997 4,767,715 $   715 $   21,403 $   16,733 ( 135,455) $(  892) $( 207) $ 37, 752
Cash dividends - common stock ($.12 per share) (   609) (   609)
Purchase of treasury shares (276,331) (2,926) (  2,926)
Employee benefit plans (   82) 158,740 1,098 1,016
Stock options exercised (   274) 49,467 375 101
Restricted stock awards (  196) 42,168 349 (153) - -
Amoritzation of restricted stock awards 175 175
Shares issued 1,592,707 239 11,832 12,071
Dividend reinvestment 1 794 7 8
Net income for the year 5,671 5,671
5% stock dividend 317,801 48 4,322 (  4,370) (  8,031) - -
Employee stock ownership plan (236,250) (  3,178) ( 3,178)
Balance at December 31, 1997 6,678,223 1,002 37,006 17,425 (404,898) (5,167) (   185) 50,081
Cash dividends - common stock ($.12 per share) (   828) (   828)
Purchase of treasury shares (211,717) ( 2,160) ( 2,160)
Employee benefit plans 20,903 3 (   267) 173,351 2,082 1,818
Stock Options exercised 94,676 14 367 7,099 63 444
Restricted stock awards 82,000 12 1,262 (  1,576) (     11) (1,263) - -
Amortization of restricted stock awards 367 367
Dividend reinvestment 1 972 9 10
Net income for the year 5,245 5,245
5% stock dividend 343,533 53 3,498 (  3,551) ( 21,840) - -
Balance at December 31, 1998 7,219,335 1,084 41,867 18,291 (458,609) (5,184) (1,081) 54,977
Cash dividends - common stock ($ .12 per share) (  853) (   853)
Purchase of treasury shares (576,165) (5,437) ( 5,437)
Employee benefit plans 156,841 23 2,278 (    57) 19,837 231 2,475
Stock options exercised (  572) 106,346 1,019 447
Restricted stock awards, net forfeitures (35,807) ( 433) 433 - -
Amortization of restricted stock awards 278 278
Dividend reinvestment 742 7 7
Net income for the year 7,165 7,165
Balance at December 31, 1999 7,376,176 $1,107 $ 43,573 $24,546 (943,656) $(9,797) (  370) $59,059
See Notes to Consolidated Financial Statements
 
Consolidated Statements of Cash Flows
Years Ended December 31,
(in thousands) 1999 1998 1997
Cash Flows Net income $7,165 $5,245 $5,671
From Operating
Activities Noncash items included in earnings:
     Depreciation and amoritzation 2,790 2,133 1,519
     Bonus notes amoritzation 1,992 1,717 1,178
     Deferred items 403 1,938 13
     Amortization of restricted stock awards, units, and           stock benefits 854 595 172
     Gain on sale of subsidiary (  1,496) - - - -
11,708 11,628 8,553
Decrease (increase) in operating receivables:
        Customers         		(99,325) 4,592 16,915
        Brokers and dealers (18,091) 11,277 (20,387)
(Decrease) increase in operating payables:
        Customers         		( 3,663) ( 1,933) 7,144
        Brokers and dealers 42,291 31,061 26,560
Decrease (increase) in assets:
       Cash and U.S. Government securities
            segregated for the exclusive benefit of customers		 (       4) - - 305
Securities owned 9,942 (19,420) (  300)
Notes receivable from officers and employees ( 3,466) ( 3,927) ( 2,409)
Other assets (       64) ( 3,225) 1,633
(Decrease) increase in liabilites:
      Securities sold, not yet purchased		 1,038 ( 3,266) 1,035
      Drafts payable, accounts payable and accrued
           expenses, and accrued employee compensation		 41 3,153 10,148
Cash From Operating Activities $(59,593) $ 29,940 $ 49,197

