ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of our company should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Annual Report on Form 10-K for the year ended December 31, 2025.
Unless otherwise indicated, the terms “we,” “us,” “our,” or “our company” in this report refer to Stifel Financial Corp. and its wholly owned subsidiaries.
Executive Summary
We operate as a financial services and bank holding company. We have built a diversified business serving private clients, institutional investors, and investment banking clients located across the U.S., Europe, and Canada. Our principal activities are: (i) private client services, including securities transaction and financial planning services; (ii) institutional equity and fixed income sales, trading, and research, and municipal finance; (iii) investment banking services, including mergers and acquisitions, public offerings, and private placements; and (iv) retail and commercial banking, including personal and commercial lending programs.
Our core philosophy is based upon a tradition of trust, understanding, and studied advice. We attract and retain experienced professionals by fostering a culture of entrepreneurial, long-term thinking. We provide our private, institutional, and corporate clients quality, personalized service, with the theory that if we place clients’ needs first, both our clients and our company will prosper. Our unwavering client and associate focus have earned us a reputation as one of the nation’s leading wealth management and investment banking firms. We have grown our business both organically and through opportunistic acquisitions.
We plan to maintain our focus on revenue growth with a continued appreciation for the development of quality client relationships. Within our private client business, our efforts will be focused on recruiting experienced financial advisors with established client relationships. Within our capital markets business, our focus continues to be on providing quality client management and product diversification. In executing our growth strategy, we will continue to seek out opportunities that allow us to take advantage of consolidation, whereby allowing us to increase market share in our private client and institutional group businesses.
Stifel Financial Corp., through its wholly owned subsidiaries, is principally engaged in retail brokerage; securities trading; investment banking; investment advisory; retail, consumer, and commercial banking; and related financial services. Our major geographic area of concentration is throughout the United States, the United Kingdom, Europe, and Canada. Our principal customers are individual investors, corporations, municipalities, and institutions.
Our ability to attract and retain highly skilled and productive associates is critical to the success of our business. Accordingly, compensation and benefits comprise the largest component of our expenses, and our performance is dependent upon our ability to attract, develop, and retain highly skilled associates who are motivated and committed to providing the highest quality of service and guidance to our clients.
On April 7, 2025, the Company acquired a portion of B. Riley Financial, Inc.’s traditional wealth management business, a deal that added 36 advisors with approximately $4 billion in assets under management. Consideration for this transaction consisted of cash from operations.
On June 2, 2025, the Company acquired Bryan, Garnier & Co. (“Bryan Garnier”), an independent full-service investment bank focused on European technology and healthcare companies. Bryan Garnier’s product suite includes mergers & acquisitions advisory, private and public growth financing solutions, and institutional sales and execution. Bryan Garnier is headquartered in Europe with offices in Paris, London, Amsterdam, Munich, Oslo, Stockholm, and New York. Consideration for this transaction consisted of cash from operations.
On January 26, 2026, our Board declared a 50% stock dividend, in the form of a three-for-two stock split, of our common stock payable on February 26, 2026, to shareholders of record as of February 12, 2026. Trading will begin on a split-adjusted basis on February 27, 2026. On January 30, 2026, the Company had approximately 103.2 million shares outstanding. After the split, the Company will have approximately 154.8 million shares outstanding.
On February 2, 2026, the Company sold Stifel Independent Advisors, LLC, a wholly owned subsidiary and independent contractor broker-dealer, to an affiliate of Equitable, a financial services organization and principal franchise of Equitable Holdings, Inc.
Results for the Year Ended December 31, 2025
For the year ended December 31, 2025, net revenues increased 11.3% to a record $5.53 billion compared to $4.97 billion during the comparable period in 2024. Net income available to common shareholders for the year ended December 31, 2025, decreased 6.9% to $646.5 million, or $5.87 per diluted common share, compared to $694.1 million, or $6.25 per diluted common share, in 2024. Net income available to common shareholders for the year ended December 31, 2025, was negatively impacted by elevated provisions for legal matters of $1.16 per diluted common share (after-tax) related to a FINRA Arbitration Panel decision in the first quarter.
Our revenue growth for the year ended December 31, 2025, was primarily attributable to higher investment banking revenues, asset management revenues, transactional revenues, and net interest income. For the year ended December 31, 2025, our Global Wealth Management segment posted record net revenues, with our Institutional Group segment posting its second highest net revenues.
We remain well-positioned entering fiscal 2026, with nearly $552 billion of client assets under administration, strong activity levels for financial advisory recruiting, a significant interest rate-sensitive asset base at our bank subsidiaries, and a strong investment banking pipeline. We expect wealth management revenues to grow as investors continue to redeploy cash into the markets and client assets grow through recruiting and market appreciation. Institutional revenues are expected to benefit from increased investment banking activity as well as continued growth in transactional revenues, particularly in the fixed income business.
Economic and Market Conditions
Results in the businesses in which we operate are highly correlated to general economic conditions and, more specifically, to the direction of the U.S. equity and fixed income markets. Market volatility, overall market conditions, interest rates, economic, political, and regulatory trends, and industry competition are among the factors which could affect us and which are unpredictable and beyond our control. These factors affect the financial decisions made by market participants who include investors and competitors, impacting their level of participation in the financial markets. In addition, in periods of reduced financial market activity, profitability is likely to be adversely affected because certain expenses remain relatively fixed, including salaries and related costs, as well as portions of communications costs and occupancy expenses. Accordingly, earnings for any period should not be considered representative of earnings to be expected for any other period.
Overall, 2026 is expected to be a year of continued economic growth, stable interest rates, and opportunities in credit markets. The U.S. economy is expected to continue its robust growth trajectory, potentially accelerating above 3% supported by tax cuts, AI spending, and deregulation. Risks to inflation are seen as more on the upside than the downside, with the Federal Reserve likely to maintain a ‘hold’ stance on interest rates after the December 2025 rate cut. Longer-dated bond yields are expected to trade in a range, reflecting what are considered normal levels of interest rates. Global credit markets are expected to continue outperforming, driven by a focus on carry (yield) rather than capital gains. Corporate bonds are likely to outperform government bonds and cash. For more information on economic and market conditions, and the potential effects of geopolitical events on our future results, refer to “Item 1A – Risk Factors” of this Form 10-K.
New Tax Legislation
On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law in the U.S., which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and repeal of non-U.S. corporations’ fiscal year-end. Some impacts of the OBBBA will not be realized until 2026 and forward, such as revisions to the international tax framework.
The Company elected to expense its domestic research and development expenditures and take 100% bonus depreciation for qualified assets for U.S. tax purposes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury.
Interest Rate Environment
During the fourth quarter of 2025, the Federal Reserve announced a 25-basis-point reduction in the federal funds rate target range to 3.50% to 3.75%, as the labor market shows signs of softening while acknowledging inflation and economic outlook uncertainty remain somewhat elevated. In addition, the Federal Reserve ended the balance sheet reduction program, which began in 2022, effective December 1, 2025.
During the January meeting, the Federal Reserve voted to hold the target range for the federal funds rate at 3.50% to 3.75%. The Federal Reserve noted that it will continue to monitor economic data and adjust its stance on monetary policy if risks emerge that could negatively impact the attainment of its goal of maximum employment and inflation at 2% over the long term.
Potential decreases to the federal funds rate may impact our interest-based revenues. While decreases in interest rates will lower fees the Company earns from FDIC-insured deposits of clients through a program offered by the Company, such decreases may be offset to a degree if the cash sweep balances increase as clients find fewer higher-yielding alternatives to deploy these balances. Future rate decreases will also reduce the rates the Company charges on customer margin loans, which will have a negative impact on our earnings.
RESULTS OF OPERATIONS
The following table presents consolidated financial information for the periods indicated (in thousands, except percentages) :
For the Year Ended December 31,
Percentage
Change
As a Percentage of
Net Revenues
for the Year Ended
December 31,
Revenues:
Commissions
Principal transactions
Investment banking
Asset management
Interest
Other income
Total revenues
Interest expense
Net revenues
Non-interest expenses:
Compensation and benefits
Occupancy and equipment rental
Communication and office supplies
Commissions and floor brokerage
Provision for credit losses
Other operating expenses
Total non-interest expenses
Income before income taxes
Provision for income taxes
Net income
Preferred dividends
Net income available to common shareholders
NET REVENUES
The following table presents consolidated net revenues for the periods indicated (in thousands, except percentages) :
For the Year Ended December 31,
Percentage Change
Revenues:
Commissions
Principal transactions
Transactional revenues
Capital raising
Advisory
Investment banking
Asset management
Net interest
Other income
Total net revenues
Year Ended December 31, 2025, Compared With Year Ended December 31, 2024
For the year ended December 31, 2025, net revenues increased 11.3% to a record $5.53 billion from $4.97 billion in 2024. The increase was primarily attributable to higher investment banking, asset management, transactional revenues, and net interest income.
Commissions – Commission revenues are primarily generated from agency transactions in OTC and listed equity securities, insurance products, and options. In addition, commission revenues also include distribution fees for promoting and distributing mutual funds.
For the year ended December 31, 2025, commission revenues increased 7.6% to $813.6 million from $756.0 million in 2024. The increase is primarily attributable to higher volumes due to increased market volatility over the comparable period in 2024.
Principal transactions – Principal transaction revenues are gains and losses on secondary trading, principally fixed income transactional revenues.
For the year ended December 31, 2025, principal transactions revenues increased 6.7% to $645.3 million from $604.6 million in 2024. The increase is primarily attributable to higher realized trading gains and increased client activity over the comparable period in 2024.
Investment banking – Investment banking revenues include: (i) capital-raising revenues representing fees earned from the underwriting of debt and equity securities, and (ii) advisory fees related to corporate debt and equity offerings, municipal debt offerings, merger and acquisitions, private placements, and other investment banking advisory fees.
For the year ended December 31, 2025, investment banking revenues increased 25.7% to $1.3 billion from $994.8 million in 2024.
For the year ended December 31, 2025, capital-raising revenues increased 26.7% to $528.7 million from $417.4 million in 2024. For the year ended December 31, 2025, equity capital-raising revenues increased 41.4% to $280.7 million from $198.5 million in 2024 driven by higher volumes during 2025. For the year ended December 31, 2025, fixed income capital-raising revenues increased 13.3% to $248.0 million from $218.9 million in 2024 driven by higher bond issuances reflecting a more favorable financing environment during 2025.
For the year ended December 31, 2025, advisory revenues increased 25.0% to $722.0 million from $577.4 million in 2024. The increase is primarily attributable to higher levels of completed advisory transactions during 2025 with continued growth in depository advisory transactions.
Asset management – Asset management revenues include fees for asset-based financial services provided to individuals and institutional clients. Investment advisory fees are charged based on the value of assets in fee-based accounts. Asset management revenues are affected by changes in the balances of client assets due to market fluctuations and levels of net new client assets.
For the year ended December 31, 2025, asset management revenues increased 10.7% to a record $1.70 billion from $1.54 billion in 2024. The increase is primarily attributable to market appreciation leading to higher asset values due to improved market conditions and net new asset growth. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.
Other income – For the year ended December 31, 2025, other income decreased 21.3% to $33.9 million from $43.1 million during 2024. The decrease is primarily attributable to reduced lease income generated from our aircraft engine leasing business due to the sale of engines, lower investment gains, and a decrease in mortgage loan origination fees from the comparable period in 2024.
Year Ended December 31, 2024, Compared With Year Ended December 31, 2023
For the year ended December 31, 2024, net revenues increased 14.3% to $4.97 billion from $4.35 billion in 2023. The increase was primarily attributable to higher investment banking, asset management, and transactional revenues, partially offset by lower net interest income.
Commissions – For the year ended December 31, 2024, commission revenues increased 12.2% to $756.0 million from $673.6 million in 2023.
Principal transactions – For the year ended December 31, 2024, principal transactions revenues increased 23.3% to $604.6 million from $490.4 million in 2023.
Investment banking – For the year ended December 31, 2024, investment banking revenues increased 36.0% to $994.8 million from $731.3 million in 2023.
For the year ended December 31, 2024, capital-raising revenues increased 57.1% to $417.4 million from $265.7 million in 2023. For the year ended December 31, 2024, equity capital-raising revenues increased 73.2% to $198.5 million from $114.6 million in 2023 driven by higher volumes during 2024. For the year ended December 31, 2024, fixed income capital-raising revenues increased 44.9% to $218.9 million from $151.1 million in 2023 driven by higher bond issuances during 2024.
For the year ended December 31, 2024, advisory revenues increased 24.0% to $577.4 million from $465.6 million in 2023. The increase is primarily attributable to higher levels of completed advisory transactions during 2024.
Asset management – For the year ended December 31, 2024, asset management revenues increased 18.3% to $1.54 billion from $1.30 billion in 2023. The increase is primarily attributable to market appreciation leading to higher asset values and net cash inflows primarily as a result of our recruiting efforts. Please refer to “Asset management” in the Global Wealth Management segment discussion for information on the changes in asset management revenues.
Other income – For the year ended December 31, 2024, other income increased 393.1% to $43.1 million from $8.7 million in 2023. The increase is primarily attributable to higher investment gains over the comparable period in 2023.
NET INTEREST INCOME
I. Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential
The following tables present average balance data and operating interest revenue and expense data, as well as related interest yields for the periods indicated (in thousands, except rates) :
For the Year Ended
December 31, 2025
December 31, 2024
December 31, 2023
Average
Balance
Interest
Income/
Expense
Average
Interest
Rate
Average
Balance
Interest
Income/
Expense
Average
Interest
Rate
Average
Balance
Interest
Income/
Expense
Average
Interest
Rate
Interest-earning assets:
Interest-bearing cash and federal funds sold
Financial instruments owned
Margin balances
Investments:
Asset-backed securities
Mortgage-backed securities
Corporate fixed income securities
Other
Total investments
Loans:
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Loans held for sale
Other
Total loans
Other interest-earning assets
Total interest-earning assets/interest income
Interest-bearing liabilities:
Short-term borrowings
Stock loan
Senior notes
Stifel Capital Trusts
Deposits:
Money market
Demand deposits
Time deposits
Savings
Total deposits
Federal Home Loan Bank advances
Other interest-bearing liabilities
Total interest-bearing liabilities/interest expense
Net interest income/margin
The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the periods indicated (in thousands) :
Year Ended December 31, 2025
Compared to Year Ended
December 31, 2024
Year Ended December 31, 2024
Compared to Year Ended
December 31, 2023
Increase (decrease) due to:
Increase (decrease) due to:
Volume
Rate
Total
Volume
Rate
Total
Interest income:
Interest-bearing cash and federal funds sold
Financial instruments owned
Margin balances
Investments:
Asset-backed securities
Mortgage-backed securities
Corporate fixed income securities
Other
Loans:
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Loans held for sale
Other
Other interest-earning assets
Interest expense:
Short-term borrowings
Stock loan
Senior notes
Stifel Capital Trusts
Deposits:
Money market
Demand deposits
Time deposits
Savings
Federal Home Loan Bank advances
Other interest-bearing liabilities
Increases and decreases in interest revenue and interest expense result from changes in average balances (volume) of interest-earning bank assets and liabilities, as well as changes in average interest rates. The effect of changes in volume is determined by multiplying the change in volume by the previous year’s average yield/cost. Similarly, the effect of rate changes is calculated by multiplying the change in average yield/cost by the previous year’s volume. Changes applicable to both volume and rate have been allocated proportionately.
Year Ended December 31, 2025, Compared With Year Ended December 31, 2024
Net interest income – Net interest income is the difference between interest earned on interest-earning assets and interest paid on funding sources. Net interest income is affected by changes in the volume and mix of these assets and liabilities, as well as by fluctuations in interest rates and portfolio management strategies. For the year ended December 31, 2025, net interest income increased 4.9% to $1.09 billion from $1.04 billion in 2024.
For the year ended December 31, 2025, interest revenue decreased 5.6% to $1.90 billion from $2.02 billion in 2024, principally as a result of lower interest rates, partially offset by an increase in interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $31.2 billion during the year ended December 31, 2025, compared to $30.1 billion in 2024 at average interest rates of 5.59% and 6.14%, respectively.
For the year ended December 31, 2025, interest expense decreased 16.7% to $817.8 million from $981.4 million in 2024. The decrease is primarily attributable to lower interest rates, partially offset by higher interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $28.8 billion during the year ended December 31, 2025, compared to $27.7 billion in 2024 at average interest rates of 2.59% and 3.23%, respectively.
Year Ended December 31, 2024, Compared With Year Ended December 31, 2023
Net interest income – For the year ended December 31, 2024, net interest income decreased 9.6% to $1.0 billion from $1.1 billion in 2023.
For the year ended December 31, 2024, interest revenue increased 3.1% to $2.02 billion from $1.96 billion in 2023, principally as a result of higher interest rates and an increase in interest-earning assets. The average interest-earning assets of Stifel Bancorp increased to $30.1 billion during the year ended December 31, 2024, compared to $29.9 billion in 2023 at average interest rates of 6.14% and 6.01%, respectively.
For the year ended December 31, 2024, interest expense increased 21.1% to $981.4 million from $810.3 million in 2023. The increase is primarily attributable to higher interest rates and higher interest-bearing liabilities. The average interest-bearing liabilities of Stifel Bancorp increased to $27.7 billion during the year ended December 31, 2024, compared to $27.3 billion in 2023 at average interest rates of 3.23% and 2.66%, respectively.
II. Investment in Debt Securities
The maturities and related weighted-average yields of our debt securities not carried at fair value at December 31, 2025, are as follows (in thousands, except rates) :
Within 1
Year
1-5 Years
5-10 Years
After 10 Years
Total
Asset-backed securities
Weighted-average yield (1)
The weighted-average yield is computed using the expected maturity of each security weighted based on the amortized cost of each security.
III. Loan Portfolio
The following table presents the maturities of each major loan category in Stifel Bancorp’s loan portfolio held for investment for the periods indicated (in thousands) :
Within 1 Year
1-5 Years
5-15 years
Over 15 Years
Total
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
The sensitivity of loans with maturities in excess of one year at December 31, 2025, is as follows (in thousands) :
Variable or adjusted-rate loans
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Fixed-rate loans
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
The following table presents the Company’s credit ratios, as well as the component of the ratio’s calculation, for the periods indicated (in thousands, except percentages) :
As of and for the year ending December 31,
Allowance for credit losses to total loans outstanding
Allowance for credit losses
Loans held for investment
Nonaccrual loans to total loans outstanding
Nonaccrual loans
Loans held for investment
Allowance for credit losses to nonaccrual loans
Allowance for credit losses
Nonaccrual loans
The following table presents net charge-offs to average loans outstanding by major loan category for the year ended December 31, 2025 (in thousands, except percentages) :
Residential real estate
Net charge-off during the period
Average amount outstanding
Commercial and industrial
Net charge-off during the period
Average amount outstanding
Fund banking
Net charge-off during the period
Average amount outstanding
Securities-based loans
Net charge-off during the period
Average amount outstanding
Construction and land
Net charge-off during the period
Average amount outstanding
Commercial real estate
Net charge-off during the period
Average amount outstanding
Home equity lines of credit
Net charge-off during the period
Average amount outstanding
Other
Net charge-off during the period
Average amount outstanding
Total loans held for investment
Net charge-off during the period
Average amount outstanding
Allocation of the Allowance for Credit Losses
The following is a breakdown of the allowance for credit losses by each major loan category at December 31, 2025 and 2024 (in thousands, except rates) :
December 31, 2025
December 31, 2024
Balance
Percent (1)
Balance
Percent (1)
Commercial and industrial
Residential real estate
Construction and land
Fund banking
Commercial real estate
Securities-based loans
Home equity lines of credit
Other
Loan category as a percentage of total loan portfolio.
When principal or interest becomes 90 days past due or when collection becomes uncertain, the accrual of interest and amortization of deferred loan origination fees is generally discontinued (“nonaccrual status”) and any accrued and unpaid interest income is reversed.
Please refer to the section entitled “Critical Accounting Policies and Estimates” herein regarding our policies for establishing credit loss reserves, including placing loans on nonaccrual status.
IV. Deposits
Deposits consist of money market and savings accounts, certificates of deposit, and demand deposits. The average balances of deposits and the associated weighted-average interest rates for the periods indicated are as follows (in thousands, except percentages) :
December 31, 2025
December 31, 2024
December 31, 2023
Average
Balance
Average
Interest
Rate
Average
Balance
Average
Interest
Rate
Average
Balance
Average
Interest
Rate
Non-interest bearing demand deposits
Interest-bearing demand deposits
Money market and savings deposits
Time deposits
Other
* Not applicable.
As of December 31, 2025 and 2024, we estimate that approximately $4.9 billion and $5.4 billion, respectively, of our deposit portfolio was uninsured. The uninsured amounts are estimates based on methodologies and assumptions used by our company in accordance with regulatory reporting requirements. At December 31, 2025, there were no time deposits that exceeded the FDIC-insured limit.
NON-INTEREST EXPENSES
The following table presents consolidated non-interest expenses for the periods indicated (in thousands, except percentages) :
For the Year Ended December 31,
Percentage Change
Non-interest expenses:
Compensation and benefits
Occupancy and equipment rental
Communications and office supplies
Commissions and floor brokerage
Provision for credit losses
Other operating expenses
Total non-interest expenses
Year Ended December 31, 2025, Compared With Year Ended December 31, 2024
Compensation and benefits – Compensation and benefits expenses, which are the largest component of our expenses, include salaries, bonuses, transition pay, benefits, amortization of stock-based compensation, employment taxes, and other associate-related costs. A significant portion of compensation expense is comprised of production-based variable compensation, including discretionary bonuses, which fluctuates in proportion to the level of business activity, increasing with higher revenues and operating profits. Other compensation costs, including base salaries, stock-based compensation amortization, and benefits, are more fixed in nature.
For the year ended December 31, 2025, compensation and benefits expense increased 12.2% to $3.27 billion from $2.92 billion in 2024. Compensation and benefits expense as a percentage of net revenues was 59.2% for the year ended December 31, 2025, compared to 58.7% for the year ended December 31, 2024. The increase is primarily attributable to higher variable compensation costs during 2025.
Occupancy and equipment rental – For the year ended December 31, 2025, occupancy and equipment rental expense increased 5.5% to $382.3 million from $362.4 million in 2024. The increase is primarily attributable to higher data processing and occupancy costs associated with the continued investments made in our business.
Communications and office supplies – Communications expense includes costs for telecommunication and data transmission, primarily for obtaining third-party market data information. For the year ended December 31, 2025, communications and office supplies expense increased 1.0% to $196.3 million from $194.4 million in 2024. The increase is primarily attributable to higher communication and quote equipment expenses associated with the continued investments made in our business, partially offset by lower internet costs.
Commissions and floor brokerage – For the year ended December 31, 2025, commissions and floor brokerage expense increased 5.3% to $66.2 million from $62.8 million in 2024. The increase is primarily attributable to higher electronic communication network (“ECN”) trading costs, processing expenses, and trading and clearing costs.