Years Ended December 31,
(in thousands) 1999 1998 1997
Cash From Operating Activities - From Previous Page $( 59,593) $ 29,940 $ 49,197
Cash Flows Net (payments) proceeds for short-term
       borrowings from banks		 60,060 (26,260) (43,250)
From Operating Proceeds from:
       Issuance of stock		 1,823 2,043 2,907
Activities        Long-term debt 14,398 10,970 9,600
       Subordinated borrowings - - - - 8,000
Payments for:
     Purchase of stock for treasury ( 5,437) ( 2,160) ( 2,926)
     Principal payments under
        capital lease obligation		 (     704) (   597) (  392)
     Surordinated borrowings - - - - ( 8,000)
     Cash dividends and rights redemption (     853) (   828) (   609)
     Purchase of stock for employee stock
          ownership plan		 - - - - ( 3,178)
Cash From Financing Activities 69,287 (16,832) (37,848)
Cash Flows Proceeds from:
From Investing         Sales of investments 219 118 84
Activities         Sales of subsidiary 4,609 - - - -
Payments to:
        Acquisition of office equipment and leasehold improvements ( 3,984) ( 3,979) (  854)
      Acquisition of investments ( 6,512) ( 11,778) ( 3,173)
Cash From Investing Activities ( 5,668) (15,639) (  3,943)
(Decrease) increase in cash and cash equivalents 4,026 (2,531) 7,406
Cash and cash equivalents - beginning of year 12,835 15, 366 7,960
Cash and cash equivalents - end of year $ 16,861 $ 12,835 $15,366
Supplemental disclosures of cash flow information:
     Interest payments $ 9,682 $ 10,082 $ 13,093
     Income tax payments $ 3,648 $ 4,474 $ 3,418
Schedule of Noncash Investing and Financing Activities:
     Fixed assets acquired under capital Iease $    924 $  923 $  405
     Restricted stock awards and units, net of forfeitures $ 3,471 $  1,263 $  153
     Employee stock ownership shares $    152 $   165 $  300
     Debt converted into stock - - - - $  10,000
     Stock dividends distributed $   77 3,551 $ 4,370
See Notes to Consolidated Financial Statements
 
Notes to Consolidated Financial Statements
NOTE A - Summary of Significant Accounting and Reporting Policies
Nature of Operations

Stifel Financial Corp. (the "Parent"), through its wholly owned subsidiaries, principally Stifel, Nicolaus & Company, Incorporated ("Stifel Nicolaus"), collectively referred to as "the Company," is principally engaged in retail brokerage, securities trading, investment banking, investment advisory, and related financial services throughout the United States. Although the Company has offices throughout the United States, its major geographic area of concentration is in the Midwest. The Company's principal

Basis of Presentation

The consolidated financial statements include the accounts of the Parent and its wholly owned subsidiaries, principally Stifel Nicolaus. Stifel Nicolaus is a broker-dealer registered under the Securities Exchange Act of 1934. All material intercompany balances and transactions are eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Where appropriate, prior years' financial information has been reclassified to conform with the current year presentation.

The Company defines cash equivalents as short-term, highly liquid investments with original maturities of 90 days or less, other than those held for sale in the ordinary course of business.

Security Transactions

Trading and investment securities owned and securities sold, but not yet purchased are carried at fair value, and unrealized gains and losses are reflected in the results of operations. Securities not readily marketable held for investment by the Parent and certain subsidiaries are included in other assets and are carried at the lower of historical cost or fair value. Investment securities of registered broker-dealer subsidiaries are carried at fair value or amounts that approximate fair value as determin

Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received by settlement date.

Receivable from customers includes amounts due on cash and margin transactions. The value of securities owned by customers and held as collateral for these receivables is not reflected in the consolidated statements of financial condition.

Customer security transactions are recorded on a settlement date basis with related commission revenues and expenses recorded on a trade date basis. Principal securities transactions are recorded on a trade date basis.

Fair Value

The Company's financial instruments are carried at fair value or amounts that approximate fair value. Securities owned and securities sold, but not yet purchased are valued using quoted market or dealer prices, pricing models, or management's estimates. Customer receivables, primarily consisting of floating-rate loans collateralized by customer-owned securities, are charged interest at rates similar to other such loans made throughout the industry. The Company's remaining financial instruments are genera Income Taxes

Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial reporting and income tax bases of assets and liabilities.

Segment Reporting

During 1998, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures About Segments of Enterprise and Related Information." SFAS No. 131 supersedes SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise," replacing the "industry segment" approach with the "management" approach. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of the Company's

Comprehensive Income

During 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income," which requires entities to report changes in equity that result from transactions and economic events other than those with shareholders. The Company had no other comprehensive income; accordingly, net income and other comprehensive income are the same.

Other

Securities borrowed and securities loaned are recorded at the amount of cash collateral advanced or received. Securities borrowed transactions require Stifel Nicolaus to deposit cash or other collateral with the lender. With respect to securities loaned, Stifel Nicolaus receives collateral in the form of cash or other collateral in an amount generally in excess of the market value of securities loaned. Stifel Nicolaus monitors the market value of securities borrowed and loaned on a daily basis, with addi

Amortization of assets under capital lease is computed on a straight-line basis over the estimated useful life of the asset. Leasehold improvements are amortized over the remaining term of the lease. Depreciation of office equipment is provided over estimated useful lives of three to seven years using accelerated methods.

Goodwill recognized in business combinations accounted for as purchases is being amortized over 15 to 40 years on a straight-line basis.

Basic earnings per share of common stock is computed by dividing income available to shareholders by the weighted average number of common shares outstanding during the periods. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted earnings include dilutive stock options under the treas
 
NOTE B - Special Reserve Bank Account

At December 31, 1999, cash of $181 has been segregated in a special reserve bank account for the exclusive benefit of customers pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934.
 
NOTE C - Short-Term Borrowings From Banks

In the normal course of business, Stifel Nicolaus borrows from various banks on a demand basis with company-owned and customer securities pledged as collateral. Available credit arrangements with banks totaled $225,000 at December 31, 1999, of which $102,050 was unused. There were no compensating balance requirements under these arrangements. The Company's floating interest rate short-term borrowings bore interest at a weighted average rate of 4.88% and 5.65% at December 31, 1999 and 1998, respectively. 6,625 and $29,475 were collateralized by company-owned securities valued at $22,741 and $38,301 at December 31, 1999 and 1998, respectively. Short-term borrowings of $106,325 and $33,415 used to finance receivables from customers were collateralized by customer-owned securities valued at $174,698 and $60,846 at December 31, 1999 and 1998, respectively.
 
NOTE D - Commitments and Contingencies

In the normal course of business, Stifel Nicolaus enters into underwriting commitments. Settlement of transactions relating to such underwriting commitments, which were open December 31, 1999, had no material effect on the consolidated financial statements.

In connection with margin deposit requirements of The Options Clearing Corporation, Stifel Nicolaus has pledged cash and customer-owned securities valued at $57,958. At December 31, 1999, the amounts on deposit satisfied the minimum margin deposit requirement of $45,885.

The future minimum rental commitments at December 31, 1999, with initial or remaining non-cancellable lease terms in excess of one year are as follows:

Operating Leases
________________________________________________________
Year Ending December 31, Capital Leases Lease Commitments Minimum Payments Under Related Sublease Future Minimum Rental Commitment
2000 $ 630 $ 5,249 $( 106) $ 5,143
2001    330 4,861 ( 50) 4,811
2002    201 4,057 ( 17) 4,040
2003   - - 3,684 - - 3,684
2004 - - 2,734 - - 2,734
Thereafter - - 12,313 - - 12,313
Minimum Commitments $1,161 $32,898 $( 173) $32,725
         Less Interest       93
_____
Net Present Value of Capital Lease Obligations $1,068

Rental expense for the years ended December 31, 1999, 1998, and 1997, approximated $4,728, $4,032, and $2,899, respectively.

Office equipment, under capital leases, with a recorded cost of approximately $1,021, net of amortization of $940, and $828, net of amortization of $1,387, at December 31, 1999 and 1998, respectively, collateralizes the above capital lease obligations and is included in the consolidated statements of financial condition in the caption of "Office equipment and leasehold improvements."

Amortization and depreciation expense of assets under capital lease and owned furniture and equipment for 1999, 1998, and 1997 was $2,626, $1,794, and $1,224, respectively.
 
NOTE E - Net Capital Requirements

Stifel Nicolaus is subject to the Uniform Net Capital Rule, Rule 15c3-1 under the Securities Exchange Act of 1934 (the "rule"), which requires the maintenance of minimum net capital, as defined. Stifel Nicolaus has elected to use the alternative method permitted by the rule that requires maintenance of minimum net capital equal to the greater of $250 or 2 percent of aggregate debit items arising from customer transactions, as defined. The rule also provides that equity capital may not be withdrawn or cash

At December 31, 1999, Stifel Nicolaus had net capital of $31,917, which was 8.98 percent of aggregate debit items and $24,811 in excess of minimum required net capital.
 
NOTE F - Employee Benefit Plans

The Company has a profit sharing 401(k) plan (the "PSP") covering qualified employees as defined in the plan. Contributions to the PSP were based upon a company match of 50% of the employees' first five hundred dollars in annual contributions for 1999, 1998, and 1997. Additional contributions by the Company are discretionary. The amounts charged to employee compensation and benefits for the PSP were $177, $158, and $142, for 1999, 1998, and 1997, respectively.