Provision for credit losses – For the year ended December 31, 2025, provision for credit losses increased 51.2% to $38.4 million from $25.4 million in 2024. Provision for credit losses was primarily impacted by overall loan growth in the loan portfolio and specific reserves on individual credits.
Other operating expenses – Other operating expenses primarily include license and registration fees, litigation-related expenses, which consist of amounts we accrue and/or pay out for legal and regulatory matters, travel and entertainment, promotional, investment banking deal costs, and professional service expenses.
For the year ended December 31, 2025, other operating expenses increased 46.3% to $703.3 million from $480.6 million in 2024. The increase is primarily attributable to higher legal-related expenses, investment banking expenses, amortization of identifiable intangible assets, advertising, travel and conference-related expenses, professional fees, subscriptions, insurance expenses, and licensing fees. During the first quarter of 2025, we recorded $180.0 million related to provisions for legal and regulatory matters.
Provision for income taxes – For the year ended December 31, 2025, our provision for income taxes was $187.4 million, representing an effective tax rate of 21.5%, compared to $197.1 million in 2024, representing an effective tax rate of 21.2%. The effective tax rate in 2025 was impacted by the benefit related to the tax impact on stock-based compensation.
Year Ended December 31, 2024, Compared With Year Ended December 31, 2023
Except as noted in the following discussion of variances, the underlying reasons for the increase in non-interest expenses can be attributed principally to our continued expansion, both organically and through our acquisitions, and increased administrative overhead to support the growth in our segments.
Compensation and benefits – For the year ended December 31, 2024, compensation and benefits expense increased 14.2% to $2.92 billion from $2.55 billion in 2023. The increase in compensation and benefits expenses is primarily attributable to higher variable compensation expense. Compensation and benefits expense as a percentage of net revenues of 58.7% for the year ended December 31, 2024, was consistent with the comparable period in 2023.
Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 6.8% to $362.4 million from $339.3 million in 2023. The increase is primarily attributable to higher data processing and occupancy costs associated with the continued investments made in our business.
Communications and office supplies – For the year ended December 31, 2024, communications and office supplies expense increased 5.3% to $194.4 million from $184.7 million in 2023. The increase is primarily attributable to higher communication and quote equipment expenses associated with the continued investments made in our business.
Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage expense increased 7.7% to $62.8 million from $58.3 million in 2023. The increase is primarily attributable to higher clearing expense and ECN trading costs and processing expenses.
Provision for credit losses – For the year ended December 31, 2024, provision for credit losses increased 1.6% to $25.4 million from $25.0 million in 2023. Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.
Other operating expenses – For the year ended December 31, 2024, other operating expenses increased 0.1% to $480.6 million from $480.4 million in 2023. The increase is primarily attributable to higher investment banking transaction expense, professional fees, advertising, conference-related expenses, and subscriptions, partially offset by lower litigation-related expenses. During the year ended December 31, 2023, we recorded $67 million related to provisions for legal and regulatory matters.
Provision for income taxes – For the year ended December 31, 2024, our provision for income taxes was $197.1 million, representing an effective tax rate of 21.2%, compared to $184.2 million in 2023, representing an effective tax rate of 26.1%. The effective tax rate in 2024 was impacted by the benefit related to the tax impact on stock-based compensation.
SEGMENT ANALYSIS
Our reportable segments include Global Wealth Management, Institutional Group, and Other.
Our Global Wealth Management segment consists of two businesses, the Private Client Group and Stifel Bancorp. The Private Client Group includes branch offices and independent contractor offices of our broker-dealer subsidiaries located throughout the United States. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, as well as offering banking products to their private clients through Stifel Bancorp, which provides residential, consumer, and commercial lending, as well as FDIC-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.
The success of our Global Wealth Management segment is dependent upon the quality of our products, services, financial advisors, and support personnel, including our ability to attract, retain, and motivate a sufficient number of these associates. We face competition for qualified associates from major financial services companies, including other brokerage firms, insurance companies, banking institutions, and discount brokerage firms. Segment net revenues and operating income are used to evaluate and measure segment performance by management in assessing performance and deciding how to allocate resources.
The Institutional Group segment includes institutional sales and trading. It provides securities brokerage, trading, and research services to institutions with an emphasis on the sale of equity and fixed income products. This segment also includes the management of and participation in underwritings for both corporate and public finance (exclusive of sales credits generated through the Private Client Group, which are included in the Global Wealth Management segment), merger and acquisition, and financial advisory services.
The success of our Institutional Group segment is dependent upon the quality of our personnel, the quality and selection of our investment products and services, pricing (such as execution pricing and fee levels), and reputation. Segment net revenues and operating income are used to evaluate and measure segment performance by management in assessing performance and deciding how to allocate resources.
The Other segment includes interest income and expense from stock borrow activities, unallocated interest expense, interest income and gains and losses from investments held, amortization of stock-based awards, and all unallocated overhead cost associated with the execution of orders; processing of securities transactions; custody of client securities; receipt, identification, and delivery of funds and securities; compliance with regulatory and legal requirements; internal financial accounting and controls; and general administration and acquisition charges.
Results of Operations – Global Wealth Management
The following table presents consolidated financial information for the Global Wealth Management segment for the periods indicated (in thousands, except percentages) :
For the Year Ended December 31,
Percentage
Change
As a Percentage of
Net Revenues
for the Year Ended
December 31,
Revenues:
Commissions
Principal transactions
Transactional revenues
Asset management
Interest
Investment banking
Other income
Total revenues
Interest expense
Net revenues
Non-interest expenses:
Compensation and benefits
Occupancy and equipment rental
Communication and office supplies
Commissions and floor brokerage
Provision for credit losses
Other operating expenses
Total non-interest expenses
Income before income taxes
Year Ended December 31, 2025, Compared With Year Ended December 31, 2024
NET REVENUES
For the year ended December 31, 2025, Global Wealth Management net revenues increased 7.7% to a record $3.54 billion from $3.28 billion in 2024. The increase in net revenues is primarily attributable to higher asset management revenues, net interest income, commission revenues, and investment banking revenues, partially offset by lower principal transactions revenues.
Commissions – For the year ended December 31, 2025, commission revenues increased 5.9% to $538.7 million from $508.7 million in 2024. The increase is primarily attributable to higher volumes due to increased market volatility over 2024.
Principal transactions – For the year ended December 31, 2025, principal transactions revenues decreased 1.4% to $240.1 million from $243.6 million in 2024. The decrease is primarily attributable to lower realized trading gains and decreased client activity over 2024.
Asset management – For the year ended December 31, 2025, asset management revenues increased 10.7% to a record $1.70 billion from $1.54 billion in 2024. The increase is primarily attributable to higher asset values due to improved market conditions and net new asset growth. Fee-based account revenues are primarily billed based on asset values at the end of the prior quarter.
Client asset metrics as of the periods indicated (in thousands, except for number of accounts) :
December 31,
Percentage Change
Client assets
Fee-based client assets
Number of client accounts
Number of fee-based client accounts
The increase in the value of our client assets and fee-based assets was primarily attributable to improved market conditions and asset growth resulting from our recruiting efforts.
Interest revenue – For the year ended December 31, 2025, interest revenue decreased 5.0% to $1.81 billion from $1.91 billion in 2024. The decrease is primarily attributable to lower interest rates, partially offset by higher interest-earning assets. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table for additional information on average balances and interest income.
Investment banking – Investment banking, which represents sales credits for investment banking underwritings, increased 25.7% to $27.0 million for the year ended December 31, 2025, from $21.5 million in 2024. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in investment banking revenues.
Other income – For the year ended December 31, 2025, other income increased 98.4% to $12.2 million from $6.1 million in 2024. The increase is primarily attributable to an increase in investment gains over 2024, partially offset by a decrease in mortgage loan origination fees.
Interest expense – For the year ended December 31, 2025, interest expense decreased 15.6% to $795.8 million from $942.8 million in 2024. The decrease in interest expense is primarily attributable to lower interest rates, partially offset by higher interest-bearing liabilities. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table for additional information on average balances and interest expense.
NON-INTEREST EXPENSES
For the year ended December 31, 2025, Global Wealth Management non-interest expenses increased 17.1% to $2.43 billion from $2.08 billion in 2024.
Compensation and benefits – For the year ended December 31, 2025, compensation and benefits expense increased 9.2% to $1.75 billion from $1.61 billion in 2024. Compensation and benefits expense as a percentage of net revenues was 49.5% for the year ended December 31, 2025, compared to 48.9% in 2024. The increase is primarily attributable to increased variable compensation costs over 2024.
Occupancy and equipment rental – For the year ended December 31, 2025, occupancy and equipment rental expense increased 5.0% to $184.1 million from $175.4 million in 2024. The increase is primarily attributable to higher data processing, occupancy, and furniture and equipment costs associated with an increase in business activity.
Communications and office supplies – For the year ended December 31, 2025, communications and office supplies expense increased 1.3% to $66.2 million from $65.4 million in 2024. The increase is primarily attributable to higher postage and shipping expenses and communication and quote equipment expenses associated with the continued growth of our business, partially offset by lower internet costs.
Commissions and floor brokerage – For the year ended December 31, 2025, commissions and floor brokerage expense increased 8.8% to $29.6 million from $27.2 million in 2024. The increase is primarily attributable to higher processing fees and clearing expenses.
Provision for credit losses – For the year ended December 31, 2025, provision for credit losses increased 53.0% to $38.4 million from $25.1 million in 2024. Provision for credit losses was primarily impacted by overall loan growth in the loan portfolio and specific reserves on individual credits.
Other operating expenses – For the year ended December 31, 2025, other operating expenses increased 103.0% to $361.1 million from $177.8 million in 2024. The increase is primarily attributable to increases in litigation-related expense, subscription expense, travel and conference-related expenses, bank service charges, and insurance expense. During the first quarter of 2025, we recorded $180.0 million related to provisions for legal-related matters.
INCOME BEFORE INCOME TAXES
For the year ended December 31, 2025, income before income taxes decreased 8.5% to $1.11 billion from $1.21 billion in 2024. Profit margins (income before income taxes as a percent of net revenues) have decreased to 31.2% for the year ended December 31, 2025, from 36.8% in 2024. The profit margin was negatively impacted by elevated reserves for legal matters and higher provisions for credit losses.
Year Ended December 31, 2024, Compared With Year Ended December 31, 2023
NET REVENUES
For the year ended December 31, 2024, Global Wealth Management net revenues increased 7.7% to $3.3 billion from $3.0 billion in 2023. The increase in net revenues is primarily attributable to increases in asset management revenues and transactional revenues, partially offset by lower net interest income.
Commissions – For the year ended December 31, 2024, commission revenues increased 14.3% to $508.7 million from $444.9 million in 2023. The increase is primarily attributable to an increase in equities trading and mutual funds revenue.
Principal transactions – For the year ended December 31, 2024, principal transactions revenues increased 16.4% to $243.6 million from $209.3 million in 2023 as a result of an increase in client activity.
Asset management – For the year ended December 31, 2024, asset management revenues increased 18.2% to $1.54 billion from $1.30 billion in 2023. The increase is primarily attributable to higher asset values and strong fee-based asset flows. Fee-based account revenues are primarily billed based on asset values at the end of the prior quarter.
The value of assets in fee-based accounts at December 31, 2024, increased 16.6% to $192.7 billion from $165.3 billion at December 31, 2023.
Interest revenue – For the year ended December 31, 2024, interest revenue increased 2.6% to $1.91 billion from $1.86 billion in 2023. The increase is primarily attributable to higher interest-earning assets and higher interest rates. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table for additional information on average balances and interest income.
Investment banking – Investment banking increased 28.7% to $21.5 million for the year ended December 31, 2024, from $16.7 million in 2023. Please refer to “Investment banking” in the Institutional Group segment discussion for information on the changes in investment banking revenues.
Other income – For the year ended December 31, 2024, other income increased 188.3% to $6.1 million from a loss of $6.9 million in 2023. The increase is primarily attributable to an increase in investment gains over 2023.
Interest expense – For the year ended December 31, 2024, interest expense increased 21.6% to $942.8 million from $775.2 million in 2023. The increase in interest expense is primarily attributable to higher interest rates and higher interest-bearing liabilities. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table for additional information on average balances and interest expense.
NON-INTEREST EXPENSES
For the year ended December 31, 2024, Global Wealth Management non-interest expenses increased 13.2% to $2.08 billion from $1.83 billion in 2023.
Compensation and benefits – For the year ended December 31, 2024, compensation and benefits expense increased 13.4% to $1.61 billion from $1.42 billion in 2023. The increase is primarily attributable to increased variable compensation from our continued recruiting efforts.
Compensation and benefits expense as a percentage of net revenues was 48.9% for the year ended December 31, 2024, compared to 46.4% in 2023. The increase is primarily as a result of the revenue mix across the segment.
Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 5.8% to $175.4 million from $165.8 million in 2023. The increase is primarily attributable to higher data processing, occupancy, and furniture and equipment costs associated with an increase in business activity.
Communications and office supplies – For the year ended December 31, 2024, communications and office supplies expense increased 3.2% to $65.4 million from $63.3 million in 2023. The increase is primarily attributable to higher postage and shipping expenses and communication and quote equipment expenses associated with the continued growth of our business, partially offset by lower internet costs.
Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage expense increased 6.7% to $27.2 million from $25.5 million in 2023. The increase is primarily attributable to higher clearing expenses.
Provision for credit losses – For the year ended December 31, 2024, provision for credit losses increased 10.6% to $25.1 million from $22.7 million in 2023. Provision for credit losses was primarily impacted by loan growth and a deterioration in certain loans, partially offset by a slightly better macroeconomic forecast.
Other operating expenses – For the year ended December 31, 2024, other operating expenses increased 25.5% to $177.8 million from $141.7 million in 2023. The increase is primarily attributable to increases in litigation-related expense, professional fees, subscription expense, and travel and conference-related expenses, partially offset by lower insurance expense and bank service charges.
INCOME BEFORE INCOME TAXES
For the year ended December 31, 2024, income before income taxes decreased 0.6% to $1.21 billion from $1.22 billion in 2023. Profit margins (income before income taxes as a percent of net revenues) decreased to 36.8% for the year ended December 31, 2024, from 39.9% in 2023. The profit margin was impacted by an increase in litigation-related expenses and provision for credit losses, as well as a change in the composition of revenue (lower net interest income).
Results of Operations – Institutional Group
The following table presents consolidated financial information for the Institutional Group segment for the periods indicated (in thousands, except percentages) :
For the Year Ended December 31,
Percentage
Change
As a Percentage of
Net Revenues
for the Year Ended
December 31,
Revenues:
Commissions
Principal transactions
Transactional revenues
Capital raising
Advisory
Investment banking
Interest
Other income (1)
Total revenues
Interest expense
Net revenues
Non-interest expenses:
Compensation and benefits
Occupancy and equipment rental
Communication and office supplies
Commissions and floor brokerage
Other operating expenses
Total non-interest expenses
Income before income taxes
Includes asset management revenues.
Year Ended December 31, 2025, Compared With Year Ended December 31, 2024
NET REVENUES
For the year ended December 31, 2025, Institutional Group net revenues increased 20.2% to $1.9 billion from $1.6 billion in 2024. The increase in net revenues is primarily attributable to higher advisory revenues, capital-raising revenues, and transactional revenues.
Transactional revenues – For the year ended December 31, 2025, transactional revenues increased 11.8% to $680.2 million from $608.2 million in 2024.
For the year ended December 31, 2025, fixed income transactional revenues increased 11.4% to $437.8 million from $393.0 million in 2024. The increase in fixed income transactional revenues is primarily attributable to increased activity as a result of market volatility and higher trading gains.
For the year ended December 31, 2025, equity transactional revenues increased 12.6% to $242.3 million from $215.2 million in 2024. The increase in equity transactional revenues is primarily attributable to higher equities trading commissions.
Investment banking – For the year ended December 31, 2025, investment banking revenues increased 25.7% to $1.2 billion from $973.4 million in 2024.
For the year ended December 31, 2025, capital-raising revenues increased 27.1% to $503.1 million from $395.9 million in 2024.
For the year ended December 31, 2025, equity capital-raising revenues increased 44.1% to $269.3 million from $186.9 million in 2024. The increase is primarily attributable to higher volumes as clients actively engaged in capital-raising opportunities in a more constructive market environment.
For the year ended December 31, 2025, fixed income capital-raising revenues increased 11.9% to $233.8 million from $209.0 million in 2024. The increase is primarily attributable to higher bond issuances reflecting a more favorable financing environment.
For the year ended December 31, 2025, advisory revenues increased 24.8% to $720.7 million from $577.4 million in 2024. The increase is primarily attributable to higher levels of completed advisory transactions with continued growth in depository advisory transactions.
Interest income – For the year ended December 31, 2025, interest income increased 22.0% to $42.4 million from $34.8 million in 2024.
Other income – For the year ended December 31, 2025, other income decreased 38.4% to $19.5 million from $31.7 million in 2024. The decrease is primarily attributable to reduced lease income generated from our aircraft engine leasing business due to the sale of engines.
Interest expense – For the year ended December 31, 2025, interest expense decreased 7.6% to $51.0 million from $55.2 million in 2024. The decrease is primarily attributable to lower interest rates.
NON-INTEREST EXPENSES
For the year ended December 31, 2025, Institutional Group non-interest expenses increased 15.8% to $1.6 billion from $1.4 billion in 2024.
Compensation and benefits – For the year ended December 31, 2025, compensation and benefits expense increased 20.2% to $1.15 billion from $959.6 million in 2024. The increase is driven by higher variable compensation expense as a result of an improving operating environment.
Compensation and benefits expense as a percentage of net revenues was 60.3% for the year ended December 31, 2025, compared to 60.2% in 2024.
Occupancy and equipment rental – For the year ended December 31, 2025, occupancy and equipment rental expense decreased 3.2% to $86.0 million from $88.8 million in 2024. The decrease is primarily attributable to lower furniture and equipment costs and repair and maintenance costs, partially offset by higher data processing expenses and occupancy costs.
Communications and office supplies – For the year ended December 31, 2025, communications and office supplies expense decreased 1.2% to $104.4 million from $105.6 million in 2024. The decrease is primarily attributable to lower communication and quote expenses, internet costs, and telecommunication expenses, partially offset by higher quote equipment costs.
Commissions and floor brokerage – For the year ended December 31, 2025, commissions and floor brokerage increased 2.7% to $36.6 million from $35.7 million in 2024. The increase was primarily attributable to higher ECN trading costs, partially offset by lower clearing expenses.
Other operating expenses – For the year ended December 31, 2025, other operating expenses increased 13.8% to $204.6 million from $179.8 million in 2024. The increase is primarily attributable to higher investment banking transaction expenses, travel-related expenses, litigation-related expenses, taxes and licenses expense, professional fees, and conference-related expenses, partially offset by lower subscription costs.
INCOME BEFORE INCOME TAXES
For the year ended December 31, 2025, income before income taxes for the Institutional Group segment increased to $329.4 million from $223.4 million in 2024. Profit margins (income before income taxes as a percentage of net revenues) have increased to 17.2% for the year ended December 31, 2025, from 14.0% in 2024 as a result of higher revenues.
Year Ended December 31, 2024, Compared With Year Ended December 31, 2023
NET REVENUES
For the year ended December 31, 2024, Institutional Group net revenues increased 29.9% to $1.6 billion from $1.2 billion in 2023. The increase in net revenues is primarily attributable to higher capital-raising, advisory, and transactional revenues.
Transactional revenues – For the year ended December 31, 2024, transactional revenues increased 19.3% to $608.2 million from $509.8 million in 2023.
For the year ended December 31, 2024, fixed income transactional revenues increased 27.4% to $393.0 million from $308.4 million in 2023. The increase in fixed income transactional revenues is primarily attributable to increased activity as a result of market volatility and higher trading gains.
For the year ended December 31, 2024, equity transactional revenues increased 6.9% to $215.2 million from $201.4 million in 2023. The increase in equity transactional revenues is primarily attributable to higher volumes.
Investment banking – For the year ended December 31, 2024, investment banking revenues increased 36.2% to $973.4 million from $714.6 million in 2023.
For the year ended December 31, 2024, capital-raising revenues increased 59.0% to $395.9 million from $249.0 million in 2023.
For the year ended December 31, 2024, equity capital-raising revenues increased 74.2% to $186.9 million from $107.3 million in 2023 driven by higher volumes.
For the year ended December 31, 2024, fixed income capital-raising revenues increased 47.6% to $209.0 million from $141.6 million in 2023. The increase is primarily attributable to an increase in our corporate debt issuance business.
For the year ended December 31, 2024, advisory revenues increased 24.0% to $577.4 million from $465.6 million in 2023. The increase is primarily attributable to higher levels of completed advisory transactions.
Interest income – For the year ended December 31, 2024, interest income increased 44.8% to $34.8 million from $24.0 million in 2023.
Other income – For the year ended December 31, 2024, other income increased 149.7% to $31.7 million from $12.7 million in 2023. The increase is primarily attributable to an increase in investment gains.
Interest expense – For the year ended December 31, 2024, interest expense increased 58.8% to $55.2 million from $34.8 million in 2023. The increase is primarily attributable to higher interest rates and an increase in inventory levels.
NON-INTEREST EXPENSES
For the year ended December 31, 2024, Institutional Group non-interest expenses increased 11.9% to $1.4 billion from $1.2 billion in 2023.
Compensation and benefits – For the year ended December 31, 2024, compensation and benefits expense increased 14.0% to $959.6 million from $841.7 million in 2023. The increase is driven by higher compensable revenues.
Compensation and benefits expense as a percentage of net revenues was 60.2% for the year ended December 31, 2024, compared to 68.6% in 2023. The decrease is primarily attributable to revenue growth.
Occupancy and equipment rental – For the year ended December 31, 2024, occupancy and equipment rental expense increased 3.7% to $88.8 million from $85.6 million in 2023. The increase is attributable to higher furniture and equipment, repair and maintenance, and occupancy costs associated with continued investments in our business.
Communications and office supplies – For the year ended December 31, 2024, communications and office supplies expense increased 4.7% to $105.6 million from $100.8 million in 2023. The increase is primarily attributable to higher communication and quote expenses.
Commissions and floor brokerage – For the year ended December 31, 2024, commissions and floor brokerage expense increased 8.5% to $35.7 million from $32.9 million in 2023. The increase was primarily attributable to higher clearing expenses and ECN trading costs, partially offset by lower processing expenses.
Other operating expenses – For the year ended December 31, 2024, other operating expenses increased 10.2% to $179.8 million from $163.2 million in 2023. The increase is primarily attributable to higher investment banking transaction expenses, professional fees, and conference-related expenses, partially offset by lower litigation-related expenses, travel-related expenses, and taxes and licenses expense.
INCOME BEFORE INCOME TAXES
For the year ended December 31, 2024, income before income taxes for the Institutional Group segment increased to $223.4 million from $2.1 million in 2023. Profit margins (income before income taxes as a percentage of net revenues) increased to 14.0% for the year ended December 31, 2024, from 0.2% in 2023 as a result of higher revenues.