Effective January 1, 1999, Stifel Nicolaus adopted a new deferred compensation plan for its investment executives ("I.E.s") who achieve certain levels of production, whereby a certain percentage of their earnings is deferred as defined by the plan, of which 50% is deferred into Parent stock units with a 25% matching contribution and 50% into one of two investment options chosen by the I.E.s. I.E.s may elect to defer an additional 1% of earnings into Parent stock units with a 25% matching contribution. Pri
 
NOTE G - Stock-Based Compensation Plans

The Company has several stock-based compensation plans, which are described below. The Company applies APB Opinion 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its plans. Had compensation cost for the Company's stock-based compensation plans been determined based on the fair value at the grant dates for awards under the Fixed Stock Option and the Employee Stock Purchase Plans consistent with the method of FASB Statement 123, "Accounting for Stock-Based Comp

Years Ended December 31,
1999 1998 1997
Net Income
     As reported $7,165 $5,245 $5,671
     Pro forma $6,758 $4,629 $5,283
Basic earnings per share
    As reported $ 1.08 $ 0.77 $ 1.01
    Pro forma $ 1.02 $ 0.68 $ 0.94
Diluted earnings per share
    As reported $ 1.03 $ 0.73 $ 0.88
    Pro forma $ 0.97 $ 0.64 $ 0.82

All option plans are administered by the Compensation Committee of the Board of Directors of the Parent, which has the authority to interpret the Plans, determine to whom options may be granted under the Plans, and determine the terms of each option.

Fixed Stock Option Plans

The Company has four fixed stock option plans and an incentive stock award plan. Under the Company's 1983 and 1985 Incentive Stock Option Plans, the Company granted options up to an aggregate of 450,000 shares to key employees. Under the Company's 1987 non-qualified stock option plan, the Company granted options up to an aggregate of 100,000 shares. Under the Company's 1997 "Incentive Stock Plan," the Company may grant incentive stock options, stock appreciation rights, restricted stock, performance awar

Effective with options granted in 1995 and subsequently, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 1999, 1998, and 1997, respectively: dividend yield of 1.09%, 1.15%, and 1.50%; expected volatility of 33.65%, 41.9%, and 42.7%; risk-free interest rates of 5.78%, 5.15%, and 6.22%; and expected lives of 6.56 years, 5.25 years, and 5.25 years.

The summary of the status of the Company's fixed stock option plans as of December 31, 19999, 1998, 1997, and changes during the years ending on those dates is presented below:
1999
_____________________		 1998
_____________________		 1997
_____________________
Fixed Options Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price Shares Weighted-Average Exercise Price
Outstanding at beginning of year 769,084 $8.78 764,617 $7.49 477,857 $5.10
Granted 296,393 9.67 169,050 11.70 396,995 9.75
Exercised ( 106,346) 5.51 ( 106,864) 4.60 ( 54,537) 5.10
Forfeited ( 151,246) 11.21 ( 55,812) 9.42 ( 44,289) 4.83
Expired - - - - (  1,907) 4.26 ( 11,409) 6.26
Outstanding at end of year 807,885 $  9.32 769,084 $ 8.78 764,617 $  7.49
Options exercisable at year-end 351,987 384,475 360,180
Weighted-average fair value of options granted during the year $3.92 $4.78 $4.07

The following table summarizes information about fixed stock options outstanding at December 31, 1999:
Options Outstanding
___________________________________________________		 Options Exercisable
______________________________
Range of Exercise Prices Number Outstanding at 12/31/99 Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Number Exercisable at 12/31/99 Weighted-Average Exercise Price
$ 3.73 - $5.61 175,433 5.44 $  5.2191 172,032 $  5.2145
   6.26 -   9.58 214,744 8.81 9.0684 30,650 7.2485
   9.76 -  10.69 139,050 9.47 9.9688 11,865 10.0190
  10.83 - 10.84 165,347 7.75 10.8276 107,651 10.8276
  11.07 - 15.31 113,311 8.30 13.2108 29,789 13.9112
$ 3.73 - $15.31 807,885 7.90 $  9.3285 351,987 $  8.0063

Employee Stock Purchase Plan

Under the 1998 Employee Stock Purchase Plan (the "ESPP"), the Company was authorized to issue up to 157,500 shares of common stock to its full-time employees, nearly all of whom are eligible to participate. Under the terms of the ESPP, employees can choose each year to have a specified percentage of their compensation withheld in 1% increments not to exceed 10%. The participant may also specify a maximum dollar amount to be withheld. At the beginning of every year, each participant will be granted an opt

Effective with options granted in 1995, the fair value of each employee's purchase rights is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 1999, 1998, and 1997, respectively: dividend yield of 1.09%, 1.15%, and 1.50%; expected volatility of 33.7%, 41.9%, and 42.7%; risk-free interest rates of 5.08%, 5.05%, and 5.61%; and expected lives of one year. The weighted-average fair value of those purchase rights granted in 1999, 1998, and