Results of Operations – Other Segment
The Other segment includes costs associated with investments made in the Company’s infrastructure and control environment and expenses related to the Company’s acquisition strategy. The following table presents financial information for our Other segment for the periods presented broken out between infrastructure growth-related expenses and acquisition-related expenses (in thousands, except percentages) :
For the Year Ended December 31,
Percentage Change
Net revenues
Non-interest expenses:
Compensation and benefits:
Core business-related
Acquisition-related
Total compensation and benefits
Other operating expenses:
Core business-related
Acquisition-related
Total other operating expenses
Total non-interest expenses
Loss before income taxes
For the year ended December 31, 2025, non-interest expenses increased 7.6% to $641.6 million from $596.4 million in 2024. The increase is primarily attributable to increased provisions for legal and regulatory matters, an increase in variable compensation, and the recording of severance costs associated with workforce reductions in certain of our foreign subsidiaries.
The expenses relating to the Company’s acquisition strategy are primarily attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s ongoing business.
For the year ended December 31, 2025, non-interest expenses related to our acquisition strategy, included in the numbers presented in the table above, increased 65.9% to $117.5 million from $70.8 million in 2024.
Analysis of Financial Condition
Our company’s consolidated statements of financial condition consist primarily of cash and cash equivalents, receivables, financial instruments owned, bank loans, investments, goodwill, loans and advances to financial advisors, bank deposits, and payables. Total assets of $41.3 billion at December 31, 2025, were up 3.4% over December 31, 2024. Our broker-dealer subsidiary’s gross assets and liabilities, including financial instruments owned, stock loan/borrow, receivables and payables from/to brokers, dealers, and clearing organizations and clients, fluctuate with our business levels and overall market conditions.
As of December 31, 2025, our liabilities were comprised primarily of deposits of $29.8 billion at Stifel Bancorp, accounts payable and accrued expenses of $701.4 million, senior notes, net of debt issuance costs, of $617.4 million, payables to customers of $431.6 million at our broker-dealer subsidiaries, and accrued employee compensation of $989.0 million. To meet our obligations to clients and operating needs, we had $12.9 billion of cash or assets readily convertible into cash at December 31, 2025.
Cash Flow
Cash and cash equivalents decreased $395.4 million to $2.3 billion at December 31, 2025, from $2.7 billion at December 31, 2024. Operating activities provided cash of $1.1 billion primarily due to net income recognized in 2025 adjusted for non-cash activities. Investing activities used cash of $1.6 billion due to investment securities purchases, the growth of our loan portfolio, cash used to fund acquisitions, and fixed asset purchases, partially offset by proceeds from principal paydowns of investment securities. Financing activities provided cash of $91.2 million primarily due to the increase in bank deposits, securities sold under agreements to repurchase, and securities loaned, partially offset by repurchases of our common stock, tax payments related to shares withheld for stock-based compensation, and dividends paid on our common and preferred stock.
Liquidity and Capital Resources
Liquidity and capital are essential to our business. The primary goal of our liquidity management activities is to ensure adequate funding and liquidity to conduct our business over a range of economic and market environments, including times of broader industry or market liquidity stress events. In times of market stress or uncertainty, we generally maintain higher levels of capital and liquidity, including increased cash levels at our bank subsidiaries, to ensure we have adequate funding to support our business and meet our clients’ needs. We seek to manage capital levels to support execution of our business strategy, provide financial strength to our subsidiaries, and maintain sustained access to the capital markets, while at the same time meeting our regulatory capital requirements, and conservative internal management targets.
Liquidity and capital resources are provided primarily through our business operations and financing activities. Financing activities could include bank borrowings, collateralized financing arrangements, new or enhanced deposit product offerings, or additional capital-raising activities under our “universal” shelf registration statement. We believe our existing assets, most of which are liquid in nature, together with funds generated from operations and available from committed and uncommitted financing facilities, provide adequate funds for continuing operations at current levels of activity in the short term. We also believe that we will be able to continue to meet our long-term cash requirements due to our strong financial position and ability to access capital from financial markets.
The Company’s senior management establishes the liquidity and capital policies of our company. The Company’s senior management reviews business performance relative to these policies, monitors the availability of alternative sources of financing, and oversees the liquidity and interest rate sensitivity of our company’s asset and liability position.
Our assets, consisting mainly of cash or assets readily convertible into cash, are our principal source of liquidity. The liquid nature of these assets provides for flexibility in managing and financing the projected operating needs of the business. These assets are financed primarily by our equity capital, corporate debt, debentures to trusts, client credit balances, short-term bank loans, proceeds from securities lending, repurchase agreements, and other payables. We currently finance our client accounts and firm trading positions through ordinary course borrowings at floating interest rates from various banks on a demand basis, securities lending, and repurchase agreements, with company-owned and client securities pledged as collateral. Changes in securities market volumes, related client borrowing demands, underwriting activity, and levels of securities inventory affect the amount of our financing requirements.
Our bank assets consist principally of available-for-sale and held-to-maturity securities, loans held for investment, and cash and cash equivalents. Stifel Bancorp’s current liquidity needs are generally met through deposits from brokerage clients and equity capital. We monitor the liquidity of our bank subsidiaries daily to ensure their ability to meet customer deposit withdrawals, maintain reserve requirements, and support asset growth.
As of December 31, 2025, we had $41.3 billion in assets, $12.9 billion of which consisted of cash or assets readily convertible into cash as follows (in thousands) :
December 31,
Cash and cash equivalents
Receivables from brokers, dealers, and clearing organizations
Securities purchased under agreements to resell
Financial instruments owned at fair value
Available-for-sale securities at fair value
Held-to-maturity securities at amortized cost
Investments
Total cash and assets readily convertible to cash
As of December 31, 2025 and 2024, the amount of collateral by asset class is as follows (in thousands) :
December 31, 2025
December 31, 2024
Contractual
Contingent
Contractual
Contingent
Cash and cash equivalents
Financial instruments owned at fair value
Investment portfolio (AFS & HTM)
Liquidity Available From Subsidiaries
Liquidity is principally available to our company from Stifel and Stifel Bancorp.
Stifel is required to maintain net capital equal to the greater of $1 million or two percent of aggregate debit items arising from client transactions. Covenants in the Company’s committed financing facilities require the excess net capital of Stifel, our principal broker-dealer subsidiary, to be above a defined amount. At December 31, 2025, Stifel’s excess net capital exceeded the minimum requirement, as defined. There are also limitations on the amount of dividends that may be declared by a broker-dealer without FINRA approval. See Note 19 of the Notes to Consolidated Financial Statements for more information on the capital restrictions placed on our broker-dealer subsidiaries.
Stifel Bancorp may pay dividends to the parent company without prior approval by its regulator as long as the dividend does not exceed the sum of Stifel Bancorp’s current calendar year and the previous two calendar years’ retained net income and Stifel Bancorp maintains its targeted capital to risk-weighted assets ratios.
Although we have liquidity available to us from our other subsidiaries, the available amounts are not as significant as the amounts described above and, in certain instances, may be subject to regulatory requirements.
Capital Management
We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At December 31, 2025, the maximum number of shares that may yet be purchased under this plan was 7.6 million. We utilize the share repurchase program to manage our equity capital relative to the growth of our business and help to meet obligations under our employee benefit plans.
Liquidity Risk Management
Our businesses are diverse, and our liquidity needs are determined by many factors, including market movements, collateral requirements, and client commitments, all of which can change dramatically in a difficult funding environment. During a liquidity crisis, credit-sensitive funding, including unsecured debt and some types of secured financing agreements, may be unavailable, and the terms (e.g., interest rates, collateral provisions, and tenor) or availability of other types of secured financing may change. We manage liquidity risk by diversifying our funding sources across products and among individual counterparties within those products.
As a holding company, whereby all of our operations are conducted through our subsidiaries, our cash flow and our ability to service our debt, including the notes, depend upon the earnings of our subsidiaries. Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on the notes or to provide us with funds to pay our obligations, whether by dividends, distributions, loans, or other payments.
Our liquidity requirements may change in the event we need to raise more funds than anticipated to increase inventory positions, support more rapid expansion, develop new or enhanced services and products, acquire technologies, respond to acquisition opportunities, expand our recruiting efforts, or respond to other unanticipated liquidity requirements. We primarily rely on financing activities and distributions from our subsidiaries for funds to implement our business and growth strategies and repurchase our shares. Net capital rules, restrictions under our borrowing arrangements of our subsidiaries, as well as the earnings, financial condition, and cash requirements of our subsidiaries, may each limit distributions to us from our subsidiaries.
The availability of outside financing, including access to the capital markets and bank lending, depends on a variety of factors, such as market conditions, the general availability of credit, the volume of trading activities, the overall availability of credit to the financial services sector, and our credit rating. Our cost and availability of funding may be adversely affected by illiquid credit markets and wider credit spreads. As a result of any future concerns about the stability of the markets generally and the strength of counterparties specifically, lenders may from time to time curtail, or even cease to provide, funding to borrowers.
Our liquidity management policies are designed to mitigate the potential risk that we may be unable to access adequate financing to service our financial obligations without material business impact. The principal elements of our liquidity management framework are: (a) daily monitoring of our liquidity needs at the holding company and significant subsidiary level, (b) stress testing the liquidity positions of Stifel and our bank subsidiaries, and (c) diversification of our funding sources.
Monitoring of liquidity – Senior management establishes our liquidity and capital policies. These policies include senior management’s review of short- and long-term cash flow forecasts, review of monthly capital expenditures, the monitoring of the availability of alternative sources of financing, and the daily monitoring of liquidity in our significant subsidiaries. Our decisions on the allocation of capital to our business units consider, among other factors, projected profitability and cash flow, risk, and impact on future liquidity needs. Our treasury department assists in evaluating, monitoring, and controlling the impact that our business activities have on our financial condition, liquidity, and capital structure, as well as maintains our relationships with various lenders. The objectives of these policies are to support the successful execution of our business strategies while ensuring ongoing and sufficient liquidity.
Liquidity stress testing (Firmwide) – A liquidity stress test model is maintained by the Company that measures liquidity outflows across multiple scenarios at the major operating subsidiaries and details the corresponding impact to our holding company and the overall consolidated firm. Liquidity stress tests are utilized to ensure that current exposures are consistent with the Company’s established liquidity risk tolerance and, more specifically, to identify and quantify sources of potential liquidity strain. Further, the stress tests are utilized to analyze possible impacts on the Company’s cash flows and liquidity position. The outflows are modeled over a 30-day liquidity stress timeframe and include the impact of idiosyncratic and macro-economic stress events.
The assumptions utilized in the Company’s liquidity stress tests include, but are not limited to, the following:
No government support
No access to equity and unsecured debt markets within the stress time horizon
Higher haircuts and significantly lower availability of secured funding
Additional collateral that would be required by trading counter-parties, certain exchanges, and clearing organizations related to credit rating downgrades
Client cash withdrawals and inability to accept new deposits
Increased demand from customers on the funding of loans and lines of credit
At December 31, 2025, the Company maintained sufficient liquidity to meet current and contingent funding obligations as modeled in its liquidity stress test model.
Liquidity stress testing (Stifel Bancorp) – Our bank subsidiaries perform three primary stress tests on its liquidity position. These stress tests are based on the following company-specific stresses: (1) the amount of deposit run-off that they could withstand over a one-month period of time based on their on-balance sheet liquidity and available credit, (2) the ability to fund operations if all available credit were to be drawn immediately, with no additional available credit, and (3) the ability to fund operations under a regulatory prompt corrective action. The goal of these stress tests is to determine their ability to fund continuing operations under significant pressures on both assets and liabilities.
Under all stress tests, our bank subsidiaries consider cash and highly liquid investments as available to meet liquidity needs. In its analysis, our bank subsidiaries consider agency mortgage-backed securities, corporate bonds, and commercial mortgage-backed securities as highly liquid. In addition to being able to be readily financed at modest haircut levels, our bank subsidiaries estimate that each of the individual securities within each of the asset classes described above could be sold into the market and converted into cash within three business days under normal market conditions, assuming that the entire portfolio of a given asset class was not simultaneously liquidated. At December 31, 2025, available cash and highly liquid investments comprised approximately 12% of Stifel Bancorp’s assets, which was well in excess of its internal target.
In addition to these stress tests, management performs a daily liquidity review. The daily analysis provides management with all major fluctuations in liquidity. The analysis also tracks the proportion of deposits that Stifel Bancorp is sweeping from its affiliated broker-dealer, Stifel. On a monthly basis, liquidity key performance indicators and compliance with liquidity policy limits are reported to the Board of Directors. Our bank subsidiaries have not violated any internal liquidity policy limits.
Funding Sources
The Company pursues a strategy of diversification of secured and unsecured funding sources (by product and by investor) and attempts to ensure that the tenor of the Company’s liabilities equals or exceeds the expected holding period of the assets being financed. The Company funds its balance sheet through diverse sources. These sources may include the Company’s equity capital, long-term debt, repurchase agreements, securities lending, deposits, committed and uncommitted credit facilities, Federal Home Loan Bank advances, and federal funds agreements.
On September 14, 2023, we filed a “universal” shelf registration statement with the SEC pursuant to which we can issue debt, equity, and other capital instruments if and when necessary or perceived by us to be opportune. Subject to certain conditions, this registration statement will be effective through September 14, 2026.
Cash and Cash Equivalents – We held $2.3 billion of cash and cash equivalents at December 31, 2025, compared to $2.6 billion at December 31, 2024. Cash and cash equivalents provide immediate sources of funds to meet our liquidity needs.
Available-for-Sale Securities – We held $1.59 billion in available-for-sale investment securities at December 31, 2025, compared to $1.58 billion at December 31, 2024. These investment securities provide increased liquidity and flexibility to support our company’s funding requirements.
We monitor the available-for-sale investment portfolio for other-than-temporary impairment based on a number of criteria, including the size of the unrealized loss position, the duration for which the security has been in a loss position, credit rating, the nature of the investments, and current market conditions. For debt securities, we also consider any intent to sell the security and the likelihood we
will be required to sell the security before its anticipated recovery. We continually monitor the ratings of our security holdings and conduct regular reviews of our credit-sensitive assets.
Deposits – Deposits have become our largest funding source. Deposits provide a stable, low-cost source of funds that we utilize to fund asset growth and to diversify funding sources. We have continued to expand our deposit-gathering efforts through our existing private client network and through expansion. These channels offer a broad set of deposit products that include demand deposits, money market deposits, and certificates of deposit (“CDs”). Our core deposits are primarily comprised of money market deposit accounts, non-interest-bearing deposits, and CDs. The weighted-average interest rate on deposits was 2.58% and 3.22% at December 31, 2025 and 2024, respectively.
Deposits are primarily sourced by our multi-bank sweep program in which clients’ cash deposits in their brokerage accounts are swept into FDIC-insured interest-bearing accounts at our bank subsidiaries and various third-party banks. During 2025, we have seen an increase in deposits from our commercial, venture banking, and fund banking clients. In addition to our historical sweep program, we offer the Stifel Smart Rate Program (“Smart Rate”), a high yield savings account that keeps our brokerage clients’ cash balances at Stifel affiliated banks through their securities accounts. Brokerage client deposits totaled $25.6 billion and $27.1 billion at December 31, 2025 and 2024, respectively, which includes $14.7 billion and $17.1 billion, respectively, of client cash in our Smart Rate program. The decrease in money market deposits in 2025 was primarily driven by typical seasonality related to income tax payments. Please refer to the Distribution of Assets, Liabilities, and Shareholders’ Equity; Interest Rates and Interest Differential table for additional information on our average balances and interest income and expense.
Short-term borrowings – Our short-term financing is generally obtained through short-term bank line financing on an uncommitted, secured basis, securities lending arrangements, repurchase agreements, advances from the Federal Home Loan Bank, term loans, and committed bank line financing on an unsecured basis. We borrow from various banks on a demand basis with company-owned securities pledged as collateral. We also have an unsecured, committed bank line available.
Our uncommitted secured lines of credit at December 31, 2025, totaled $880.0 million with four banks and are dependent on having appropriate collateral, as determined by the bank agreements, to secure an advance under the line. The availability of our uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied. Our peak daily borrowing on our uncommitted secured lines was $125.0 million during the year ended December 31, 2025. There are no compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are day-to-day and are generally utilized to finance certain fixed income securities. At December 31, 2025, we had no outstanding balances on our uncommitted secured lines of credit.
Federal Home Loan advances are floating-rate advances. The weighted average interest rates during the year ended December 31, 2025, on these advances was 4.60%. The advances are secured by Stifel Bancorp’s residential mortgage loan portfolio and investment portfolio. The interest rates reset on a daily basis. Stifel Bancorp has the option to prepay these advances without penalty on the interest reset date. At December 31, 2025, there were no Federal Home Loan advances.
Unsecured borrowings – On February 4, 2026, the Company entered into the Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with respect to its existing unsecured Credit Agreement, dated September 27, 2023, (the “Credit Agreement”), among the Company and Stifel (the “Borrowers”) and a syndicate of lenders led by Bank of America, N.A., as administrative agent. Concurrently with, and conditional upon, the effectiveness of the Amended and Restated Credit Agreement, all of the commitments under the Borrowers’ existing Credit Agreement were terminated.
The Amended and Restated Credit Agreement has a maturity date of February 4, 2031, and provides for a committed unsecured revolving borrowing facility for maximum aggregate borrowings of up to $1.0 billion depending on the amount of outstanding borrowings of the Borrowers from time to time during the duration of the Amended and Restated Credit Agreement. The interest rates on borrowings under the Amended and Restated Credit Agreement are variable and are based on the Secured Overnight Financing Rate.
The Borrowers can draw upon this facility as long as certain restrictive covenants are maintained. Under the Amended and Restated Credit Agreement, the Borrowers are required to maintain compliance with a minimum consolidated tangible net worth covenant, as defined, and a maximum consolidated total capitalization ratio covenant, as defined. In addition, Stifel is required to maintain compliance with a minimum regulatory excess net capital percentage covenant, as defined, and the Company’s bank subsidiaries are required to maintain their status as well-capitalized, as defined.
Upon the occurrence and during the continuation of an event of default, the Company’s obligations under the Amended and Restated Credit Agreement may be accelerated and the lending commitments thereunder terminated. The Amended and Restated Credit Agreement contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, change of control, and judgment defaults.
Federal Home Loan Bank Advances and other secured financing – Stifel Bancorp has borrowing capacity with the Federal Home Loan Bank of $7.0 billion at December 31, 2025, and $64.5 million in federal funds agreements for the purpose of purchasing short-term funds should additional liquidity be needed. At December 31, 2025, there were no outstanding Federal Home Loan Bank advances. Stifel Bancorp is eligible to participate in the Federal Reserve’s discount window program; however, Stifel Bancorp does not view
borrowings from the Federal Reserve as a primary means of funding. The credit available in this program is subject to periodic review, may be terminated or reduced at the discretion of the Federal Reserve, and is secured by securities. Stifel Bancorp has borrowing capacity of $6.4 billion with the Federal Reserve’s discount window at December 31, 2025. Stifel Bancorp receives overnight funds from excess cash held in Stifel brokerage accounts, which are deposited into a money market account. These balances totaled $25.6 billion at December 31, 2025. At December 31, 2025, there was $26.6 billion in client money market and FDIC-insured product balances.
Public Offering of Senior Notes – On July 15, 2014, we sold in a registered underwritten public offering, $300.0 million in aggregate principal amount of 4.25% senior notes (the “2014 Notes”). In July 2016, we issued an additional $200.0 million in aggregate principal amount of 4.25% senior notes. In July 2014, we received a BBB- rating on the 2014 Notes. In July 2024, the $500.0 million of 2014 Notes matured.
On October 4, 2017, we completed the pricing of a registered underwritten public offering of $200.0 million in aggregate principal amount of 5.20% senior notes due October 2047. Interest on the senior notes is payable quarterly in arrears in January, April, July, and October. We may redeem some or all of the senior notes at any time at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued interest thereon to the redemption date. On October 27, 2017, we completed the sale of an additional $25.0 million aggregate principal amount of Notes pursuant to the over-allotment option. In October 2017, we received a BBB- rating on the notes.
On May 20, 2020, we sold in a registered underwritten public offering, $400.0 million in aggregate principal amount of 4.00% senior notes due May 2030. Interest on these senior notes is payable semi-annually in arrears in May and November. We may redeem the notes in whole or in part, at our option, at a redemption price equal to the greater of a) 100% of their principal amount or b) discounted present value at Treasury rate plus 50 basis points prior to February 15, 2030, and on or after February 15, 2030, at 100% of their principal amount, and accrued and unpaid interest, if any, to the date of redemption. In May 2020, we received a BBB- rating on the notes.
Public Offering of Preferred Stock – In July 2016, the Company completed an underwritten registered public offering of $150.0 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series A. On August 20, 2021, the Company redeemed all of the outstanding Series A Preferred Stock.
In February 2019, the Company completed an underwritten registered public offering of $150.0 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series B. In March 2019, we completed a public offering of an additional $10.0 million of Series B Preferred, pursuant to the over-allotment option.
In May 2020, the Company completed an underwritten registered public offering of $225.0 million 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, which included the sale of $25.0 million of Series C Preferred pursuant to an over-allotment option.
On July 22, 2021, the Company completed an underwritten registered public offering of $300.0 million of 4.50% Non-Cumulative Perpetual Preferred Stock, Series D. When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 4.50%, payable quarterly, in arrears. The Company may redeem the Series D preferred stock at its option, subject to regulatory approval, on or after August 15, 2026.
Credit Rating
We believe our current rating depends upon a number of factors, including industry dynamics, operating and economic environment, operating results, operating margins, earnings trends and volatility, balance sheet composition, liquidity and liquidity management, our capital structure, our overall risk management, business diversification, and our market share and competitive position in the markets in which we operate. Deteriorations in any of these factors could impact our credit rating. A reduction in our credit rating could adversely affect our liquidity and competitive position, increase our incremental borrowing costs, limit our access to the capital markets, or trigger our obligations under certain financial agreements. As such, we may not be able to successfully obtain additional outside financing to fund our operations on favorable terms, or at all.
We believe our existing assets, a significant portion of which are liquid in nature, together with the funds from operations, available informal short-term credit arrangements, and our ability to raise additional capital will provide sufficient resources to meet our present and anticipated financing needs.
Use of Capital Resources
On April 7, 2025, the Company completed the acquisition of a portion of B. Riley Financial, Inc.’s traditional wealth management business, a deal that added 36 advisors with approximately $4 billion in assets under management. Consideration for this transaction consisted of cash from operations.
On June 2, 2025, the Company completed the acquisition of Bryan, Garnier & Co. (“Bryan Garnier”), an independent full-service investment bank focused on European technology and healthcare companies. Bryan Garnier’s product suite includes mergers & acquisitions advisory, private and public growth financing solutions, and institutional sales and execution. Bryan Garnier is headquartered in Europe with offices in Paris, London, Amsterdam, Munich, Oslo, Stockholm, and New York. Consideration for this transaction consisted of cash from operations.
During the year ended December 31, 2025, we declared and paid cash dividends of $249.0 million to shareholders. On January 26, 2026, the Board of Directors approved an 11% increase in the quarterly dividend to $0.51 per common share starting in the first quarter of 2026. On a split-adjusted basis, the quarterly dividend will be $0.34 per common share or $1.36 per common share on an annual basis.
During the year ended December 31, 2025, we repurchased $244.6 million, or 2.5 million shares, at an average price of $98.28 per share.
As part of our ongoing operations, we also enter into contractual arrangements that may require future cash payments, including certificates of deposit, lease obligations, and other contractual arrangements. See Notes 13 and 20 of the Notes to the Consolidated Financial Statements for information regarding our certificates of deposit and lease obligations, respectively. We have entered into investment commitments, lending commitments, and other commitments to extend credit for which we are unable to reasonably predict the timing of future payments. See Note 24 of the Notes to Consolidated Financial Statements for additional information.
The following table summarizes the activity related to loans and advances to financial advisors and other employees, net from January 1, 2024 to December 31, 2025 (in thousands) :
Beginning balance – January 1
Notes issued – organic growth
Restricted cash issued
Amortization
Other
Ending balance – December 31
We have paid $228.5 million in the form of upfront notes to financial advisors for transition pay during the year ended December 31, 2025. As we continue to take advantage of the opportunities created by market displacement and as competition for skilled professionals in the industry increases, we may decide to devote more significant resources to attracting and retaining qualified personnel.
We utilize transition pay, principally in the form of upfront demand notes, to aid financial advisors, who have elected to join our firm, to supplement their lost compensation while transitioning their customers’ accounts to the Stifel platform. The initial value of the notes is determined primarily by the financial advisors’ trailing production and assets under management. These notes are generally forgiven over a five- to twelve-year period based on production. The future estimated amortization expense of the upfront notes, assuming current-year production levels and static growth for the years ended December 31, 2026, 2027, 2028, 2029, 2030, and thereafter, is $171.7 million, $127.9 million, $113.8 million, $86.3 million, $67.6 million, and $177.3 million, respectively. These estimates could change if we continue to grow our business through expansion or experience increased production levels.
We provide compensation to existing employees in the form of cash awards which are subject to ratable vesting terms with service requirements. We amortize these awards to compensation expense over the relevant service period of five years. At December 31, 2025, there was $43.6 million of cash awards, net, which is included in loans and advances to financial advisors and other employees, net in the consolidated statement of financial condition, which is expected to be amortized over a weighted-average period of 3.7 years.
We maintain an incentive stock plan and a wealth accumulation plan that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, “deferred awards”) to our associates. Historically, we have granted stock units to our associates as part of our retention program. A restricted stock unit or restricted stock award represents the right to receive a share of the Company’s common stock at a designated time in the future without cash payment by the associate and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units generally vest over the next one to ten years after issuance and are distributed at predetermined future payable dates once vesting occurs. Restricted stock awards are restricted as to sale or disposition. These restrictions lapse over the next year.
At December 31, 2025, the total number of restricted stock units, Performance-based Restricted Stock Units (“PRSUs”), and restricted stock awards outstanding was 11.8 million, of which 10.9 million were unvested. At December 31, 2025, there was approximately $733.8 million of unrecognized compensation cost for all deferred awards, which is expected to be recognized over a weighted-average period of 2.7 years.
The future estimated compensation expense of the deferred awards, assuming current year forfeiture levels and static growth for the years ended December 31, 2026, 2027, 2028, 2029, 2030, and thereafter, is $236.7 million, $178.0 million, $127.9 million, $89.4 million, $41.2 million, and $60.6 million, respectively. These estimates could change if our forfeitures change from historical levels.
Net Capital Requirements – We operate in a highly regulated environment and are subject to capital requirements, which may limit distributions to our company from our subsidiaries. Distributions from our broker-dealer subsidiaries are subject to net capital rules. These subsidiaries have historically operated in excess of minimum net capital requirements. However, if distributions were to be limited in the future due to the failure of our subsidiaries to comply with the net capital rules or a change in the net capital rules, it could have a material and adverse effect to our company by limiting our operations that require intensive use of capital, such as underwriting or trading activities, or limit our ability to implement our business and growth strategies, pay interest on and repay the principal of our debt, and/or repurchase our common stock. Our non-broker-dealer subsidiaries, Stifel Bank & Trust, Stifel Bank, Stifel Trust Company,
N.A., and Stifel Trust Company Delaware, N.A., are also subject to various regulatory capital requirements administered by the federal banking agencies. Our broker-dealer subsidiaries and our bank subsidiaries have consistently operated in excess of their capital adequacy requirements. Our Canadian subsidiary, SNC, is subject to the regulatory supervision and requirements of CIRO.
At December 31, 2025, Stifel had net capital of $559.5 million, which was 37.7% of aggregate debit items and $529.8 million in excess of its minimum required net capital. At December 31, 2025, all of our broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule. At December 31, 2025, SNEL’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA. At December 31, 2025, our banking subsidiaries were considered well capitalized under the regulatory framework for prompt corrective action. At December 31, 2025, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the CIRO. See Note 19 of the Notes to Consolidated Financial Statements for details of our regulatory capital requirements.
Critical Accounting Policies and Estimates
In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles and pursuant to the rules and regulations of the SEC, we make assumptions, judgments, and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments, and estimates. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.
We believe that the assumptions, judgments, and estimates involved in the accounting policies described below have the greatest potential impact on our consolidated financial statements. These areas are key components of our results of operations and are based on complex rules that require us to make assumptions, judgments, and estimates, so we consider these to be our critical accounting policies. Historically, our assumptions, judgments, and estimates relative to our critical accounting policies and estimates have not differed materially from actual results.
For a full description of these and other accounting policies, see Note 2 of the Notes to Consolidated Financial Statements.
Contingencies
We are involved in various pending and potential legal proceedings related to our business, including litigation, arbitration, and regulatory proceedings. Some of these matters involve claims for substantial amounts, including claims for punitive damages. We have, after consultation with outside legal counsel and consideration of facts currently known by management, recorded estimated losses in accordance with Topic 450 (“Topic 450”), “Contingencies,” to the extent that claims are probable of loss and the amount of the loss can be reasonably estimated. The determination of the amount to accrue requires us to use significant judgment, and our final liabilities may ultimately be materially different. This determination is inherently subjective, as it requires estimates that are subject to potentially significant revision as more information becomes available and due to subsequent events. In making these determinations, we consider many factors, including, but not limited to, the loss and damages sought by the plaintiff or claimant, the basis and validity of the claim, the likelihood of a successful defense against the claim, and the potential for, and magnitude of, damages or settlements from such pending and potential litigation and arbitration proceedings, and fines and penalties or orders from regulatory agencies. See “Item 3 – Legal Proceedings” of this Form 10-K for information on our legal, regulatory, and arbitration proceedings.
Allowance for Credit Losses
The measurement of the allowance for credit losses, which includes the allowance for credit losses and the reserve for unfunded lending commitments, is based on management’s best estimate of lifetime expected credit losses inherent in our company’s relevant financial assets.
The expected credit losses on our loan portfolio are referred to as the allowance for credit losses and are reported separately as a contra-asset to loans on the consolidated statement of financial condition. The expected credit losses for unfunded lending commitments, including standby letters of credit and binding unfunded loan commitments, are reported on the consolidated statement of financial condition in accounts payable and accrued expenses. The provision for credit losses related to the loan portfolio and the provision for unfunded lending commitments are reported in the consolidated statement of operations in provision for credit losses.
The allowance for credit losses is measured on a collectively evaluated basis when similar risk characteristics exist. For the purpose of calculating portfolio-level allowances, we have grouped our loans into eight segments (“loan portfolio segments”): commercial and industrial, commercial real estate, residential real estate, construction and land, fund banking, securities-based loans, home equity lines of credit, and other loans. When a loan does not share similar risk characteristics with other loans, the loan is evaluated for credit losses on an individual basis. Various risk characteristics are considered when determining whether the loan should be collectively evaluated, including, but not limited to, financial asset type, risk ratings, collateral type, industry of the borrower, and historical or expected credit loss patterns.
The quantitative component of the allowance for credit losses is measured at the loan portfolio segment level utilizing loan-level inputs wherever possible. The allowance for credit losses for the loan portfolio segments, excluding fund banking and securities-based lending,
are calculated at the loan portfolio segment level using a non-discounted cash flow method through probability of default (“PD”)/loss given default (“LGD”) models developed by a third-party vendor. These models project a PD, which is then multiplied by the LGD and the estimated exposure at default (“EAD”) at the loan level for every period remaining in the loan’s expected life. For the fund banking and securities-based lending loan portfolio segments, the allowance for credit losses is measured at the loan portfolio segment level using a static loss rate. The expected credit loss for loan portfolio segments using the PD/LGD models are estimated using quantitative methods that consider a variety of factors, such as historical loss experience derived from proxy data over the historical observation period, the current credit quality of the portfolio, as well as an economic outlook over a reasonable and supportable forecast period.
The expected life of the loan for closed-ended products is determined based on each loan portfolio segment. The residential real estate and home equity lines of credit portfolios determine the expected life of the loan based on the contractual maturity of the loan adjusted for any expected prepayments. For commercial and industrial, construction and land, and commercial real estate, the expected life of the loan is based on the contractual maturity of the loan.
In our loss forecasting framework, we incorporate forward-looking information using macroeconomic forecast scenarios applied over the reasonable and supportable forecast period. These macroeconomic scenarios include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, real estate prices, gross domestic product levels, corporate bond spreads, and long-term interest rate forecasts. Our macroeconomic forecast is obtained from a third-party vendor and based on a probability weighting over multiple scenarios. A two-year reasonable and supportable forecast period is used for the construction and land and commercial real estate loan portfolios followed by a one-year straight line reversion period to long-run PD and LGD values. For commercial and industrial, residential real estate, and home equity lines of credit portfolios, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets, including an assumption that each macroeconomic variable will revert to a long-term expectation starting in years two to four of the forecast and largely completing within the first five years of the forecast.
As any one macroeconomic outlook is inherently uncertain, we leverage multiple scenarios. The scenarios that are chosen each quarter and the amount of weighting given to each scenario depend on a variety of factors, including recent economic events, leading economic indicators, and industry trends. The reserve for unfunded lending commitments is estimated using the same scenarios, models, and economic data as the loan portfolio.
The allowance for credit losses includes adjustments for qualitative reserves based on our company’s assessment that may not be adequately represented in the quantitative methods or the macroeconomic assumptions described above. For example, factors that we consider include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and nonaccrual loans, the effect of external factors such as competition, and legal and regulatory requirements, among others. Further, we consider the inherent uncertainty in quantitative models that are built on historical data. As a result of the uncertainty inherent in the quantitative models, other quantitative and qualitative factors are considered in adjusting allowance amounts, including, but not limited to, the following: model imprecision, imprecision in macroeconomic forecast scenario, or changes in the economic environment affecting specific portfolio segments that deviate from the macroeconomic forecasts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Depending on changes in circumstances, future assessments of credit risk may yield materially different results from the prior estimates, which may require an increase or a decrease in the allowance for credit losses.
To demonstrate the sensitivity of our allowance for credit losses to macroeconomic forecasts, we compared our modeled estimates under the weighted scenarios used to estimate the allowance for credit losses as of December 31, 2025, to what our estimate would have been under a downside case scenario and an upside case scenario, without considering any offsetting effects in the qualitative component of our allowance for credit losses. As of December 31, 2025, use of the downside case scenario would have resulted in an increase of approximately $63.4 million in the quantitative portion of our allowance for credit losses on loans, while the use of the upside case scenario would have resulted in a reduction of approximately $40.4 million in the quantitative portion of our allowance for credit losses. These hypothetical outcomes reflect the relative sensitivity of the modeled portion of our allowance for credit losses estimate to macroeconomic forecast scenarios but do not consider any potential impact qualitative adjustments could have on the allowance for credit losses in such environments. Qualitative adjustments could either increase or decrease modeled loss estimates calculated using an alternative macroeconomic forecast scenario. Further, such sensitivity calculations do not necessarily reflect the nature and extent of future changes in the related allowance for credit losses for a number of reasons, including: (1) management’s predictions of future macroeconomic trends and relationships among the scenarios may differ from actual events, and (2) management’s application of subjective measures to modeled results through the qualitative portion of the allowance for credit losses when appropriate. The downside case scenario utilized in this hypothetical sensitivity analysis assumes a moderate recession. To the extent macroeconomic conditions worsen beyond those assumed in this downside case scenario, we could incur provisions for credit losses significantly in excess of those estimated in this analysis.
Recently Issued Accounting Guidance
Income Statement Expenses
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses. The guidance primarily will require enhanced disclosures about certain types of expenses. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026 (January 1, 2027, for our company), and interim periods within fiscal years beginning after December 15, 2027, and may be applied either on a prospective or retrospective basis. We are evaluating the impact of the accounting update on our disclosures.
Internal Use Software
In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The guidance primarily removes references to software development project stages to better align with current software development methods. Under ASU 2025-06, an entity will begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The accounting update is effective for annual periods beginning after December 15, 2027 (January 1, 2028, for our company), including interim periods within those fiscal years with early adoption permitted. The accounting update can be adopted either prospectively, retrospectively, or utilizing a modified transition approach. We are currently evaluating the impact of the accounting update on our consolidated financial statements.
Credit Losses Purchased Loans
In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326) – Purchased Loans, which expands the population of purchased financial assets subject to the gross-up approach in Topic 326. As a result of this update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” as defined in the accounting update will follow the gross-up approach at acquisition, and the initial allowance for credit losses at acquisition is added to the amortized cost basis of the loans. The accounting update is effective for annual reporting periods beginning after December 15, 2026 (January 1, 2027, for our company), including interim periods within those fiscal years with early adoption permitted. The accounting update will be applied using a prospective transition approach. We are currently evaluating the impact of the accounting update on our consolidated financial statements.
Interim Reporting
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and provides additional required interim disclosure guidance. The accounting update is effective for annual reporting periods beginning after December 15, 2027 (January 1, 2028, for our company) with early adoption permitted and can be applied either prospectively or retrospectively. We are currently evaluating the impact of the accounting update on our consolidated financial statements.
Off-Balance Sheet Arrangements
Information concerning our off-balance sheet arrangements is included in Note 24 of the Notes to Consolidated Financial Statements. Such information is hereby incorporated by reference.
Dilution
As of December 31, 2025, there were 11,831,871 outstanding restricted stock units, PRSUs, and restricted stock awards. A restricted stock unit represents the right to receive a share of the Company’s common stock at a designated time in the future without cash payment by the associate and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units vest on an annual basis over the next one to ten years and are distributable, if vested, at future specified dates. Restricted stock awards are restricted as to sale or disposition. These restrictions lapse over the next year. Of the outstanding restricted stock units, PRSUs, and restricted stock awards, 972,131 shares are currently vested and 10,859,740 are unvested. Assuming vesting requirements are met, the Company anticipates that 2,612,252 shares under these awards will be distributed in 2026, 2,408,790 will vest in 2027, 1,894,312 will vest in 2028, and the balance of 3,944,386 will be distributed thereafter.
An associate will realize income as a result of an award of stock units at the time shares are distributed in an amount equal to the fair market value of the shares at that time, and we are entitled to a corresponding tax deduction in the year of vesting in some instances, or delivery in other instances. Unless an associate elects to satisfy the withholding in another manner, either by paying the amount in cash or by delivering shares of Stifel Financial Corp. common stock already owned by the individual for at least six months, we may satisfy tax withholding obligations on income associated with the grants by reducing the number of shares otherwise deliverable in connection with the awards. The reduction will be calculated based on the current market price of our common stock. Based on current tax law, we anticipate that the shares issued when the awards are paid to the associates will be reduced by approximately 35% to satisfy the maximum withholding obligations, so that approximately 65% of the total restricted stock units that are distributable in any particular year will be converted into issued and outstanding shares.
It has been our practice historically to satisfy almost all tax withholding obligations on income associated with the grants by reducing the number of shares otherwise deliverable in connection with the awards. We anticipate that practice will continue, as recently our Compensation Committee made a determination to satisfy tax withholding obligations through the cancellation of shares subject to an
award. In addition, the plan pursuant to which we issue restricted stock units and restricted stock awards permits us to elect to settle certain awards entirely in cash, and we may elect to do so as those awards vest and become deliverable.
ITEM 7A . QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK
Risk Management
Risks are an inherent part of our business and activities. Management of these risks is critical to our soundness and profitability. Risk management at our company is a multi-faceted process that requires communication, judgment, and knowledge of financial products and markets. Our senior management group takes an active role in the risk management process and requires specific administrative and business functions to assist in the identification, assessment, monitoring, and control of various risks. The principal risks involved in our business activities are: market (interest rates and equity prices), credit, capital and liquidity, operational, and regulatory and legal.
We have adopted policies and procedures concerning Enterprise Risk Management. The Risk Management Committee of the Board of Directors, in exercising its oversight of management’s activities, conducts periodic reviews and discussions with management regarding the guidelines and policies governing the processes by which risk assessment and risk management are handled.
Market Risk
The potential for changes in the value of financial instruments owned by our company resulting from changes in interest rates and equity prices is referred to as “market risk.” Market risk is inherent to financial instruments, and accordingly, the scope of our market risk management procedures includes all market risk-sensitive financial instruments.
We trade tax-exempt and taxable debt obligations, including U.S. treasury bills, notes, and bonds; U.S. government agency and municipal notes and bonds; bank certificates of deposit; mortgage-backed securities; and corporate obligations. We are also an active market-maker in over-the-counter equity securities. In connection with these activities, we may maintain inventories in order to ensure availability and to facilitate customer transactions.
Changes in value of our financial instruments may result from fluctuations in interest rates, credit ratings, equity prices, and the correlation among these factors, along with the level of volatility.
We manage our trading businesses by product and have established trading departments that have responsibility for each product. The trading inventories are managed with a view toward facilitating client transactions, considering the risk and profitability of each inventory position. Position limits in trading inventory accounts are established by our Enterprise Risk Management department and monitored on a daily basis within the business units. We monitor inventory levels and results of the trading departments, as well as inventory aging, pricing, concentration, securities ratings, and risk sensitivities.
We are also exposed to market risk based on our other investing activities. These investments consist of investments in private equity partnerships, start-up companies, venture capital investments, and zero coupon U.S. government securities and are included under the caption “Investments” on the consolidated statements of financial condition.
Interest Rate Risk
We are exposed to interest rate risk as a result of maintaining inventories of interest rate-sensitive financial instruments and from changes in the interest rates on our interest-earning assets (including client loans, stock borrow activities, investments, inventories, and resale agreements) and our funding sources (including client cash balances, Federal Home Loan Bank advances, stock lending activities, bank borrowings, and repurchase agreements), which finance these assets. The collateral underlying financial instruments at the broker-dealer is repriced daily, thus requiring collateral to be delivered as necessary. Interest rates on client balances and stock borrow and lending produce a positive spread to our company, with the rates generally fluctuating in parallel.
We manage our inventory exposure to interest rate risk by setting and monitoring limits and, where feasible, hedging with offsetting positions in securities with similar interest rate risk characteristics. While a significant portion of our securities inventories have contractual maturities in excess of five years, these inventories, on average, turn over several times per year.
Value-at-Risk (“VaR”) is a statistical technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatility. It provides a common risk measure across financial instruments, markets, and asset classes. We estimate VaR using a model that assumes historical changes in market conditions are representative of future changes, and trading losses on any given day could exceed the reported VaR by significant amounts in unusually volatile markets. Further, the model involves a number of assumptions and inputs. While we believe that the assumptions and inputs we use in our risk model are reasonable, different
assumptions and inputs could produce materially different VaR estimates. We monitor, on a daily basis, the VaR in our trading portfolios using a ten-day horizon and a five-year look-back period measured at a 99% confidence level.
The following table sets forth the high, low, and daily average VaR for our trading portfolios during the year ended December 31, 2025, and the daily VaR at December 31, 2025 and 2024 (in thousands) :
December 31, 2025
VaR Calculation at December 31,
High
Low
Daily
Average
Daily VaR
Stifel Bancorp’s interest rate risk is principally associated with changes in market interest rates related to residential, consumer, and commercial lending activities, as well as FDIC-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.
Our primary emphasis in interest rate risk management for Stifel Bancorp is the matching of assets and liabilities of similar cash flow and repricing time frames. This matching of assets and liabilities reduces exposure to interest rate movements and aids in stabilizing positive interest spreads. Stifel Bancorp has established limits for acceptable interest rate risk and acceptable portfolio value risk. To ensure that Stifel Bancorp is within the limits established for net interest income, an analysis of net interest income based on various shifts in interest rates is prepared each quarter and presented to Stifel Bancorp’s Board of Directors. Stifel Bancorp utilizes a third-party model to analyze the available data.
The following table illustrates the estimated change in net interest income for Stifel Bancorp at December 31, 2025, based on shifts in interest rates of up to positive 200 basis points and negative 200 basis points:
Hypothetical Change
in Interest Rates
Projected Change
in Net Interest
Margin
The following GAP Analysis table indicates Stifel Bancorp’s interest rate sensitivity position at December 31, 2025 (in thousands) :
Repricing Opportunities
0-6 Months
7-12 Months
1-5 Years
5+ Years
Interest-earning assets:
Loans
Securities
Interest-bearing cash
Interest-bearing liabilities:
Transaction accounts and savings
Certificates of deposit
Borrowings
GAP
Cumulative GAP
Equity Price Risk
We are exposed to equity price risk as a consequence of making markets in equity securities. We attempt to reduce the risk of loss inherent in our inventory of equity securities by monitoring those security positions constantly throughout each day.
Our equity securities inventories are repriced on a regular basis, and there are no unrecorded gains or losses. Our activities as a dealer are client-driven, with the objective of meeting clients’ needs while earning a positive spread.
Credit Risk
We are engaged in various trading and brokerage activities, with the counterparties primarily being broker-dealers. In the event counterparties do not fulfill their obligations, we may be exposed to risk. The risk of default depends on the creditworthiness of the
counterparty or issuer of the instrument. We manage this risk by imposing and monitoring position limits for each counterparty, monitoring trading counterparties, conducting regular credit reviews of financial counterparties, reviewing security concentrations, holding and marking to market collateral on certain transactions, and conducting business through clearing organizations, which guarantee performance.
Our client activities involve the execution, settlement, and financing of various transactions on behalf of our clients. Client activities are transacted on either a cash or margin basis. Credit exposure associated with our private client business consists primarily of customer margin accounts, which are monitored daily and are collateralized. We monitor exposure to industry sectors and individual securities and perform analyses on a regular basis in connection with our margin lending activities. We adjust our margin requirements if we believe our risk exposure is not appropriate based on market conditions.