Restricted Stock Awards

Restricted stock awards are made, and shares issued, to certain key employees without cash payment by the employee. Certain key employees were granted 1,783, 98,275, and 50,164 shares of restricted stock, with a fair value of $19, $1,276, and $337, during 1999, 1998, and 1997, respectively. At December 31, 1999, restricted stock awards covering 35,074 shares were outstanding, with the restrictions expiring at various dates through 2003. The shares are restricted as to resale. Restrictions lapse ratably

Stock Units

A stock unit represents the right to receive a share of common stock from the Parent at a designated time in the future without cash payment by the employee and is issued in lieu of cash incentive. A deferred compensation plan is provided to certain revenue producers, officers, and key administrative employees, whereby a certain percentage of their incentive compensation is deferred as defined by the plan into Parent stock units with a 25% matching contribution by the Company. Participants may elect to de

Employee Stock Ownership Plan

The Company has an employee stock ownership plan (the "ESOP") covering qualified employees as defined in the plan. Employer contributions are made to the ESOP as determined by the Compensation Committee of the Board of Directors of the Parent on behalf of all eligible employees based upon the relationship of individual compensation (up to a maximum of $160) to total compensation. In 1997, the Company purchased 248,063 shares for $3,178 and contributed these shares to the ESOP. The unallocated shares will
 
NOTE H - Legal Proceedings

The Company is a defendant in several lawsuits and arbitrations relating principally to its securities business. Some of these lawsuits and arbitrations claim substantial amounts, including punitive damages. One such claim involves a lawsuit filed by The Oklahoma Turnpike Authority ("OTA"). The OTA suit seeks $6.5 million in compensatory damages and an unspecified amount of punitive damages. The OTA suit alleges that an undisclosed fee paid to the Company by a third party for the placement of a forward
 
NOTE I - Financial Instruments With Off-Balance Sheet Credit Risk

In the normal course of business, the Company executes, settles, and finances customer and proprietary securities transactions. These activities expose the Company to off-balance sheet risk in the event that customers or other parties fail to satisfy their obligations.

In accordance with industry practice, securities transactions are recorded on settlement date, generally three business days after trade date. Should a customer or broker fail to deliver cash or securities as agreed, the Company may be required to purchase or sell securities at unfavorable market prices.

The Company borrows and lends securities to finance transactions and facilitate the settlement process, utilizing both firm proprietary positions and customer margin securities held as collateral. The Company monitors the adequacy of collateral levels on a daily basis. The Company periodically borrows from banks on a collateralized basis utilizing firm and customer margin securities in compliance with SEC rules. Should the counterparty fail to return customer securities pledged, the Company is subject to Concentrations of Credit Risk

The Company maintains margin and cash security accounts for its customers located throughout the United States. The majority of the Company's customer receivables are serviced by branch locations in Missouri and Illinois.

Derivatives

The Company deals, on an agency basis, in listed options and other products such as collateralized mortgage obligations, which derive their values from the price of some other security or index. The Company does not deal in complex derivative financial instruments, such as futures, forwards, and swaps.
 
NOTE J - Long-Term Debt

At December 31, 1996, the Parent had outstanding $10,000 aggregate principal amount of its 11.25 percent senior convertible notes due September 1, 1997, through September 1, 2000. During 1997, the notes were converted into 1,563,021 shares of the Company's $.15 par value common stock at a conversion price of $6.40 per share. Interest charged to operations for these notes was $886 for 1997.

The Company has outstanding $10,000 principal amount of notes due on June 30, 2004. Interest is payable monthly at the rate of 8% per annum.

The Company formed two Limited Liability Corporations, referred to collectively as "the LLC," to be certified capital companies under the statutes of the state of Missouri, which provide venture capital for qualified Missouri businesses, as defined. The LLC issued $4,600 non-interest bearing notes due May 15, 2008, $10,600 non-interest bearing notes due February 15, 2009, $8,417 non-interest bearing notes due February 15, 2010, and $982 non-interest bearing participating debentures due December 31, 2010, w pany's consolidated statement of financial condition under the caption "long-term debt." Proceeds from the notes are first invested in zero coupon U.S. Government securities in an amount sufficient to accrete to the repayment of the notes and are placed in an irrevocable trust. These securities, valued at approximately $13,474 and $8,440 at December 31, 1999 and 1998, respectively, are held to maturity and are included under the caption "other assets." The remaining proceeds are available for investment sses.
 
NOTE K - Investments in Qualified Missouri Businesses

The LLC invests in qualified Missouri businesses in the form of debt, preferred, and/or common equity. These investments are not readily marketable and, therefore, are valued at fair value, as determined by management. In determining fair value, investments are initially stated at cost until significant subsequent events and operating trends require a change in valuation. Among the factors considered by management in determining fair value of investments are the cost of the investment, terms and liquidit

Given the profile of these qualified businesses, these investments are subject to a high degree of volatility and may be susceptible to significant fluctuation in the near term. Due to the structure of the LLC and under the statutes of the State of Missouri, the Company participates in a portion of the appreciation of these investments. Management monitors these investments on a continuous basis. The Company increased the valuation of its portfolio investments and recorded a net unrealized gain of $416 d
 
NOTE L - Preferred Stock Purchase Rights

On June 30, 1987, the Company's Board of Directors declared a distribution of one preferred stock purchase right for each share of the Company's common stock. On July 23, 1996, the Company's Board of Directors approved the redemption of these shareholder rights and the adoption of a new Shareholder Rights Plan. Shareholders of record on August 12, 1996, received a payment of $.05 per share, representing the redemption price for the existing rights. This payment was in lieu of the regular quarterly divide In addition, on July 23, 1996, the Company's Board of Directors authorized and declared a dividend distribution of one preferred stock purchase right for each outstanding share of the Company's common stock, par value $0.15 per share. The dividend was distributed to stockholders of record on August 12, 1996. Each right will entitle the registered holder to purchase one one-hundredth of a share of a Series A Junior Participating Preferred Stock, par value $1.00 per share, at an exercise price of $35 per ri
 

NOTE M - Income Taxes
The Company's provision (benefit) for income taxes consists of:
Years Ended December 31,
1999 1998 1997
Current:
   Federal $3,165 $1,600 $ 3,760
   State      388      381      897
$3,553 $1,981 $ 4,657
       
Deferred:
   Federal $  227 $1,100 $(  732)
   State      28      263   (  175)
$  255 $1,363 $(  907)
$3,808 $3,344 $3,750

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before income taxes for the following reasons:
Years Ended December 31,
1999 1998 1997
Federal tax computed at statutory rates $3,731 $2,921 $ 3,203
State income taxes, net of federal
      income tax benefit		      255      441       476
Sale of Todd Investment Advisors (   386)        - -         - -
Other, net     208 (     18)         71
Provision for income taxes $3,808 $3,344 $3,750

The net deferred tax asset consists of the following temporary differences:
  December 31, 1999   December 31, 1998
Deferred Tax Asset   Office equipment and leasehold improvements,
     principally book over tax depreciation		   $   298   $   859
  Deferred compensation   1,427   1,400
  Deferred revenue   953   974
  Investments, principally due to valuation allowance   98   92
  Receivables from officers and employees, principally
     due to allowance for doubtful accounts		   258   189
  Accruals not currently deductible   1,741   1,212
  Other   65   101
 
  Deferred Tax Asset   4,840   4,827
 
Deferred Tax Liability   Customer and emmployee receivable   (1,226)   (1,304)
  Intangible assets, principally tax over book amortization   (176)   (195)
  Investment fee revenue installment receivable   (480)   (115)
 
  Total Gross Deferred Tax Liability   (1,882)   (1,614)
 
       Net Deferred Tax Asset   $ 2,958   $ 3,213
 

The Company believes that a valuation allowance with respect to the realization of the total gross deferred tax asset is not necessary. Based on the Company's historical earnings and taxes previously paid, future expectations of taxable income, and the future reversals of gross deferred tax liability, management believes it is more likely than not that the Company will realize the gross deferred tax asset.
 
NOTE N - Related Party Transactions

Four directors of the Parent are associated with firms that provide legal and consulting services to the Company. The Company charged approximately $460, $761, and $1,586 (primarily for legal fees) to operations for these services for 1999, 1998, and 1997, respectively.

A director of the Parent has a general partnership interest in an enterprise in which the Company also holds general and limited partnership interests carried at approximately $759 at December 31, 1999, and $628 at December 31, 1998.
 
NOTE O - Segment Reporting

The Company's reportable segments include private client, capital markets, and other. The private client segment includes 180 branch offices of the Company's broker-dealer subsidiaries located throughout the U.S., primarily in the Midwest. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, to their private clients. The capital markets segment includes management and participation in underwritings (exclusive of sales cr

Intersegment revenues and charges are eliminated between segments. The Company evaluates the performance of its segments and allocates resources to them based on various factors, including prospects for growth, return on investment, and return on revenues.

The Company has not disclosed asset information by segment, as the information is not produced internally and its preparation is impracticable.