We have accepted collateral in connection with resale agreements, securities borrowed transactions, and customer margin loans. Under many agreements, we are permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or to deliver to counterparties to cover short positions. At December 31, 2025, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was $2.3 billion and the fair value of the collateral that had been sold or repledged was $651.2 million.
By using derivative instruments, we are exposed to credit and market risk on those derivative positions. Credit risk is equal to the fair value gain in a derivative, if the counterparty fails to perform. When the fair value of a derivative contract is positive, this generally indicates that the counterparty owes our company and, therefore, creates a repayment risk for our company. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, have no repayment risk. We minimize the credit (or repayment) risk in derivative instruments by entering into transactions with high-quality counterparties that are reviewed periodically by senior management.
Stifel Bancorp extends credit to individual and commercial borrowers through a variety of loan products, including residential and commercial mortgage loans, home equity loans, construction loans, and non-real-estate commercial and consumer loans. Bank loans are generally collateralized by real estate, real property, or other assets of the borrower. Stifel Bancorp’s loan policy includes criteria to adequately underwrite, document, monitor, and manage credit risk. Underwriting requires reviewing and documenting the fundamental characteristics of credit, including character, capacity to service the debt, capital, conditions, and collateral. Benchmark capital and coverage ratios are utilized, which include liquidity, debt service coverage, credit, working capital, and capital to asset ratios. Lending limits are established to include individual, collective, committee, and board authority. Monitoring credit risk is accomplished through defined loan review procedures, including frequency and scope.
We are subject to concentration risk if we hold large positions, extend large loans to, or have large commitments with a single counterparty, borrower, or group of similar counterparties or borrowers (i.e., in the same industry). Securities purchased under agreements to resell consist of securities issued by the U.S. government or its agencies. Receivables from and payables to clients and stock borrow and lending activities, both with a large number of clients and counterparties, and any potential concentration are carefully monitored. Stock borrow and lending activities are executed under master netting agreements, which gives our company right of offset in the event of counterparty default. Inventory and investment positions taken and commitments made, including underwritings, may involve exposure to individual issuers and businesses. We seek to limit this risk through careful review of counterparties and borrowers and the use of limits established by our senior management group, taking into consideration factors including the financial strength of the counterparty, the size of the position or commitment, the expected duration of the position or commitment, and other positions or commitments outstanding.
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, or systems, or from external events, including, but not limited to, employee theft and fraud, accounting errors, systems and technology breakdowns, regulatory and legal failures, or business interruptions and disasters. See “Item 1A – Risk Factors” of this Form 10-K for additional discussion of operational risks.
We operate different businesses in diverse markets and are reliant on the ability of our associates and systems to process a large number of transactions. These risks are less direct than credit and market risk, but managing them is critical, particularly in a rapidly changing environment with increasing transaction volumes. In the event of a breakdown or improper operation of systems or improper action by associates, we could suffer financial loss, regulatory sanctions, and damage to our reputation. In order to mitigate and control operational risk, we have developed and continue to enhance specific policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout our company. These control mechanisms attempt to ensure that operational policies and procedures are being followed and that our various businesses are operating within established corporate policies and limits. Business continuity plans exist for critical systems, and redundancies are built into the systems as deemed appropriate.
Regulatory and Legal Risk
Legal risk includes the risk of private client group customer claims for sales practice violations. While these claims may not be the result of any wrongdoing, we do, at a minimum, incur costs associated with investigating and defending against such claims. See “Item 7 –
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” and “Item 3 – Legal Proceedings” of this Form 10-K for additional discussion of our legal proceedings. In addition, we are subject to potentially sizable adverse legal judgments or arbitration awards, and fines, penalties, and other sanctions for non-compliance with applicable legal and regulatory requirements. We are generally subject to extensive regulation by the SEC, FINRA, and state securities regulators in the different jurisdictions in which we conduct business. As a bank holding company, we are subject to regulation by the Federal Reserve. Our bank subsidiaries are subject to regulation by the FDIC. As a result, we are subject to a risk of loss resulting from failure to comply with banking laws. Our international subsidiary, SNEL, is subject to the regulatory supervision and requirements of the FCA in the United Kingdom. Our Canadian subsidiary, SNC, is subject to the regulatory supervision and requirements of the CIRO. We have comprehensive procedures addressing issues such as regulatory capital requirements, sales and trading practices, use of and safekeeping of customer funds, the extension of credit, including margin loans, collection activities, money laundering, and record keeping. We act as an underwriter or selling group member in both equity and fixed income product offerings. When acting as lead or co-lead manager, we have potential legal exposure to claims relating to these securities offerings. To manage this exposure, a committee of senior executives review proposed underwriting commitments to assess the quality of the offering and the adequacy of due diligence investigation.
Our company, as a bank and financial holding company, is subject to regulation, including capital requirements, by the Federal Reserve. Stifel Bancorp is subject to various regulatory capital requirements administered by the FDIC and state banking authorities. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our company's and Stifel Bancorp's financial statements.
Effects of Inflation
Our assets are primarily monetary, consisting of cash, securities inventory, and receivables from customers and brokers and dealers. 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 our company, such as employee compensation and benefits, communications and office supplies, and occupancy and equipment rental, which may not be readily recoverable in the price of services we offer to our clients. Further, to the extent inflation results in rising interest rates and has other adverse effects upon the securities markets, it may adversely affect our financial position and results of operations.
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 185 )
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 )
Consolidated Statements of Financial Condition
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Note 1 Nature of Operations and Basis of Presentation
Note 2 Summary of Significant Accounting Policies
Note 3 Acquisitions
Note 4 Receivables From and Payables to Brokers, Dealers, and Clearing Organizations
Note 5 Fair Value Measurements
Note 6 Financial Instruments Owned and Financial Instruments Sold, But Not Yet Purchased
Note 7 Available-for-Sale and Held-to-Maturity Securities
Note 8 Bank Loans
Note 9 Fixed Assets
Note 10 Goodwill and Intangible Assets
Note 11 Borrowings and Federal Home Loan Bank Advances
Note 12 Senior Notes
Note 13 Bank Deposits
Note 14 Derivative Instruments and Hedging Activities
Note 15 Debentures to Stifel Financial Capital Trusts
Note 16 Disclosures About Offsetting Assets and Liabilities
Note 17 Commitments, Guarantees, and Contingencies
Note 18 Legal Proceedings
Note 19 Regulatory Capital Requirements
Note 20 Operating Leases
Note 21 Revenues From Contracts With Customers
Note 22 Interest Income and Interest Expense
Note 23 Employee Incentive, Deferred Compensation, and Retirement Plans
Note 24 Off-Balance Sheet Credit Risk
Note 25 Income Taxes
Note 26 Segment Reporting
Note 27 Earnings Per Share
Note 28 Shareholders’ Equity
Note 29 Variable Interest Entities
Note 30 Subsequent Events
Report of In dependent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Stifel Financial Corp.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial condition of Stifel Financial Corp. and subsidiaries (the Company) as of December 31, 2025, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the quantitative component of the allowance for credit losses on loans collectively evaluated for impairment
As discussed in Notes 2 and 8 to the consolidated financial statements, the Company’s total allowance for credit losses on loans as of December 31, 2025 was $132.2 million, a portion of which related to the quantitative component of the allowance for credit losses on loans evaluated on a collective basis for the commercial and industrial, commercial real estate, residential real estate, and construction and land loan portfolio segments (the quantitative collective ACL).
The quantitative collective ACL includes the measure of expected credit losses on a loan portfolio segment basis for those loans that share similar risk characteristics. The quantitative collective ACL is determined using models that multiply the Company’s estimate of probability of default (PD), loss given default (LGD) and exposure at default for each loan portfolio segment. The expected credit losses for the loan portfolio segments are estimated using quantitative models that consider a variety of factors, such as historical loss experience derived from proxy data over the historical observation period, the current credit quality of the portfolio, as well as an economic outlook incorporating forward-looking information using macroeconomic forecast scenarios over a reasonable and supportable forecast period. The macroeconomic forecast scenarios include variables that have historically been key drivers of increases and decreases in credit losses. For the commercial real estate and construction and land portfolios, the Company incorporates a reasonable and supportable forecast period and then reverts to long run PD and LGD values over a one-year straight line reversion period. For the commercial and industrial and residential real estate portfolios, the Company incorporates a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets and reverts to a long-term expectation starting in years two to four of the forecast and largely completing within the first five years of the forecast. The Company leverages multiple macroeconomic forecast scenarios. The scenarios that are chosen each quarter and the amount of weighting given to each scenario depends on a variety of factors, including recent economic events, leading economic indicators,
and industry trends. Qualitative adjustments are considered in adjusting the quantitative result for the following: model imprecision, imprecision in macroeconomic scenario forecasts, or changes in the economic environment affecting specific portfolio segments that deviate from the macroeconomic scenarios.
We identified the assessment of the quantitative collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the quantitative collective ACL due to significant measurement uncertainty. Specifically, the assessment encompassed the evaluation of the quantitative collective ACL methodology, including the methods and models used to estimate the PDs and LGDs and their significant assumptions. Such significant assumptions included (1) historical loss experience derived from proxy data, (2) the historical observation period, (3) selection of macroeconomic variables (3) weighting of the macroeconomic forecast scenarios, (4) the reasonable and supportable forecast periods and (5) reversion methods. The assessment also included an evaluation of the conceptual soundness and performance of the PD and LGD models.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the quantitative collective ACL estimate, including controls over the:
design of the quantitative collective ACL methodology
continued use and conceptual soundness of the PD and LGD models
identification and determination of the significant assumptions used in the PD and LGD models
analysis of the collective ACL results, trends, and ratios.
We evaluated the Company’s process to develop the quantitative collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:
evaluating the Company’s quantitative collective ACL methodology for compliance with U.S. generally accepted accounting principles
evaluating the historical loss experience derived from proxy data and the historical observation period by assessing the composition of the peer group and comparing to specific portfolio risk characteristics
evaluating the selection of macroeconomic variables and weighting of the macroeconomic forecast scenarios by comparing it to the Company’s business environment and relevant industry practices
evaluating the reasonable and supportable forecast periods and reversion methods by comparing to specific portfolio risk characteristics and trends and relevant industry practices
assessing the conceptual soundness of the PD and LGD models by inspecting the model documentation to determine whether the models are suitable for their intended use.
/s/ KPMG LLP
We have served as the Company’s auditor since 2025.
St. Louis, Missouri
February 24, 2026
R eport of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Stifel Financial Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial condition of Stifel Financial Corp. (the Company) as of December 31, 2024, the related consolidated statements of operations, comprehensive income, changes in shareholders' equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We served as the Company’s auditor from 2008 to 2024.
St. Louis, Missouri
February 26, 2025
STIFEL FINANCIAL CORP.
Consolidated Statements of Financial Condition
December 31,
(in thousands, except share and per share amounts)
Assets
Cash and cash equivalents
Cash segregated for regulatory purposes
Receivables:
Brokerage clients, net
Brokers, dealers, and clearing organizations
Securities purchased under agreements to resell
Financial instruments owned, at fair value
Available-for-sale securities, at fair value
Held-to-maturity securities, at amortized cost
Loans:
Held for investment, net
Held for sale, at lower of cost or fair value
Investments, at fair value
Fixed assets, net
Operating lease right-of-use assets, net
Goodwill
Intangible assets, net
Loans and advances to financial advisors and other employees, net
Deferred tax assets, net
Other assets
Total assets
Liabilities
Payables:
Brokerage clients
Brokers, dealers, and clearing organizations
Drafts
Securities sold under agreements to repurchase
Bank deposits
Financial instruments sold, but not yet purchased, at fair value
Accrued compensation
Lease liabilities, net
Accounts payable and accrued expenses
Senior notes, net
Debentures to Stifel Financial Capital Trusts
Total liabilities
Equity
Preferred stock − $ 1 par value; authorized 3,000,000 shares; issued 27,400 shares
Common stock − $ 0.15 par value; authorized 194,000,000 shares;
issued 111,662,776 and 111,662,571 shares, respectively
Additional paid-in-capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost, 9,998,343 and 9,491,204 shares, respectively
Total equity
Total liabilities and equity
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statem ents of Operations
Year Ended December 31,
(in thousands, except per share amounts)
Revenues:
Commissions
Principal transactions
Investment banking
Asset management
Interest
Other income
Total revenues
Interest expense
Net revenues
Non-interest expenses:
Compensation and benefits
Occupancy and equipment rental
Communications and office supplies
Commissions and floor brokerage
Provision for credit losses
Other operating expenses
Total non-interest expenses
Income before income tax expense
Provision for income taxes
Net income
Preferred dividends
Net income available to common shareholders
Earnings per common share:
Basic
Diluted
Cash dividends declared per common share
Weighted-average number of common shares outstanding:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statements of Comprehensive Income
Year Ended December 31,
(in thousands)
Net income
Other comprehensive income/(loss), net of tax: (1)
Changes in unrealized gains on available-for-sale securities, net of tax (2)
Foreign currency translation adjustment, net of tax
Total other comprehensive income/(loss), net of tax
Comprehensive income
Net of a tax expense of $ 15.8 million, tax benefit of $ 0.4 million, and tax expense of $ 15.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
There were no reclassifications to earnings for the year ended December 31, 2025. There were no reclassifications to earnings for the year ended December 31, 2024. Net of reclassifications to earnings of realized losses of $ 5.6 million for the year ended December 31, 2023.
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statements of Ch anges in Shareholders’ Equity
Year ended December 31,
(in thousands, except per share amounts)
Preferred stock, par value $ 1.00 per share:
Balance, beginning of year
Issuance of preferred stock
Balance, end of year
Common stock, par value $ 0.15 per share:
Balance, beginning of year
Issuance of common stock
Balance, end of year
Additional paid-in-capital:
Balance, beginning of year
Unit amortization, net of forfeitures
Distributions under employee plans
Other
Balance, end of year
Retained earnings:
Balance, beginning of year
Net income
Dividends declared:
Common
Preferred
Distributions under employee plans
Other
Balance, end of year
Accumulated other comprehensive income/(loss):
Balance, beginning of year
Unrealized gains on securities, net of tax
Foreign currency translation adjustment, net of tax
Balance, end of year
Treasury stock, at cost:
Balance, beginning of year
Distributions under employee plans
Common stock repurchased
Balance, end of year
Total Shareholders’ Equity
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statem ents of Cash Flows
Year Ended December 31,
(in thousands)
Cash Flows From Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
Amortization of loans and advances to financial advisors and other employees
Amortization of premium on investment portfolio
Provision for credit losses
Amortization of intangible assets
Deferred income taxes
Stock-based compensation
Unrealized gains on investments
Gain on sale of leased aircraft engines
Other, net
Decrease/(increase) in operating assets, net of assets acquired:
Receivables:
Brokerage clients, net
Brokers, dealers, and clearing organizations
Securities purchased under agreements to resell
Financial instruments owned
Loans originated as held for sale
Proceeds from loans held for sale
Loans and advances to financial advisors and other employees, net
Other assets
Increase/(decrease) in operating liabilities, net of liabilities assumed:
Payables:
Brokerage clients
Brokers, dealers, and clearing organizations
Drafts
Financial instruments sold, but not yet purchased
Other liabilities and accrued expenses
Net cash provided by operating activities
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statements of Cash Flows (continued)
Year Ended December 31,
(in thousands)
Cash Flows From Investing Activities:
Proceeds from:
Principal paydowns, calls, and maturities of available-for-sale securities
Calls and principal paydowns of held-to-maturity securities
Sale or maturity of investments
Sale of leased aircraft engines
Decrease/(increase) in loans held for investment, net
Payments for:
Purchase of available-for-sale securities
Purchase of held-to-maturity securities
Purchase of investments
Purchase of fixed assets
Acquisitions, net of cash received
Net cash provided by/(used in) investing activities
Cash Flows From Financing Activities:
Increase in securities sold under agreements to repurchase
Increase in bank deposits, net
Increase in securities loaned
Tax payments related to shares withheld for stock-based compensation plans
Repayment of short-term debt
Repayment of senior notes
Repurchase of common stock
Cash dividends on preferred stock
Cash dividends paid to common stock and equity-award holders
Payment of contingent consideration
Extinguishment of Stifel Financial Capital Trust
Net cash provided by/(used in) financing activities
Effect of exchange rate changes on cash
Increase/(decrease) in cash, cash equivalents, and cash segregated for regulatory purposes
Cash, cash equivalents, and cash segregated for regulatory purposes at beginning of year
Cash, cash equivalents, and cash segregated for regulatory purposes at end of year
Cash and cash equivalents
Cash segregated for regulatory purposes
Total cash, cash equivalents, and cash segregated for regulatory purposes
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Consolidated Statements of Cash Flows (continued)
Year Ended December 31,
(in thousands)
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes, net of refunds
Noncash investing and financing activities:
Transfer of loans held for investment to held for sale
Transfer of loans held for sale to held for investment
Unit grants, net of forfeitures
See accompanying Notes to Consolidated Financial Statements.
STIFEL FINANCIAL CORP.
Notes to Consolidated Financial Statements
NOTE 1 – Nature of Operation s and Basis of Presentation
Nature of Operations
Stifel Financial Corp. (the “Company”), through its wholly owned subsidiaries, is principally engaged in retail brokerage; securities trading; investment banking; investment advisory; retail, consumer, and commercial banking; and related financial services. Our major geographic area of concentration is throughout the United States, the United Kingdom, Europe, and Canada. Our company’s principal customers are individual investors, corporations, municipalities, and institutions. We have organized our operations into three reportable segments: Global Wealth Management, Institutional Group, and Other. See Note 26 for additional information on segment reporting.
Basis of Presentation
The consolidated financial statements include Stifel Financial Corp. and its wholly owned subsidiaries, principally Stifel, Nicolaus & Company, Incorporated (“Stifel”), Keefe, Bruyette & Woods, Inc. (“KBW”), Stifel Bancorp, Inc. (“Stifel Bancorp”), Stifel Nicolaus Canada Inc. (“SNC”), and Stifel Nicolaus Europe Limited (“SNEL”). Unless otherwise indicated, the terms “we,” “us,” “our,” or “our company” in this report refer to Stifel Financial Corp. and its wholly owned subsidiaries.
The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, which require management to make certain estimates and assumptions that affect the reported amounts. We consider significant estimates, which are most susceptible to change and impacted significantly by judgments, assumptions, and estimates, to be: valuation of financial instruments and investments in partnerships, accrual for contingencies, allowance for credit losses, derivative instruments and hedging activities, fair value of goodwill and intangible assets, provision for income taxes and related tax reserves, and forfeitures associated with stock-based compensation. Actual results could differ from those estimates.
Certain amounts from prior periods have been reclassified to conform to the current period’s presentation. The effect of these reclassifications on our company’s previously reported consolidated financial statements was not material.
Consolidation Policies
The consolidated financial statements include the accounts of Stifel Financial Corp. and its subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.
We have investments or interests in other entities for which we must evaluate whether to consolidate by determining whether we have a controlling financial interest or are considered to be the primary beneficiary. Under our current consolidation policy, we consolidate those entities where we have the power to direct the activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of the entity or the rights to receive benefits from the entity that could potentially be significant to the entity. When we do not have a controlling interest in an entity, but we exert significant influence over the entity, we apply the equity method of accounting.
We determine whether we are the primary beneficiary of a variable interest entity (“VIE”) by performing an analysis of the VIE’s control structure, expected benefits and losses, and expected residual returns. This analysis includes a review of, among other factors, the VIE’s capital structure, contractual terms, which interests create or absorb benefits or losses, variability, related party relationships, and the design of the VIE. We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances. See Note 29 for additional information on VIEs.
NOTE 2 – Summary of Signif icant Accounting Policies
Cash and Cash Equivalents
We consider money market mutual funds and highly liquid investments with original maturities of three months or less that are not restricted or segregated to be cash equivalents. Cash and cash equivalents include deposits with banks, federal funds sold, money market mutual funds, and certificates of deposit. Cash and cash equivalents also include balances that our bank subsidiaries maintain at the Federal Reserve Bank.
Cash Segregated for Regulatory Purposes
Our broker-dealer subsidiaries are subject to Rule 15c3-3 under the Securities Exchange Act of 1934, which requires our company to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of its clients. In accordance with Rule 15c3-3, Stifel has portions of its cash segregated for the exclusive benefit of clients at December 31, 2025.
Brokerage Client Receivables, Net
Brokerage client receivables include receivables of our company’s broker-dealer subsidiaries, which represent amounts due on cash and margin transactions and are generally collateralized by securities owned by clients. The brokerage client receivables 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 receivables are reported at their outstanding principal balance net of allowance for credit losses. When a brokerage client receivable is considered to be impaired, the amount of the impairment is generally measured based on the fair value of the securities acting as collateral, which is measured based on current prices from independent sources, such as listed market prices or broker-dealer price quotations. Securities owned by customers, including those that collateralize margin or other similar transactions, are not reflected in the consolidated statements of financial condition.
Securities Borrowed and Securities Loaned
Securities borrowed require our company to deliver cash to the lender in exchange for securities and are included in receivables from brokers, dealers, and clearing organizations in the consolidated statements of financial condition. For securities loaned, we generally receive collateral in the form of cash in an amount in excess of the market value of securities loaned. Securities loaned are included in payables to brokers, dealers, and clearing organizations in the consolidated statements of financial condition. We monitor the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary. Fees received or paid are recorded in interest revenue or interest expense in the consolidated statements of operations.
Substantially all of these transactions are executed under master netting agreements, which gives us right of offset in the event of counterparty default; however, such receivables and payables with the same counterparty are not set off in the consolidated statements of financial condition.
Securities Purchased Under Agreements to Resell and Repurchase Agreements
Securities purchased under agreements to resell (“resale agreements”) are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. We obtain control of collateral with a market value equal to or in excess of the principal amount loaned and accrued interest under resale agreements. These agreements are short-term in nature and are generally collateralized by U.S. government securities, U.S. government agency securities, and corporate bonds. We value collateral on a daily basis, with additional collateral obtained when necessary to minimize the risk associated with this activity.
Securities sold under agreements to repurchase (“repurchase agreements”) are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. We make delivery of securities sold under agreements to repurchase and monitor the value of collateral on a daily basis. When necessary, we will deliver additional collateral.
Financial Instruments
We measure certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents, financial instruments owned, available-for-sale securities, investments, financial instruments sold, but not yet purchased, and derivatives. Other than those separately discussed in the notes to the consolidated financial statements, the remaining financial instruments are generally short-term in nature, and their carrying values approximate fair value.
The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., “the exit price”) in an orderly transaction between market participants at the measurement date. We have categorized our financial instruments measured at fair value into a three-level classification in accordance with Topic 820, “Fair Value Measurement,” which established a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs reflect our assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the transparency of inputs as follows:
Level 1 – Quoted prices (unadjusted) are available in active markets for identical assets or liabilities as of the measurement date. A quoted price for an identical asset or liability in an active market provides the most reliable fair value measurement, because it is directly observable to the market.
Level 2 – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the measurement date. The nature of these financial instruments includes instruments for which quoted prices are available but traded less frequently, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed.
Level 3 – Instruments that have little to no pricing observability as of the measurement date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
Valuation of Financial Instruments
When available, we use observable market prices, observable market parameters, or broker or dealer prices (bid and ask prices) to derive the fair value of financial instruments. In the case of financial instruments transacted on recognized exchanges, the observable market prices represent quotations for completed transactions from the exchange on which the financial instrument is principally traded.
A substantial percentage of the fair value of our financial instruments owned, available-for-sale securities, investments, and financial instruments sold, but not yet purchased, are based on observable market prices, observable market parameters, or derived from broker or dealer prices. The availability of observable market prices and pricing parameters can vary from product to product. Where available, observable market prices and pricing or market parameters in a product may be used to derive a price without requiring significant judgment. In certain markets, observable market prices or market parameters are not available for all products, and fair value is determined using techniques appropriate for each particular product. These techniques involve some degree of judgment.
For investments in illiquid or privately held securities that do not have readily determinable fair values, the determination of fair value requires us to estimate the value of the securities using the best information available. Among the factors we consider in determining the fair value of investments are the cost of the investment, terms and liquidity, developments since the acquisition of the investment, the sales price of recently issued securities, the financial condition and operating results of the issuer, earnings trends and consistency of operating cash flows, the long-term business potential of the issuer, the quoted market price of securities with similar quality and yield that are publicly traded, and other factors generally pertinent to the valuation of investments. In instances where a security is subject to transfer restrictions, the value of the security is based primarily on the quoted price of a similar security without restriction but may be reduced by an amount estimated to reflect such restrictions. The fair value of these investments is subject to a high degree of volatility and may be susceptible to significant fluctuation in the near term, and the differences could be material.
The degree of judgment used in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established, and the characteristics specific to the transaction. Financial instruments with readily available active quoted prices for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment used in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment used in measuring fair value. See Note 5 for additional information on how we value our financial instruments.
Available-for-Sale and Held-to-Maturity Securities
Securities available for sale, which are carried at fair value, include U.S. government agency securities; state and municipal securities; agency, non-agency, and commercial mortgage-backed securities; corporate fixed income securities; and asset-backed securities, which primarily includes collateralized loan obligations.
Securities held to maturity are recorded at amortized cost based on our company’s positive intent and ability to hold these securities to maturity. Securities held to maturity include asset-backed securities, consisting of collateralized loan obligation securities and student loan ARS.
We evaluate each available-for-sale security where the value has declined below amortized cost. If our company intends to sell or believes it is more likely than not that it will be required to sell the debt security, it is written down to fair value through earnings. For available-for-sale debt securities our company intends to hold, we evaluate the debt securities for expected credit losses except for debt securities that are guaranteed by the U.S. Treasury or U.S. government agencies where we apply a zero credit loss assumption.
For the remaining available-for-sale debt securities, we consider qualitative parameters such as internal and external credit ratings and the value of underlying collateral. If an available-for-sale debt security fails any of the qualitative parameters, a discounted cash flow analysis is used by our company to determine if a portion of the unrealized loss is a result of a credit loss. Any credit losses determined are recognized as an increase to the allowance for credit losses through provision expense recorded in the consolidated statement of operations in provision for credit losses. Cash flows expected to be collected are estimated using all relevant information available, such as remaining payment terms, prepayment speeds, the financial condition of the issuer, expected defaults, and the value of the underlying collateral. If any of the decline in fair value is related to market factors, that amount is recognized in accumulated other comprehensive income. In certain instances, the credit loss may exceed the total decline in fair value, in which case, the allowance recorded is limited to the difference between the amortized cost and the fair value of the asset. We separately evaluate our held-to-maturity debt securities for any credit losses. We perform a discounted cash flow analysis to estimate any credit losses, which are then recognized as part of the allowance for credit losses. For available-for-sale and held-to-maturity debt securities, we have established a nonaccrual policy that results in timely write-off of accrued interest. See Note 7 for more information.
Unrealized gains and losses on our available-for-sale securities are reported, net of taxes, in accumulated other comprehensive income included in shareholders’ equity. Amortization of premiums and accretion of discounts are recorded as interest income in the consolidated statements of operations using the interest method. Realized gains and losses from sales of securities available for sale are determined on a specific identification basis and are included in other income in the consolidated statements of operations in the period they are sold.
Bank Loans, Net
We classify loans based on our investment strategy and management’s assessment of our intent and ability to hold loans for the foreseeable future or until maturity. Management’s intent and ability with respect to certain loans may change from time to time depending on a number of factors, including economic, liquidity, and capital conditions. The accounting and measurement framework for loans differs depending on the loan classification. The classification criteria and accounting and measurement framework for loans held for investment and loans held for sale are described below.
Loans Held for Investment
We provide retail and commercial banking services to private and corporate clients, including a range of personal lending solutions such as fixed- and adjustable-rate mortgage loans, home equity lines of credit, fund banking, unsecured personal loans, loans secured by certificates of deposit or savings accounts, and securities-based lending. Bank loans consist of commercial and residential mortgage loans, commercial and industrial loans, stock-secured loans, home equity loans, construction loans, and consumer loans originated or acquired by Stifel Bancorp. Bank loans include those loans that management has the intent and ability to hold and are recorded at outstanding principal adjusted for any charge-offs, allowance for credit losses, deferred origination fees and costs, and purchased discounts. Loan origination costs, net of fees, and premiums and discounts on purchased loans are deferred and recognized over the contractual life of the loan as an adjustment of yield using the interest method. Bank loans are generally collateralized by real estate, real property, marketable securities, or other assets of the borrower. Interest income is recognized using the effective interest rate method, which is based upon the respective interest rates and the average daily asset balance. Discount accretion/premium amortization is recognized using the effective interest rate method, which is based upon the respective interest rate and expected lives of loans.
Loans Held for Sale
Certain residential mortgage loans originated and intended for sale in the secondary market due to their fixed interest rate terms are carried at the lower of cost or estimated fair value. The fair values of the residential mortgage loans held for sale are estimated using observable prices obtained from counterparties for similar loans. These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.
We purchase the guaranteed portions of Small Business Administration (“SBA”) loans and account for these loans at the lower of cost or estimated fair value. We then aggregate SBA loans with similar characteristics into pools for securitization and sell these pools in the secondary market. Individual SBA loans may be sold prior to securitization. The fair values of the SBA loans which have not yet been securitized are determined based upon their committed sales price, third-party price quotes, or are determined using a third-party pricing service. These nonrecurring fair value measurements are classified within Level 2 of the fair value hierarchy.
Once the SBA loans are securitized into a pool, the respective securities are classified as trading instruments based on our intention to sell the securities and are carried at fair value. Sales of the securitizations are accounted for as of settlement date, which is the date we have surrendered control over the transferred assets. We do not retain any interest in the securitizations once they are sold.
Gains and losses on sales of residential mortgage loans held for sale, SBA loans that are not part of a securitized pool, and corporate loans transferred from the held for investment portfolio, are included as a component of other income in the consolidated statements of operations.
Unfunded Lending Commitments
We have outstanding at any time a significant number of commitments to extend credit and other credit-related off-balance-sheet financial instruments such as revolving lines of credit, standby letters of credit, and loan purchases. Our policy is generally to require customers to pledge collateral at the time of closing. The amount of collateral pledged, if it is deemed necessary upon extension of credit, is based on our credit evaluation of the borrower. Collateral securing unfunded lending commitments varies but may include assets such as marketable securities, accounts receivable, inventory, real estate, and income-producing commercial properties.
In the normal course of business, we issue or participate in the issuance of standby letters of credit whereby we provide an irrevocable guarantee of payment in the event the letter of credit is drawn down by the beneficiary. These standby letters of credit generally expire in one year or less. If a letter of credit is drawn down, we would pursue repayment from the party under the existing borrowing relationship or would liquidate collateral, or both. The proceeds from repayment or liquidation of collateral are expected to satisfy the amounts drawn down under the existing letters of credit.
Loan Modifications
In the normal course of business, we may modify the original terms of a loan agreement. In certain circumstances, we may agree to modify the original terms of a loan agreement to a borrower experiencing financial difficulty, which may include a borrower in default, financial distress, bankruptcy, or other circumstances. Modifications of loans to borrowers experiencing financial difficulty are designed to reduce our loss exposure while providing borrowers with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Loan modifications to borrowers experiencing financial difficulty typically involve principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay (i.e., payment or maturity forbearance greater than six months), or a
term extension, or any combination thereof. Modified loans to borrowers experiencing financial difficulty are subject to our nonaccrual policies. See the Nonperforming Loans section below for information on our nonaccrual policies.
Nonperforming Loans
Nonperforming loans include those loans which have been placed on nonaccrual status and any accruing loans which are 90 days or more past due and in the process of collection.
Loans of all classes are generally placed on nonaccrual status when we determine that full payment of all contractual principal and interest is in doubt or the loan is past due 90 days or more as to contractual interest or principal unless the loan, in our opinion, is well-secured and in the process of collection. When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is written off against interest income and accretion of the net deferred loan origination fees ceases.
Most loans are returned to an accrual status when the loans have been brought contractually current with the original or amended terms and have been maintained on a current basis for a reasonable period, generally six months. However, corporate loans that have been partially charged off generally remain on nonaccrual status until such loans are fully repaid or sold.
Bank Loan Charge-Off Policies
Corporate loans are monitored on an individual basis, and loan grades are reviewed at least quarterly to ensure they reflect the loan’s current credit risk. When we determine that it is likely that a corporate loan will not be collected in full, the loan is evaluated for a potential write down of the carrying value. After consideration of a number of factors, including the borrower’s ability to restructure the loan, alternative sources of repayment, and other factors affecting the borrower’s ability to repay the debt, the portion of the loan deemed to be a confirmed loss, if any, is charged off. For collateral-dependent loans secured by real estate, the amount of the loan considered a confirmed loss and charged off is generally equal to the difference between the recorded investment in the loan and the collateral’s appraised value less estimated costs to sell. For commercial and industrial loans, we evaluate all sources of repayment to arrive at the amount considered to be a loss and charged off.
Corporate banking and credit risk managers also meet regularly to review criticized loans (i.e., loans that are rated special mention or worse as defined by bank regulators). Additional charge-offs are taken when the value of the collateral changes or there is an adverse change in the expected cash flows.
Substantially all residential mortgage loans over 60 days past due are reviewed to determine loan status, collection strategy and charge-off recommendations. Charge-offs are typically considered on residential mortgage loans once the loans are delinquent 90 days or more and then generally taken before the loan is 120 days past due. A charge-off is taken against the allowance for credit losses for the difference between the loan amount and the amount that we estimate will ultimately be collected, based on the value of the underlying collateral less estimated costs to sell. We predominantly use broker price opinions for these valuations. If a loan remains in pre-foreclosure status for more than nine months, an updated valuation is obtained to determine if further charge-offs are necessary.
Allowance for Credit Losses
The measurement of the allowance for credit losses, which includes the allowance for credit losses and the reserve for unfunded lending commitments, is based on management’s best estimate of lifetime expected credit losses inherent in our company’s relevant financial assets.
The expected credit losses on our loan portfolio are referred to as the allowance for credit losses and are reported separately as a contra-asset to loans on the consolidated statement of financial condition. The expected credit losses for unfunded lending commitments, including standby letters of credit and binding unfunded loan commitments, are reported on the consolidated statement of financial condition in accounts payable and accrued expenses. The provision for credit losses related to the loan portfolio and the provision for unfunded lending commitments are reported in the consolidated statement of operations in provision for credit losses.
The allowance for credit losses is measured on a collectively evaluated basis when similar risk characteristics exist. For the purpose of calculating portfolio-level allowances, we have grouped our loans into eight segments (“loan portfolio segments”): commercial and industrial, commercial real estate, residential real estate, construction and land, fund banking, securities-based loans, home equity lines of credit, and other loans. When a loan does not share similar risk characteristics with other loans, the loan is evaluated for credit losses on an individual basis. Various risk characteristics are considered when determining whether the loan should be collectively evaluated, including, but not limited to, financial asset type, risk ratings, collateral type, industry of the borrower, and historical or expected credit loss patterns.
The quantitative component of the allowance for credit losses is measured at the loan portfolio segment level utilizing loan-level inputs wherever possible. The allowance for credit losses for the loan portfolio segments, excluding fund banking and securities-based lending, are calculated at the loan portfolio segment level using a non-discounted cash flow method through probability of default (“PD”)/loss given default (“LGD”) models developed by a third-party vendor. These models project a PD, which is then multiplied by the LGD and the estimated exposure at default (“EAD”) at the loan level for every period remaining in the loan’s expected life. For the fund banking and securities-based lending loan portfolio segments, the allowance for credit losses is measured at the loan portfolio segment level
using a static loss rate. The expected credit loss for loan portfolio segments using the PD/LGD models are estimated using quantitative methods that consider a variety of factors, such as historical loss experience derived from proxy data over the historical observation period, the current credit quality of the portfolio, as well as an economic outlook over a reasonable and supportable forecast period.
The expected life of the loan for closed-ended products is determined based on each loan portfolio segment. The residential real estate and home equity lines of credit portfolios determine the expected life of the loan based on the contractual maturity of the loan adjusted for any expected prepayments. For commercial and industrial, construction and land, and commercial real estate, the expected life of the loan is based on the contractual maturity of the loan.
In our loss forecasting framework, we incorporate forward-looking information using macroeconomic forecast scenarios applied over the reasonable and supportable forecast period. These macroeconomic scenarios include variables that have historically been key drivers of increases and decreases in credit losses. These variables include, but are not limited to, unemployment rates, real estate prices, gross domestic product levels, corporate bond spreads, and long-term interest rate forecasts. Our macroeconomic forecast is obtained from a third-party vendor and based on a probability weighting over multiple scenarios. A two-year reasonable and supportable forecast period is used for the construction and land and commercial real estate loan portfolios, followed by a one-year straight line reversion period to long-run PD and LGD values. For commercial and industrial, residential real estate, and home equity lines of credit portfolios, we incorporate a reasonable and supportable forecast of various macroeconomic variables over the remaining life of the assets, including an assumption that each macroeconomic variable will revert to a long-term expectation starting in years two to four of the forecast and largely completing within the first five years of the forecast.
As any one macroeconomic outlook is inherently uncertain, we leverage multiple scenarios. The scenarios that are chosen each quarter and the amount of weighting given to each scenario depend on a variety of factors, including recent economic events, leading economic indicators, and industry trends. The reserve for unfunded lending commitments is estimated using the same scenarios, models, and economic data as the loan portfolio.
The allowance for credit losses includes adjustments for qualitative reserves based on our company’s assessment that may not be adequately represented in the quantitative methods or the macroeconomic assumptions described above. For example, factors that we consider include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and nonaccrual loans, the effect of external factors such as competition, and legal and regulatory requirements, among others. Further, we consider the inherent uncertainty in quantitative models that are built on historical data. As a result of the uncertainty inherent in the quantitative models, other quantitative and qualitative factors are considered in adjusting allowance amounts, including, but not limited to, the following: model imprecision, imprecision in macroeconomic forecast scenario, or changes in the economic environment affecting specific portfolio segments that deviate from the macroeconomic forecasts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Depending on changes in circumstances, future assessments of credit risk may yield materially different results from the prior estimates, which may require an increase or a decrease in the allowance for credit losses.
Investments
Our broker-dealer subsidiaries report changes in fair value of marketable and non-marketable securities in other income in the consolidated statements of operations. The fair value of marketable investments is generally based on either quoted market or dealer prices. The fair value of non-marketable securities is based on management’s estimate using the best information available, which generally consists of quoted market prices for similar securities and internally developed discounted cash flow models.
Investments in the consolidated statements of financial condition contain investments in securities that are marketable and securities that are not readily marketable. These investments are not included in our broker-dealer trading inventory or available-for-sale or held-to-maturity portfolios and represent the acquiring and disposing of debt or equity instruments for our benefit.
Fixed Assets, Net
Office equipment is depreciated on a straight-line basis over the estimated useful life of the asset of two to seven years . Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or the term of the lease. Buildings and building improvements are amortized on a straight-line basis over the estimated useful life of the asset of three to thirty-nine years . Internally developed software is amortized on a straight-line basis over the estimated useful life of the asset. Depreciation expense is recorded in occupancy and equipment rental in the consolidated statements of operations. Office equipment, leasehold improvements, and internally developed software are stated at cost net of accumulated depreciation and amortization in the consolidated statements of financial condition. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Aircraft Engines Held for Operating Lease
Aircraft engines held for operating lease are stated at cost, less accumulated depreciation and are included in fixed assets, net in the consolidated statements of financial condition. Certain costs incurred in connection with the acquisition of aircraft engines are capitalized as part of the cost of such assets. Major overhauls paid for by our company, which improve functionality or extend the original useful
life, are capitalized and depreciated over the shorter of the estimated period to the next overhaul (“deferral method”) or the remaining useful life of the equipment. We do not accrue for planned major maintenance. The cost of overhauls of aircraft engines under long-term leases, for which the lessee is responsible for maintenance during the period of the lease, are paid for by the lessee or from reimbursable maintenance reserves paid to our company in accordance with the lease and are not capitalized.
We depreciate aircraft engines on a straight-line basis over a 30-year period from the acquisition date to a 15% residual value. We review the useful life and residual values of all engines periodically as demand changes to accurately depreciate the cost of equipment over the useful life of the engines.
Goodwill and Intangible Assets
Goodwill represents the cost of acquired businesses in excess of the fair value of the related net assets acquired. We test goodwill for impairment on an annual basis and on an interim basis when certain events or circumstances exist. We test goodwill for impairment on an annual basis as of October 1 and on an interim basis when certain events or circumstances exist. Evaluating goodwill for impairment requires management to make significant judgments, including, in part, the use of unobservable inputs that are subject to uncertainty. Goodwill impairment tests are performed at the reporting unit level, which is generally at the level of or one level below our business segments. Goodwill no longer retains its association with a particular acquisition once it has been assigned to a reporting unit. As such, all the activities of a reporting unit, whether acquired or organically developed, are available to support the value of the goodwill. For both the annual and interim tests, we have the option to either (i) perform a quantitative impairment test or (ii) first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, in which case the quantitative test would be performed.
When performing a quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying amount, the goodwill impairment loss is equal to the excess of the carrying value over the fair value, limited to the carrying amount. The carrying value of each reporting unit is determined based on the capital allocated to the reporting unit. The estimated fair value of the reporting units is derived based on valuation techniques we believe market participants would use. The estimated fair values are generally determined by utilizing a discounted cash flow methodology or methodologies that incorporate price-to-book and price-to-earnings multiples of certain comparable companies for goodwill impairment testing. The Company performed impairment testing on October 1, 2025, with no impairment charges resulting from the annual impairment test.
Identifiable intangible assets, which are amortized over their estimated useful lives, are tested for potential impairment whenever events or changes in circumstances suggest that the carrying value of an asset or asset group may not be fully recoverable.
Loans and Advances to Financial Advisors and Other Employees, Net
We offer transition pay, principally in the form of upfront loans, to financial advisors and certain key revenue producers as part of our company’s overall growth strategy. These loans are generally forgiven by a charge to compensation and benefits over a five- to ten-year period if the individual satisfies certain conditions, usually based on continued employment and certain performance standards. We monitor and compare individual financial advisor production to each loan issued to ensure future recoverability. In the event that the financial advisor is no longer affiliated with us, any unpaid balance of such loan becomes immediately due and payable to us. In determining the allowance for credit losses related to former employees, management primarily considers our historical collection experience as well as other factors, including amounts due at termination, the reasons for the terminated relationship, and the former financial advisor’s overall financial position. When the review of these factors indicates that further collection activity is highly unlikely, the outstanding balance of such loan is written-off and the corresponding allowance is reduced. The aging of this receivable balance is not a determinative factor in computing our allowance for credit losses, as concerns regarding the recoverability of these loans primarily arise in the event that the financial advisor is no longer affiliated with us. We present the outstanding balance of loans to financial advisors on our consolidated statements of financial condition, net of the allowance for credit losses. Our allowance for credit losses was approximately $ 32.3 million and $ 31.7 million at December 31, 2025 and 2024, respectively.
Derivative Instruments
In order to mitigate the interest rate exposure associated with its customer transactions, the Company also enters into offsetting derivative transactions with derivative dealers. We recognize all of our derivative instruments at fair value as either assets or liabilities in the consolidated statements of financial condition, with changes in fair value recorded through earnings in principal transactions, net. These instruments are recorded in other assets or accounts payable and accrued expenses in the consolidated statements of financial condition and in the operating section of the consolidated statements of cash flows as increases or decreases of other assets and accounts payable and accrued expenses. Derivatives consist of interest rate swaps and options. Interest rate swaps are contractual agreements that convert the interest rate bases (i.e., fixed or floating) on an underlying financial asset or liability. Interest rate options grant the option holder the right to buy or sell an underlying financial instrument for a predetermined price before the contract expires. Our company’s policy is not to offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments recognized at fair value executed with the same counterparty under master netting arrangements. The accounting for changes in the fair value (i.e., gains and losses) of a derivative
instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we must also designate the hedging instrument or transaction, based upon the exposure being hedged. See Note 14 for additional details.
Revenue Recognition
Commissions
We earn commission revenue by executing, settling, and clearing transactions for clients primarily in OTC and listed equity securities, insurance products, and options. Trade execution and clearing and custody services, when provided together, represent a single performance obligation, as the services are not separately identifiable in the context of the contract. Commission revenues associated with combined trade execution and clearing and custody services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade-date. Commission revenues are generally paid on settlement date, and we record a receivable between trade date and payment on settlement date.
Principal Transactions
Financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value are recorded on a trade‑date basis with realized and unrealized gains and losses reflected in principal transactions, net in the accompanying statement of operations. Dividend income, a component of principal transactions, net, is recognized on the ex‑dividend date. We typically distribute our proprietary equity research products to our client base of institutional investors at no charge. These proprietary equity research products are accounted for as a cost of doing business.
Investment Banking
We provide our clients with a full range of capital markets and financial advisory services. Capital markets services include underwriting and placement agent services in both the equity and debt capital markets, including private equity placements, initial public offerings, follow-on offerings, and underwriting and distributing public and private debt.
Capital-raising revenues are recognized at a point in time on trade date, as the client obtains the control and benefit of the capital markets offering at that point. Costs associated with capital-raising transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded, and are recorded on a gross basis within other operating expenses in the consolidated statements of operations, as we are acting as a principal in the arrangement. Any expenses reimbursed by our clients are recognized as investment banking revenues.