Information concerning operations in these segments of business is as follows:
  Years Ended December 31,
  1999   1998   1997
Revenues
     Private Client   $  127,230   $  112,050   $  107,537
     Capital Markets   17,677   19,517   23,517
     Other   6,286   5,721   5,042
Total Revenues   $  151,193   $  137,288   $  136,096
Operating Contribution
     Private Client   $    20,959   $    17,059   $    13,194
     Capital Markets   386   1,826   7,208
     Other   2,505   1,325   820
Total Operating Contribution   23,850   20,210   21,222
     Unallocated Overhead   (  12,877)   (  11,621)   (  11,801)
Pre-Tax Income   $    10,973   $    8,589   $    9,421
 
NOTE P - Earnings Per Share

The following table reflects a reconciliation between Basic EPS and Diluted EPS.
Years Ended December 31,
__________________________________________________________________________
1999
_____________________		 1998
_____________________		 1997
_____________________
Net Income Income
(Numerator)		 Shares
(Denominator)		 Per Share Amount Income
(Numerator)		 Shares
(Denominator)		 Per Share Amount Income
(Numerator)		 Shares
(Denominator)		 Per Share Amount
Basic Earnings Per Share
Income available to shareholders $ 7,165 6,654,773 $ 1.08 $5,245 6,849,998 $ 0.77 $ 5,671 5,590,919 $ 1.01
Effect of Dilutive Securities
Employee benefits plans - - 285,351 - - - - 347,988 - - - - 292,328 - -
Convertible debt - - - - - - - - - - - - 541 1,215,692 - -
Diluted Earnings Per Share
Income available to common stockholders and assumed conversions $ 7,165 6,940,124 $ 1.03 $5,245 7,197,986 $ 0.73 $6,212 7,089,939 $0.88
 
NOTE Q - Sale of Subsidiary

On April 28, 1999, the Company sold its investment advisor subsidiary, Todd Investment Advisors, to Western and Southern Life Insurance Company, a significant shareholder. The Company recorded a pre-tax gain of approximately $1.5 million, which is included in other income.
 
NOTE R - Subsequent Event

On January 27, 1999, the Company's Board of Directors approved a $.03 per share cash dividend to be paid on March 3, 2000, to shareholders of record on February 18, 2000.

On January 12, 2000, the Company completed the merger of Hanifen, Imhoff Inc. ("HII"), a Denver-based investment banking firm. The transaction is being accounted for as a purchase and provides for a tax-free exchange of approximately 517,000 shares of the Parent's stock for all of the outstanding shares of HII, and, accordingly, a portion of the purchase price will be allocated to net tangible and intangible assets acquired based on their estimated fair market values. The balance of the purchase price will be recorded as goodwill. The exchange ratio was calculated using the respective book values of the Company and HII. The tota action were based upon the final closing equity of HII at December 31, 1999. In connection with the transaction, certain key associates of HII executed employment agreements containing non-compete provisions and restrictions on the sale of the stock received in the merger and were awarded options in the Parent. As of its most recent completed fiscal year, September 24, 1999, HII recorded revenues of $15,845 and an operating loss of $1,691.
 
NOTE S - Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," which, after being amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," is effective for fiscal years beginning after June 15, 2000. This statement establishes accounting and reporting standards for derivative instruments a
 
Independent Auditor's Report
To the Board of Directors and Stockholders of
Stifel Financial Corp.
St. Louis, Missouri

We have audited the accompanying consolidated statements of financial condition of Stifel Financial Corp. and Subsidiaries (the "Company") as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Stifel Financial Corp. and Subsidiaries at December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Deloitte & Touche LLP

St. Louis, Missouri
March 10, 2000

 
Quarterly Results
Quarterly Operating Results (Unaudited)
(In thousands, except per share amounts) Revenue Earnings
Before
Income Taxes		 Net Income Basic Earnings
Per Share		 Diluted Earnings
Per Share
Year 1999 By Quarter  
First $37,017 $2,815 $1,787 $.26 $.25
Second $37,835 $3,405 $2,244 $.33 $.32
Third $35,513 $2,173 $1,431 $.22 $.21
Fourth $40,828 $2,580 $1,703 $.26 $.25
Year 1998 By Quarter  
First $35,839 $3,418 $2,053 $.30 $.29
Second $34,072 $2,100 $1,224 $.18 $.17
Third $34,259 $1,561 $967 $.14 $.13
Fourth $33,118 $1,510 $1,001 $.15 $.14
 
Five-Year Financial Summary
    Years Ended December 31,
 
  (In thousands, except per share amounts) 1999 1998 1997 1996 1995
Revenue Commissions $68,663 $56,729 $49,763 $43,900 $38,716
  Principal transactions  24,654  26,465  20,463  19,498  20,362
  Investment banking  11,507  15,763  28,476  16,253  12,121
  Interest  20,525  18,889  21,397  13,774  13,002
  Other  25,844  19,442  15,720  16,388  11,159
 