Revenues from financial advisory services primarily consist of fees generated in connection with merger, acquisition, and restructuring transactions. Advisory revenues from mergers and acquisitions engagements are recognized at a point in time when the related transaction is completed, as the performance obligation is to successfully broker a specific transaction. Fees received prior to the completion of the transaction are deferred within accounts payable and accrued expenses on the consolidated statements of financial condition. Advisory revenues from restructuring engagements are recognized over time using a time-elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. A significant portion of the fees we receive for our advisory services are considered variable, as they are contingent upon a future event (e.g., completion of a transaction or third-party emergence from bankruptcy) and are excluded from the transaction price until the uncertainty associated with the variable consideration is subsequently resolved, which is expected to occur upon achievement of the specified milestone. Payment for advisory services is generally due promptly upon completion of a specified milestone or, for retainer fees, periodically over the course of the engagement. We recognize a receivable between the date of completion of the milestone and payment by the customer. Expenses associated with investment banking advisory engagements are deferred only to the extent they are explicitly reimbursable by the client, and the related revenue is recognized at the same time as the associated expense. All other investment banking advisory-related expenses, including expenses incurred related to restructuring assignments, are expensed as incurred. All investment banking advisory expenses are recognized within other operating expenses on the consolidated statements of operations, and any expenses reimbursed by our clients are recognized as investment banking revenues.
Asset management
Asset management revenues are recorded when earned, based on the period-end assets in the accounts, and consist of customer account service fees, per account fees (such as IRA fees) and wrap fees, net of external manager costs on managed accounts. We earn management and performance fees in connection with investment advisory services provided to institutional and individual clients. Investment advisory fees are charged based on the value of assets in fee-based accounts and are affected by changes in the balances of client assets due to market fluctuations and levels of net new client assets. Fees are charged either in advance based on fixed rates applied to the value of the customers’ account at the beginning of the period or periodically based on contracted rates and account performance. Contracts can be terminated at any time with no incremental payments due to our company upon termination. If the contract is terminated by the customer, fees are prorated for the period and fees charged for the post-termination period are refundable to the customer.
We earn fees from the investment partnerships that we manage or of which we are a general partner. Such management fees are generally based on the net assets or committed capital of the underlying partnerships. We have agreed, in certain cases, to waive management
fees, in lieu of making a cash contribution, in satisfaction of our general partner investment commitments to the investment partnerships. In these cases, we generally recognize our management fee revenues at the time when we are allocated a special profit interest in realized gains from these partnerships.
Interest revenue
We recognize interest revenue in the period earned based upon average or daily asset balances, contractual cash flows, and interest rates. Interest revenue represents interest earned on bank loans, investment securities, margin loans, trading inventory, cash and cash equivalents, securities borrowed transactions, and resale agreements. See Note 21 for information about revenue from contracts with customers.
Operating Leases
Our company enters into operating leases for real estate, office equipment, and other assets, substantially all of which are used in connection with its operations. We recognize, for leases longer than one year, a right-of-use asset representing the right to use the underlying asset for the lease term, and a lease liability representing the liability to make payments. The lease term is generally determined based on the contractual maturity of the lease. For leases where our company has the option to terminate or extend the lease, an assessment of the likelihood of exercising the option is incorporated into the determination of the lease term. Such assessment is initially performed at the inception of the lease and is updated if events occur that impact the original assessment.
An operating lease right-of-use asset is initially determined based on the operating lease liability, adjusted for initial direct costs, lease incentives, and amounts paid at or prior to lease commencement. This amount is then amortized over the lease term. At December 31, 2025, the right-of-use assets are included in operating lease right-of-use assets, net with the corresponding lease liabilities included in lease liabilities, net in the consolidated statements of financial condition. See Note 20 for information about operating leases.
For leases where our company ceased using the space and management has concluded that it will not derive any future economic benefits, we record an impairment of right-of-use assets.
Income Taxes
We compute income taxes using the asset and liability method, under which deferred income taxes are provided for the temporary differences between the financial statement carrying amounts and the tax basis of our company’s assets and liabilities. We establish a valuation allowance for deferred tax assets if it is more likely than not that these items will either expire before we are able to realize their benefits, or that future deductibility is uncertain.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. We recognize interest and penalties related to uncertain tax positions in provision for income taxes in the consolidated statements of operations. See Note 25 for additional information regarding income taxes.
Foreign Currency Translation
We consolidate our foreign subsidiaries, which have designated their local currency as their functional currency. Assets and liabilities of these foreign subsidiaries are translated at year-end rates of exchange. Revenues and expenses are translated at an average rate for the period. Gains or losses resulting from translating foreign currency financial statements are reflected in accumulated other comprehensive income, a separate component of Stifel Financial Corp. shareholders’ equity, net of hedging activity. Gains or losses resulting from foreign currency transactions are included in other income in the consolidated statements of operations.
Recently Adopted Accounting Guidance
Income Taxes
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 240): Improvements to Income Tax Disclosures,” which requires additional disclosure and disaggregated information in the Income Tax Rate reconciliation using both percentages and reporting currency amounts, with additional qualitative explanations of individually significant reconciling items. The updated guidance also requires disclosure of the amount of income taxes paid (net of refunds received) disaggregated by jurisdictional categories (federal (national), state, and foreign). We adopted this accounting update on a prospective basis on January 1, 2025. See Note 25 for the expanded disclosures required under this accounting update.
NOTE 3 – Ac quisitions
B. Riley Financial, Inc.
On April 7, 2025 , the Company completed the acquisition of a portion of B. Riley Financial, Inc.’s (“B. Riley”) traditional wealth management business, a deal that added 36 advisors with approximately $ 4 billion in assets under management. Consideration for this transaction consisted of cash from operations.
The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805 (“ASC Topic 805”), “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $ 16.7 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Global Wealth Management segment. Identifiable intangible assets purchased by our company consisted of customer relationships with an acquisition-date fair value of $ 5.8 million.
The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the B. Riley business. Goodwill is expected to be deductible for federal income tax purposes.
Pro forma information is not presented because the acquisition is not considered to be material, as defined by the SEC. The results of operations of B. Riley have been included in our results prospectively from the date of acquisition.
Bryan, Garnier, & Co.
On June 2, 2025 , the Company completed the acquisition of Bryan, Garnier & Co. (“Bryan Garnier”), an independent full-service investment bank focused on European technology and healthcare companies. Bryan Garnier’s product suite includes mergers & acquisitions advisory, private and public growth financing solutions, and institutional sales and execution. Bryan Garnier is headquartered in Europe with offices in Paris, London, Amsterdam, Munich, Oslo, Stockholm, and New York. Consideration for this transaction consisted of cash from operations.
The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805 (“ASC Topic 805”), “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $ 51.9 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment. Identifiable intangible assets purchased by our company consisted of investment banking backlog, non-compete agreements, and customer relationships with an acquisition-date fair value of $ 22.8 million.
The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the Bryan Garnier business. Goodwill will not be deductible for federal income tax purposes.
We recognized a liability for estimated earn-out payments. The potential earnout payable represents the amount of additional consideration that could be paid pursuant to the terms of the purchase agreement. The amount recorded as earnout payable, which is primarily based upon the estimated future operating results over a five-year period subsequent to the acquisition date, is measured at fair value as of the acquisition date. The liability for earn-out payments was $ 18.0 million at December 31, 2025. The contingent consideration accrual is included in accounts payable and accrued expenses in the consolidated statement of financial condition.
Pro forma information is not presented because the acquisition is not considered to be material, as defined by the SEC. The results of operations of Bryan Garnier have been included in our results prospectively from the date of acquisition.
CB Resource and Finance 500
On August 1, 2024 , the Company acquired Finance 500, Inc. (“Finance 500”) and CB Resource, Inc. (“CBR”), which operate as strategic partners under common ownership. Finance 500 is a brokerage and investment services provider focused on underwriting FDIC-insured Certificates of Deposit and fixed income securities trading. CBR integrates ERM, strategic and capital plan solutions, and industry analytics through its fully integrated tech-enabled platform. Consideration for this acquisition consisted of cash from operations.
The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805 (“ASC Topic 805”), “Business Combinations.” Accordingly, goodwill was measured as the excess of the acquisition-date fair value of the consideration transferred over the amount of acquisition-date identifiable assets acquired net of assumed liabilities. We recorded $ 6.8 million of goodwill in the consolidated statement of financial condition, which has been allocated to our company’s Institutional Group segment. Identifiable intangible assets purchased by our company consisted of customer relationships, acquired technology, trade name, and non-compete agreements with an acquisition-date fair value of $ 4.5 million.
The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of the CBR and Finance 500 businesses. Goodwill will not be deductible for federal income tax purposes.
Pro forma information is not presented because the acquisition is not considered to be material, as defined by the SEC. The results of operations of CBR and Finance 500 have been included in our results prospectively from the date of acquisition.
NOTE 4 – Receivables From and Payables to B rokers, Dealers, and Clearing Organizations
Amounts receivable from brokers, dealers, and clearing organizations at December 31, 2025 and 2024, included (in thousands) :
December 31,
Deposits paid for securities borrowed
Receivable from clearing organizations
Securities failed to deliver
Amounts payable to brokers, dealers, and clearing organizations at December 31, 2025 and 2024, included (in thousands) :
December 31,
Deposits received from securities loaned
Securities failed to receive
Payable to clearing organizations
Deposits paid for securities borrowed approximate the market value of the securities. Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received on settlement date.
NOTE 5 – Fair Va lue Measurements
We measure certain financial assets and liabilities at fair value on a recurring basis, including financial instruments owned, available-for-sale securities, investments, financial instruments sold, but not yet purchased, and derivatives.
We generally utilize third-party pricing services to value Level 1 and Level 2 available-for-sale investment securities, as well as certain derivatives designated as cash flow hedges. We review the methodologies and assumptions used by the third-party pricing services and evaluate the values provided, principally by comparison with other available market quotes for similar instruments and/or analysis based on internal models using available third-party market data. We may occasionally adjust certain values provided by the third-party pricing service when we believe, as the result of our review, that the adjusted price most appropriately reflects the fair value of the particular security.
Following are descriptions of the valuation methodologies and key inputs used to measure financial assets and liabilities recorded at fair value. The descriptions include an indication of the level of the fair value hierarchy in which the assets or liabilities are classified.
Financial Instruments Owned and Available-For-Sale Securities
When available, the fair value of financial instruments is based on quoted prices in active markets and reported in Level 1. Level 1 financial instruments include highly liquid instruments with quoted prices, primarily U.S. government securities and corporate fixed income and equity securities listed in active markets.
If quoted prices are not available for identical instruments, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include U.S. government agency securities, agency mortgage-backed securities, asset-backed securities, fixed income and equity securities infrequently traded, state and municipal securities, and non-agency mortgage-backed securities and sovereign debt securities, included in other in the table below.
We have identified Level 3 financial instruments to include certain asset-backed securities, corporate equity securities, and syndicated loans, included in other in the table below, with unobservable pricing inputs. Level 3 financial instruments have little to no pricing observability as of the report date. These financial instruments do not have active two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
Investments
Investments carried at fair value primarily include corporate equity securities, auction-rate securities (“ARS”), and private company investments.
Corporate equity securities are primarily valued based on quoted prices in active markets and reported in Level 1. Corporate equity securities that have little to no pricing observability are reported in Level 3.
ARS are primarily valued based upon our expectations of issuer redemptions and using internal discounted cash flow models that utilize unobservable inputs. ARS are reported as Level 3 assets. Private company investments are primarily valued based upon internally developed models. These valuations require significant management judgment due to the absence of quoted market prices, the inherent lack of liquidity, and their long-term nature. Typically, the initial costs of these investments are considered to represent fair market value, as such amounts are negotiated between willing market participants. Private company investments are primarily reported as Level 3 assets.
Investments at fair value include investments in funds, including certain money market funds that are measured at net asset value (“NAV”). The Company uses NAV to measure the fair value of its fund investments when (i) the fund investment does not have a readily determinable fair value and (ii) the NAV of the investment fund is calculated in a manner consistent with the measurement principles of investment company accounting, including measurement of the underlying investments at fair value.
The Company’s investments in funds measured at NAV include partnership interests, money market funds, mutual funds, and private equity funds. Private equity funds primarily invest in a broad range of industries worldwide in a variety of situations, including leveraged buyouts, recapitalizations, growth investments, and distressed investments. The private equity funds are primarily closed-end funds in which the Company’s investments are generally not eligible for redemption. Distributions will be received from these funds as the underlying assets are liquidated or distributed.
The general and limited partnership interests in investment partnerships were primarily valued based upon NAVs received from third-party fund managers. The various partnerships are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the funds to utilize pricing/valuation information, including independent appraisals, from third-party sources. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used as an input to value these investments.
The table below presents the fair value of our investments in, and unfunded commitments to, funds that are measured at NAV (in thousands):
December 31, 2025
December 31, 2024
Fair value of investments
Unfunded commitments
Fair value of investments
Unfunded commitments
Partnership interests
Money market funds
Mutual funds
Private equity funds
Total
Financial Instruments Sold, But Not Yet Purchased
Financial instruments sold, but not purchased, recorded at fair value based on quoted prices in active markets and other observable market data include highly liquid instruments with quoted prices, such as U.S. government securities and corporate equity securities listed in active markets, which are reported as Level 1.
If quoted prices are not available, fair values are obtained from pricing services, broker quotes, or other model-based valuation techniques with observable inputs, such as the present value of estimated cash flows, and reported as Level 2. The nature of these financial instruments include instruments for which quoted prices are available but traded less frequently, instruments whose fair value has been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data, and instruments that are fair valued using other financial instruments, the parameters of which can be directly observed. Level 2 financial instruments include agency mortgage-backed securities not actively traded, fixed income securities, equity securities infrequently traded, and state and municipal securities, included in other in the table below.
We have identified Level 3 financial instruments to include syndicated loans, included in other in the table below. Level 3 financial instruments have little to no pricing observability as of the report date. These financial instruments do not have active two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
Derivatives
Derivatives are valued using quoted market prices for identical instruments when available or observable inputs from forward and futures yield curves. The valuation models used require market observable inputs, including contractual terms, market prices, yield curves, credit curves, and measures of volatility. We have classified our derivatives as Level 2. The counterparties to most of our company’s derivative transactions represent regulated banks, bank holding companies, and derivative clearing houses. Management has determined that the counterparty credit risk associated with its derivative transactions is not significant. Accordingly, the recorded fair values for these transactions have not been adjusted to reflect counterparty credit risk.
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025, are presented below (in thousands) :
December 31, 2025
Total
Level 1
Level 2
Level 3
Financial instruments owned:
U.S. government securities
U.S. government agency securities
Agency mortgage-backed securities
Asset-backed securities
Corporate securities:
Fixed income securities
Equity securities
State and municipal securities
Other (1)
Total financial instruments owned
Available-for-sale securities:
U.S. government agency securities
State and municipal securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
Total available-for-sale securities
Investments:
Corporate equity securities
Auction rate securities
Other (2)
Investments in funds and partnerships measured at NAV
Total investments
Derivative contracts (3)
Subtotal
Cash equivalents measured at NAV
Total assets at fair value on a recurring basis
Includes syndicated loans, non-agency mortgage-backed securities, and sovereign debt.
Primarily includes private company investments.
Included in other assets in the consolidated statements of financial condition.
December 31, 2025
Total
Level 1
Level 2
Level 3
Liabilities:
Financial instruments sold, but not yet purchased:
U.S. government securities
Agency mortgage-backed securities
Corporate securities:
Fixed income securities
Equity securities
Other (4)
Total financial instruments sold, but not yet purchased
Derivative contracts (5)
Total liabilities at fair value on a recurring basis
Includes syndicated loans and state and municipal securities .
Included in accounts payable and accrued expenses in the consolidated statements of financial condition.
Assets and liabilities measured at fair value on a recurring basis as of December 31, 2024, are presented below (in thousands) :
December 31, 2024
Total
Level 1
Level 2
Level 3
Financial instruments owned:
U.S. government securities
U.S. government agency securities
Agency mortgage-backed securities
Asset-backed securities
Corporate securities:
Fixed income securities
Equity securities
State and municipal securities
Other (1)
Total financial instruments owned
Available-for-sale securities:
U.S. government agency securities
State and municipal securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
Total available-for-sale securities
Investments:
Corporate equity securities
Auction rate securities
Other (2)
Investments in funds and partnerships measured at NAV
Total investments
Derivative contracts (3)
Subtotal
Cash equivalents measured at NAV
Total assets at fair value on a recurring basis
Includes syndicated loans, non-agency mortgage-backed securities, and sovereign debt.
Primarily includes private company investments.
Included in other assets in the consolidated statements of financial condition.
December 31, 2024
Total
Level 1
Level 2
Level 3
Liabilities:
Financial instruments sold, but not yet purchased:
U.S. government securities
Agency mortgage-backed securities
Corporate securities:
Fixed income securities
Equity securities
Syndicated loans
Total financial instruments sold, but not yet purchased
Derivative contracts (4)
Total liabilities at fair value on a recurring basis
Included in accounts payable and accrued expenses in the consolidated statements of financial condition.
The following table summarizes the changes in fair value associated with Level 3 financial instruments during the year ended December 31, 2025 (in thousands) :
Year Ended December 31, 2025
Financial instruments owned
Investments
Asset-Backed Securities
Corporate Equity
Securities
Syndicated Loans
Corporate Equity
Securities
Auction Rate
Securities
Other
Balance at December 31, 2024
Unrealized gains/(losses)
Realized losses
Purchases
Sales
Redemptions
Transfers into Level 3
Net change
Balance at December 31, 2025
The following table summarizes the changes in fair value associated with Level 3 financial instruments during the year ended December 31, 2024 (in thousands) :
Year Ended December 31, 2024
Financial instruments owned
Investments
Asset-Backed Securities
Syndicated Loans
Corporate Equity
Securities
Auction Rate
Securities
Other
Balance at December 31, 2023
Unrealized gains/(losses)
Realized gains/(losses)
Purchases
Sales
Redemptions
Transfers out of Level 3
Net change
Balance at December 31, 2024
The results included in the tables above are only a component of the overall investment strategies of our company. The tables above do not present Level 1 or Level 2 valued assets or liabilities. The changes in unrealized gains/(losses) recorded in earnings for the years ended December 31, 2025 and 2024, relating to Level 3 assets still held at December 31, 2025, were immaterial.
The fair value of certain Level 3 assets was determined using various methodologies, as appropriate, including third-party pricing vendors and broker quotes. These inputs are evaluated for reasonableness through various procedures, including due diligence reviews of third-party pricing vendors, variance analyses, consideration of current market environment, and other analytical procedures.
The fair value for our auction rate securities was determined using an income approach based on an internally developed discounted cash flow model. The discounted cash flow model utilizes two significant unobservable inputs: discount rate and workout period. Significant increases in any of these inputs in isolation would result in a significantly lower fair value. On an ongoing basis, management verifies the fair value by reviewing the appropriateness of the discounted cash flow model and its significant inputs.
Fair Value of Financial Instruments
The following reflects the fair value of financial instruments as of December 31, 2025 and 2024, whether or not recognized in the consolidated statements of financial condition at fair value (in thousands) .
December 31, 2025
December 31, 2024
Carrying
Value
Estimated
Fair Value
Carrying
Value
Estimated
Fair Value
Financial assets:
Cash and cash equivalents
Cash segregated for regulatory purposes
Securities purchased under agreements to resell
Financial instruments owned
Available-for-sale securities
Held-to-maturity securities
Bank loans
Loans held for sale
Investments
Derivative contracts (1)
Financial liabilities:
Securities sold under agreements to repurchase
Bank deposits
Financial instruments sold, but not yet purchased
Senior notes
Debentures to Stifel Financial Capital Trusts
Derivative contracts (2)
Included in other assets in the consolidated statements of financial condition.
Included in accounts payable and accrued expenses in the consolidated statements of financial condition.
The following tables present the estimated fair values and fair value hierarchy of financial instruments that are not recorded at fair value in the consolidated statements of financial condition or measured at fair value on a nonrecurring basis as of December 31, 2025 and December 31, 2024 (in thousands) :
December 31, 2025
Total
Level 1
Level 2
Level 3
Financial assets:
Cash
Cash segregated for regulatory purposes
Securities purchased under agreements to resell
Held-to-maturity securities
Bank loans
Loans held for sale
Financial liabilities:
Securities sold under agreements to repurchase
Bank deposits
Senior notes
Debentures to Stifel Financial Capital Trusts
December 31, 2024
Total
Level 1
Level 2
Level 3
Financial assets:
Cash
Cash segregated for regulatory purposes
Securities purchased under agreements to resell
Held-to-maturity securities
Bank loans
Loans held for sale
Financial liabilities:
Securities sold under agreements to repurchase
Bank deposits
Senior notes
Debentures to Stifel Financial Capital Trusts
The following, as supplemented by the discussion above, describes the valuation techniques used in estimating the fair value of our financial instruments as of December 31, 2025 and 2024.
Financial Assets
Securities Purchased Under Agreements to Resell
Securities purchased under agreements to resell are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at December 31, 2025 and 2024 approximate fair value due to their short-term nature.
Held-to-Maturity Securities
Securities held to maturity are recorded at amortized cost based on our company’s positive intent and ability to hold these securities to maturity. Securities held to maturity include asset-backed securities, consisting of collateralized loan obligation securities and student loan ARS. The estimated fair value, included in the above table, is determined using several factors; however, primary weight is given to discounted cash flow modeling techniques that incorporated an estimated discount rate based upon recent observable debt security issuances with similar characteristics.
Bank Loans
The fair values of mortgage loans and commercial loans were primarily estimated using a discounted cash flow method, a form of the income approach. Discount rates were determined considering rates at which similar portfolios of loans, with similar remaining maturities, would be made and considering liquidity spreads applicable to each loan portfolio based on the secondary market. The estimated fair value of individually evaluated loans may include peer multiples, discounted cash flow, and collateral liquidation, each of which includes unobservable inputs and judgments within.
Loans Held for Sale
Loans held for sale consist of the guaranteed portion of Small Business Administration (“SBA”) loans, fixed-rate and adjustable-rate residential real estate mortgage loans, as well as commercial loans intended for sale. Loans held for sale are stated at lower of cost or fair value. Fair value is determined based on prevailing market prices for loans with similar characteristics or on sale contract prices.
Financial Liabilities
Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at December 31, 2025 and 2024 approximate fair value due to the short-term nature.
Bank Deposits
The fair value of demand deposits is equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). The carrying amounts of money market and savings accounts approximate their fair values, as substantially all of these deposits are variable-rate and short-term in nature. The fair values of fixed-rate certificates of deposit are calculated by discounting the future cash flows using discount rates based on the replacement cost of funding of similar structures and terms.
Senior Notes
The fair value of our senior notes is estimated based upon quoted market prices.
Debentures to Stifel Financial Capital Trusts
The fair value of our trust preferred securities is based on the discounted value of contractual cash flows. We have assumed a discount rate based on similar type debt instruments.
These fair value disclosures represent our best estimates based on relevant market information and information about the financial instruments. Fair value estimates are based on judgments regarding future expected losses, current economic conditions, risk characteristics of the various instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in the above methodologies and assumptions could significantly affect the estimates.