    151,193  137,288  135,819  109,813  95,360
Expenses Employee compensation and benefits $92,819 $86,967 $81,817 $66,765 $57,187
  Communications and office supplies   8,911   8,389   6,914   6,797   7,651
  Occupancy and equipment rental  11,819   9,549   8,109   7,958   8,512
  Interest  10,097   9,798  12,991   8,197   8,312
  Commissions and floor brokerage   2,838   2,804   2,780   2,641   2,319
  Other operating expenses  13,736  11,192  13,787  11,853  10,072
 
    140,220 128,699 126,398 104,211 94,053
  Income before income taxes 10,973 8,589 9,421 5,602 1,307
  Provision from income taxes 3,808 3,344 3,750 2,209  663
 
  Net Income $7,165 $5,245 $5,671 $3,393 $644
 
Per Share Data Basic earnings $ 1.08 $  .77 $ 1.01 $  .66 $  .13
  Dilured earnings $ 1.03 $  .73 $  .88 $  .59 $  .13
  Cash dividends $  .12 $  .12 $  .12 $  .09 $  .12
Other Data Total assets $453,110 $335,005 $315,484 $301,344 $226,75
  Long-term obligations $ 34,968 $ 20,570 $  9,600 $ 10,000 $ 10,760
  Stockholders' equity $ 59,059 $ 54,977 $ 50,081 $ 37,752 $ 34,795
  Net income as % average equity 12.55% 9.69% 13.29% 9.35% 1.87%
  Net income as % revenues  4.74% 3.82%  4.17% 3.09% 0.68%
  Average common shares and share equivalents
used in determining earnings per share:		          
         Basic 6,655 6,850 5,591 5,150 5,079
         Diluted 6,940 7,198 7,099 6,816 5,152

EX-21 3 - 1 - EXHIBIT 21 STIFEL FINANCIAL CORP. AND SUBSIDIARIES SUBSIDIARIES OF STIFEL FINANCIAL CORP. (1) ------------------------------------------ STATE OF NAMES UNDER WHICH NAME INCORPORATION SUBSIDIARY DOES BUSINESS - - ---- ------------- -------------------------- Stifel, Nicolaus & Missouri Stifel, Nicolaus & Company, Company, Incorporated Incorporated Alliance Realty Corp. Missouri Alliance Realty Corp. Century Securities Missouri Century Securities Associates, Inc. Associates, Inc. Stifel, Nicolaus Insurance Arkansas Stifel, Nicolaus Insurance Agency, Inc. (2) Agency, Inc. S-N Capital Corp. (2) Missouri S-N Capital Corp. Stifel Insurance Agency - Ohio Stifel Insurance Agency - Ohio, Inc. (4) Ohio, Inc. Stifel Venture Corp. Missouri Stifel Venture Corp. Pin Oak Capital, Ltd. (3) Missouri Pin Oak Capital, Ltd. Stifel Asset Management Corp. Missouri Stifel Asset Management Corp. Stifel CAPCO, L.L.C. Missouri Stifel CAPCO, L.L.C. Stifel CAPCO II, L.L.C. Missouri Stifel CAPCO II, L.L.C. (1) Does not include corporations in which registrant owns 50 percent or less of the stock. (2) Wholly owned subsidiary of Stifel, Nicolaus & Company, Incorporated. (3) Wholly owned subsidiary of Stifel Asset Management Corp. (4) Majority owned subsidiary of Stifel, Nicolaus & Company, Incorporated. EX-23 4 [Deloitte & Touche LLP letterhead] EXHIBIT 23 STIFEL FINANCIAL CORP. CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the registration statements of Stifel Financial Corp. and Subsidiaries on Form S-8 (file numbers 2-94326, 33-10030, 33-20568, 333-37805, 333-37807 and 333-84717) and on Form S-3 (file number 33-53699) of our report dated March 10, 2000, incorporated by reference in the Annual Report on Form 10-K of Stifel Financial Corp. for the year ended December 31, 1999. /s/ Deloitte & Touche LLP March 30, 2000 St. Louis, Missouri EX-27 5 1999 FINANCIAL DATA SCHEDULE
BD This schedule contains summary financial information extracted from the consolidated statement of financial condition dated December 31, 1999 and the statement of operations for the year ended December 31, 1999 and is qualified in its entirety by reference to such financial statements. 1,000 YEAR DEC-31-1999 JAN-01-1999 DEC-31-1999 17,042 329,975 0 33,029 28,690 7,597 453,110 122,950 91,074 0 143,023 2,036 34,968 1,107 0 0 57,952 453,110 24,654 20,525 68,663 11,507 1,711 10,097 92,819 10,973 10,973 0 0 7,165 1.03 1.08
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