NOTE 6 – Financial Instruments Owned and Finan cial Instruments Sold, But Not Yet Purchased
The components of financial instruments owned and financial instruments sold, but not yet purchased, at December 31, 2025 and 2024, are as follows (in thousands) :
December 31,
Financial instruments owned:
U.S. government securities
U.S. government agency securities
Agency mortgage-backed securities
Asset-backed securities
Corporate securities:
Fixed income securities
Equity securities
State and municipal securities
Other (1)
Financial instruments sold, but not yet purchased:
U.S. government securities
Agency mortgage-backed securities
Corporate securities:
Fixed income securities
Equity securities
Other (2)
Includes syndicated loans, non-agency mortgage-backed securities, and sovereign debt.
Includes syndicated loans and state and municipal securities.
At December 31, 2025 and 2024, financial instruments owned in the amount of $ 523.4 million and $ 597.0 million, respectively, were pledged as collateral for our repurchase agreements and short-term borrowings. Our financial instruments owned are presented on a trade-date basis in the consolidated statements of financial condition.
Financial instruments sold, but not yet purchased, represent obligations of our company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices in future periods. We are obligated to acquire the securities sold short at prevailing market prices in future periods, which may exceed the amount reflected in the consolidated statements of financial condition.
NOTE 7 – Available-for-Sale an d Held-to-Maturity Securities
The following tables provide a summary of the amortized cost and fair values of the available-for-sale securities and held-to-maturity securities at December 31, 2025 and 2024 (in thousands) :
December 31, 2025
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Fair Value
Available-for-sale securities
U.S. government agency securities
State and municipal securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
Held-to-maturity securities (2)
Asset-backed securities
December 31, 2024
Amortized
Cost
Gross
Unrealized
Gains (1)
Gross
Unrealized
Losses (1)
Fair Value
Available-for-sale securities
U.S. government agency securities
State and municipal securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
Held-to-maturity securities (2)
Asset-backed securities
Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive income.
Held-to-maturity securities are carried in the consolidated statements of financial condition at amortized cost, and the changes in the value of these securities, other than impairment charges, are not reported on the consolidated financial statements.
We are required to evaluate our available-for-sale and held-to-maturity debt securities for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 2 – Summary of Significant Accounting Policies . At December 31, 2025, we did no t have an allowance for credit losses recorded on our investment portfolio.
Accrued interest receivable for our investment portfolio at December 31, 2025 and 2024, was $ 84.1 million and $ 106.8 million, respectively, and is reported in other assets in the consolidated statements of financial condition. We do not include reserves for interest receivable in the measurement of the allowance for credit losses.
There were no sales of available-for-sale securities during the years ended December 31, 2025 and 2024. For the year ended December 31, 2023, we received proceeds of $ 2.4 million from the sale of available-for-sale securities, which resulted in a realized loss of $ 7.6 million.
The table below summarizes the amortized cost and fair values of our securities by contractual maturity (in thousands) . Expected maturities may differ significantly from contractual maturities, as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
December 31, 2025
December 31, 2024
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Available-for-sale securities
Within one year
After one year through three years
After three years through five years
After five years through ten years
After ten years
Held-to-maturity securities
After three years through five years
After five years through ten years
After ten years
The maturities of our available-for-sale (fair value) and held-to-maturity (amortized cost) securities at December 31, 2025, are as follows (in thousands) :
Within 1
Year
1-5 Years
5-10 Years
After 10
Years
Total
Available-for-sale securities
U.S. government agency securities
State and municipal securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
Held-to-maturity securities
Asset-backed securities
At December 31, 2025 and 2024, securities of $ 880.5 million and $ 842.3 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. At December 31, 2025 and 2024, securities of $ 3.3 billion and $ 2.2 billion, respectively, were pledged with the Federal Reserve discount window.
The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2025 (in thousands) :
Less than 12 months
12 months or more
Total
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Gross
Unrealized
Losses
Fair Value
Available-for-sale securities
U.S. government agency securities
Mortgage-backed securities:
Agency
Commercial
Non-agency
Corporate fixed income securities
Asset-backed securities
At December 31, 2025, the amortized cost of 204 securities classified as available for sale exceeded their fair value by $ 110.1 million, of which $ 108.7 million related to investment securities that had been in a loss position for 12 months or longer. The total fair value of these investments at December 31, 2025, was $ 1.2 billion , which was 72.5 % of our available-for-sale portfolio.
Credit Quality Indicators
The Company uses ratings assigned by nationally recognized rating agencies, which includes S&P, Moody’s, and Fitch Ratings Inc., as the primary credit quality indicator for its investment portfolio. Each security is evaluated at least quarterly. The indicators represent the rating for debt securities, as of the date presented, based on the most recent assessment performed.
At December 31, 2025, approximately 87 % of our available-for-sale securities were backed by the United States government or rated A or higher by nationally recognized rating agencies.
The following table shows the amortized cost of our held-to-maturity securities by credit quality indicator at December 31, 2025 (in thousands) :
AAA
Total
Held-to-maturity securities
Asset-backed securities
NOTE 8 – B ank Loans
The following table presents the balance and associated percentage of each major loan category in our bank loan portfolio at December 31, 2025 and 2024 (in thousands, except percentages) :
December 31, 2025
December 31, 2024
Balance
Percent
Balance
Percent
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Gross bank loans
Loans in process/(unapplied loan payments), net
Unamortized loan fees, net
Allowance for credit losses on loans
Loans held for investment, net
At December 31, 2025 and 2024, Stifel Bancorp had loans outstanding to its executive officers and directors and executive officers and directors of certain affiliated entities in the amount of $ 98.4 million and $ 39.6 million, respectively.
At December 31, 2025 and 2024, we had loans held for sale of $ 502.2 million and $ 579.0 million, respectively. For the years ended December 31, 2025, 2024, and 2023, we recognized losses, included in other income in the consolidated statements of operations, of $ 8.5 million, $ 5.0 million, and $ 1.2 million, respectively, from the sale of originated loans, net of fees and costs.
At December 31, 2025 and 2024, loans, primarily consisting of residential and commercial real estate loans of $ 8.6 billion and $ 7.9 billion, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings. At December 31, 2025 and 2024, loans of $ 3.1 billion and $ 2.5 billion, respectively, were pledged with the Federal Reserve discount window.
Accrued interest receivable for loans and loans held for sale at December 31, 2025 and 2024, was $ 90.7 million and $ 92.6 million, respectively, and is reported in other assets on the consolidated statement of financial condition.
The following tables detail activity in the allowance for credit losses on loans by portfolio segment for the years ended December 31, 2025 and 2024 (in thousands) .
Year Ended December 31, 2025
Beginning
Balance
Provision
Charge-
offs
Recoveries
Ending
Balance
Commercial and industrial
Commercial real estate
Residential real estate
Construction and land
Fund banking
Securities-based loans
Home equity lines of credit
Other
Year Ended December 31, 2024
Beginning
Balance
Provision
Charge-
offs
Recoveries
Ending
Balance
Commercial and industrial
Commercial real estate
Residential real estate
Construction and land
Fund banking
Securities-based loans
Home equity lines of credit
Other
During the year ended December, 31, 2025, we recorded $ 38.4 million of provision for credit losses, including $ 40.5 million of the reserve for credit losses for funded loans, partially offset by a release of $ 2.1 million of the allowance for credit losses on unfunded lending commitments. During the year ended December 31, 2024, we recorded $ 25.4 million of provision for credit losses, including $ 27.7 million of the reserve for credit losses for funded loans and $ 0.3 million related to employee retention awards, partially offset by a release of $ 2.6 million of the allowance for credit losses on unfunded lending commitments. For more information on our company’s credit loss accounting policies, including the allowance for credit losses, see Note 2 – Summary of Significant Accounting Policies. For more information on the reserve for unfunded lending commitments, see Note 24 – Off-Balance Sheet Credit Risk.
The following tables present the aging of the recorded investment in past due loans at December 31, 2025 and 2024, by portfolio segment (in thousands) :
December 31, 2025
Days
Past Due
90 or More
Days Past Due *
Total Past
Due
Current
Balance
Total
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Total
*There were no loans past due 90 days and still accruing interest at December 31, 2025.
December 31, 2025
Nonperforming loans with allowance
Nonperforming loans with no allowance
Total
Commercial and industrial
Construction and land
Residential real estate
Home equity lines of credit
Other
Total
December 31, 2024
Days
Past Due
90 or More
Days Past Due *
Total Past
Due
Current
Balance
Total
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Total
*There were no loans past due 90 days and still accruing interest at December 31, 2024.
December 31, 2024
Nonperforming loans with allowance
Nonperforming loans with no allowance
Total
Commercial and industrial
Construction and land
Commercial real estate
Residential real estate
Home equity lines of credit
Other
Total
Loans to borrowers experiencing financial difficulty which were modified during the years ended December 31, 2025 and 2024, were $ 100.1 million and $ 116.6 million, respectively.
The gross interest income related to individually evaluated loans, which would have been recorded, had these loans been current in accordance with their original terms, and the interest income recognized on these loans during the years ended December 31, 2025 and 2024, were immaterial to the consolidated financial statements.
Credit quality indicators
As of December 31, 2025, bank loans were primarily extended to non-investment-grade borrowers. Substantially all of these loans align with the U.S. Federal bank regulatory agencies’ definition of Pass. Loans meet the definition of Pass when they are performing and do not demonstrate adverse characteristics that are likely to result in a credit loss. When principal or interest becomes 90 days past due or when collection becomes uncertain, the accrual of interest and amortization of deferred loan origination fees is generally discontinued (“nonaccrual status”), and any accrued and unpaid interest income is reversed.
We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk. Trends in delinquency ratios are an indicator, among other considerations, of credit risk within our loan portfolio. The level of nonperforming assets represents another indicator of the potential for future credit losses. Accordingly, key metrics we track and use in evaluating the credit quality of our loan portfolio include delinquency and nonperforming asset rates, as well as charge-off rates and our internal risk ratings of the loan portfolio. In general, we are a secured lender. At December 31, 2025 and 2024, 97.1 % and 96.8 % of our loan portfolio was collateralized, respectively. Collateral is required in accordance with the normal credit evaluation process based upon the creditworthiness of the customer and the credit risk associated with the particular transaction. The Company uses the following definitions for risk ratings:
Pass . A credit exposure rated pass has a continued expectation of timely repayment, all obligations of the borrower are current, and the obligor complies with material terms and conditions of the lending agreement.
Special Mention . Extensions of credit that have potential weakness that deserve management’s close attention and, if left uncorrected, may, at some future date, result in the deterioration of the repayment prospects or collateral position.
Substandard . Obligor has a well-defined weakness that jeopardizes the repayment of the debt and has a high probability of payment default with the distinct possibility that the Company will sustain some loss if noted deficiencies are not corrected.
Doubtful . Inherent weakness in the exposure makes the collection or repayment in full, based on existing facts, conditions, and circumstances, highly improbable, and the amount of loss is uncertain.
Loans rated substandard or below are individually evaluated for loss. Loss amounts are calculated based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the observable market price of the loan or the fair value of the collateral if the loan is collateral dependent. If management determines that the loss amount is uncollectible, the amount is charged off. If the loss amount is determined to be collectible, then the amount is reserved as a specific valuation allowance. The determination of whether the loss is collectible or uncollectible is based on current financial information from the borrower, as well as any facts and information of which the Company may have knowledge.
Portfolio segments:
Real Estate . Real estate loans include residential real estate non-conforming loans, residential real estate conforming loans, commercial real estate, and home equity lines of credit. The allowance methodology related to real estate loans considers several factors, including, but not limited to, loan-to-value ratio, FICO score, home price index, delinquency status, credit limits, and utilization rates.
Commercial and industrial (“C&I”). C&I loans primarily include commercial and industrial lending used for general corporate purposes, working capital and liquidity, and “event-driven.” “Event-driven” loans support client merger, acquisition, or recapitalization activities. C&I lending is structured as revolving lines of credit, letter of credit facilities, term loans, and bridge loans. Risk factors considered in determining the allowance for credit losses on corporate loans include the borrower’s financial strength, seniority of the loan, collateral type, leverage, volatility of collateral value, debt cushion, and covenants.
Fund banking. Fund banking loans primarily include capital call lines of credit, also known as subscription lines of credit. These credit facilities are used by closed-end private investment funds (“Fund”) that have raised capital commitments from limited partners to effectively manage the Fund’s cash and bridge timing between the Fund’s investments and capital calls. The lines of credit are collateralized by a pledge of the limited partner’s contractually callable capital and the general partner’s right to call such capital as permitted in the Fund’s partnership agreement.
Securities-based loans . Securities-based loans allow clients to borrow money against the value of qualifying securities for any suitable purpose other than purchasing, trading, or carrying securities or refinancing margin debt. The majority of consumer loans are structured as revolving lines of credit and letter of credit facilities and are primarily offered through Stifel’s Pledged Asset (“SPA”) program. The allowance methodology for securities-based lending considers the collateral type underlying the loan, including the liquidity and trading volume of the collateral, position concentration, and other borrower specific factors such as personal guarantees.
Construction and land . Short-term loans used to finance the development of commercial real estate projects.
Other. Other loans include consumer and credit card lending.
Based on the most recent analysis performed, the risk category of our loan portfolio was as follows: (in thousands) :
December 31, 2025
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Total
December 31, 2024
Pass
Special Mention
Substandard
Doubtful
Total
Residential real estate
Commercial and industrial
Fund banking
Securities-based loans
Construction and land
Commercial real estate
Home equity lines of credit
Other
Total
Term Loans Amortized Cost Basis by Origination Year – December 31, 2025
Prior
Revolving Loans Amortized Cost Basis
Total
Residential real estate:
Pass
Special Mention
Substandard
Doubtful
Commercial and industrial:
Pass
Special Mention
Substandard
Doubtful
Fund banking:
Pass
Special Mention
Substandard
Doubtful
Securities-based loans:
Pass
Special Mention
Substandard
Doubtful
Commercial real estate:
Pass
Special Mention
Substandard
Doubtful
Construction and land:
Pass
Special Mention
Substandard
Doubtful
Home equity lines of credit:
Pass
Special Mention
Substandard
Doubtful
Other:
Pass
Special Mention
Substandard
Doubtful
NOTE 9 – Fi xed Assets
The following is a summary of fixed assets as of December 31, 2025 and 2024 (in thousands) :
December 31,
Office equipment
Internally developed software
Leasehold improvements
Building
Aircraft engine operating leases
Accumulated depreciation and amortization
For the years ended December 31, 2025, 2024, and 2023, depreciation and amortization totaled $ 61.1 million, $ 62.4 million, and $ 60.5 million, respectively.
Aircraft Engine Operating Leases
As of December 31, 2025, the Company had a total lease portfolio of 4 aircraft engines with a net book value of $ 16.7 million. The aircraft engines were purchased by the Company, through its subsidiaries, during 2024. See Note 29 for additional information.
During the third quarter of 2024, the Company transferred 22 aircraft engines with a net book value of $ 152.1 million from aircraft engine operating leases included in fixed assets, net to aircraft engines held for sale, included in other assets in the accompanying consolidated statements of financial condition. The Company ceases recognition of depreciation expense once an aircraft engine is classified as held for sale.
During the year ended December 31, 2025, the Company sold 14 aircraft engines with a net book value of $ 103.1 million and recognized a gain from the sale of $ 40.6 million, which is included in principal transactions in the consolidated statements of operations.
Lease income, included in other income in the consolidated statements of operations, was $ 8.5 million and $ 25.3 million, respectively, for the years ended December 31, 2025 and 2024.
NOTE 10 – Goodwill an d Intangible Assets
The carrying amount of goodwill and intangible assets attributable to each of our reporting segments is presented in the following table (in thousands) :
December 31,
Adjustments
Write-off
December 31,
Goodwill
Global Wealth Management
Institutional Group
December 31,
Adjustments
Amortization
December 31,
Intangible assets
Global Wealth Management
Institutional Group
The adjustments to goodwill and intangible assets, included in our Institutional Group segment, during the year ended December 31, 2025, are primarily attributable to the acquisition of a portion of B. Riley on April 7, 2025, and the acquisition of Bryan Garnier on June 2, 2025.
The allocation of the purchase price of these acquisitions is preliminary and will be finalized upon completion of the analysis of the fair values of the net assets as of the respective acquisition dates and the identified intangible assets. The final goodwill recorded on the consolidated statement of financial condition may differ from that reflected herein as a result of future measurement period adjustments and the recording of identified intangible assets. See Note 3 in the notes to our consolidated financial statements for additional information regarding our acquisitions.
The goodwill represents the value expected from the synergies created through the operational enhancement benefits that will result from the integration of each respective business, its employees, and customer base.
Amortizable intangible assets consist of acquired customer relationships, trade names, acquired technology, non-compete agreements, investment banking backlog, and core deposits that are amortized over their contractual or determined useful lives. Intangible assets as of December 31, 2025 and 2024, were as follows (in thousands) :
December 31, 2025
December 31, 2024
Gross
Carrying
Value
Accumulated
Amortization
Gross
Carrying
Value
Accumulated
Amortization
Customer relationships
Investment banking backlog
Trade names
Acquired technology
Non-compete agreements
Core deposits
Amortization expense related to intangible assets was $ 34.1 million, $ 23.6 million, and $ 20.9 million for the years ended December 31, 2025, 2024, and 2023, respectively, and is included in other operating expenses in the consolidated statements of operations.
The weighted-average remaining lives of the following intangible assets at December 31, 2025, are: customer relationships, 8.6 years; investment banking backlog, 0.3 years; trade names, 5.4 years; acquired technology, 8.1 years; and non-compete agreements, 3.0 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below. As of December 31, 2025, we expect amortization expense in future periods to be as follows (in thousands) :
Fiscal year
Thereafter
NOTE 11 – Borrowings and Federal Home Loan Bank Advances
Our short-term financing is generally obtained through short-term bank line financing on an uncommitted, secured basis, securities lending arrangements, repurchase agreements, advances from the Federal Home Loan Bank, term loans, and committed bank line financing on an unsecured basis. We borrow from various banks on a demand basis with company-owned securities pledged as collateral. We also have an unsecured, committed bank line available.
Our uncommitted secured lines of credit at December 31, 2025, totaled $ 880.0 million with four banks and are dependent on having appropriate collateral, as determined by the bank agreements, to secure an advance under the line. The availability of our uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied. Our peak daily borrowing on our uncommitted secured lines was $ 125.0 million during the year ended December 31, 2025. There are no compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are generally utilized to finance certain fixed income securities. At December 31, 2025, we had no outstanding balances on our uncommitted secured lines of credit.
The Federal Home Loan advances are floating-rate advances. The weighted average interest rate on these advances during the year ended December 31, 2025, was 4.60 %. The advances are secured by Stifel Bancorp’s residential mortgage loan portfolio and investment portfolio. The interest rates reset on a daily basis. Stifel Bancorp has the option to prepay these advances without penalty on the interest reset date. At December 31, 2025, there were no Federal Home Loan advances.
On September 27, 2023, the Company and Stifel (the “Borrowers”) entered into an unsecured credit agreement with a syndicate of lenders led by Bank of America, N.A., as administrative agent (the “Credit Agreement”). The Credit Agreement has a maturity date of September 27, 2028 , and provides for a committed unsecured borrowing facility for maximum aggregate borrowings of up to $ 750.0 million, depending on the amount of outstanding borrowings of the Borrowers from time to time during the duration of the Credit Agreement. The interest rates on borrowings under the Credit Agreement are variable and based on the Secured Overnight Financing Rate. The Borrowers can draw upon this line as long as certain restrictive covenants are maintained. Under the Credit Agreement, the Borrowers are required to maintain compliance with a minimum consolidated tangible net worth covenant, as defined, and a maximum consolidated total capitalization ratio covenant, as defined. In addition, Stifel is required to maintain compliance with a minimum regulatory excess net capital percentage covenant, as defined, and our bank subsidiaries are required to maintain their status as well-capitalized, as defined.
Upon the occurrence and during the continuation of an event of default, the Company’s obligations under the Credit Agreement may be accelerated and the lending commitments thereunder terminated. The Credit Agreement contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, certain events of bankruptcy and insolvency, change of control, and judgment defaults. At December 31, 2025, we had no advances on the Credit Facility and were in compliance with all covenants and currently do not expect any covenant violations.
NOTE 12 – Se nior Notes
The following table summarizes our senior notes as of December 31, 2025 and 2024 (in thousands) :
December 31,
4.00 % senior notes, due 2030 (1)
5.20 % senior notes, due 2047 (2)
Debt issuance costs, net
Senior notes, net
In May 2020, we sold in a registered underwritten public offering, $ 400.0 million in aggregate principal amount of 4.00 % senior notes due May 2030 . Interest on these senior notes is payable semi-annually in arrears. We may redeem the notes in whole or in part, at our option, at a redemption price equal to the greater of a) 100 % of their principal amount, or b) discounted present value at Treasury rate plus 50 basis points prior to February 15, 2030, and on or after February 15, 2030, at 100 % of their principal amount, and accrued and unpaid interest, if any, to the date of redemption.
In October 2017, we completed the pricing of a registered underwritten public offering of $ 200.0 million in aggregate principal amount of 5.20 % senior notes due October 2047 . Interest on the senior notes is payable quarterly in arrears. We may redeem some or all of the senior notes at any time at a redemption price equal to 100 % of the principal amount of the notes being redeemed plus accrued interest thereon to the redemption date. On October 27, 2017, we completed the sale of an additional $ 25.0 million aggregate principal amount of Notes pursuant to the over-allotment option.
Our senior notes mature as follows, based upon contractual terms (in thousands) :
Thereafter
NOTE 13 – Ba nk Deposits
Deposits consist of interest-bearing-demand deposits (primarily money market and savings accounts), non-interest-bearing demand deposits, and certificates of deposit. Deposits at December 31, 2025 and 2024, were as follows (in thousands) :
December 31,
Demand deposits (interest-bearing)
Demand deposits (non-interest-bearing)
Certificates of deposit
At December 31, 2025 and 2024, there were no time deposits that exceeded the FDIC-insured amount, and all certificate of deposit balances at December 31, 2025, were due within one year.
At December 31, 2025 and 2024, related party deposits, primarily interest-bearing and time deposits of executive officers, directors, and their affiliates were immaterial. Brokerage customers’ deposits were $ 25.6 billion and $ 27.1 billion, respectively.
NOTE 14 – De rivative Instruments and Hedging Activities
We manage the interest rate risk associated with our derivative transactions with customers by entering into offsetting positions with other derivative dealers, resulting in a substantially “matched book” portfolio. These interest rate contracts are not designated as hedging instruments for accounting purposes. Credit risk associated with its derivative transactions is managed through a variety of measures, including initial and ongoing periodic underwriting of its counterparties’ creditworthiness, establishment of customer credit limits, and collateral maintenance requirements for customer exposures that exceed certain preset thresholds.
Our policy is not to offset fair value amounts recognized for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments recognized at fair value executed with the same counterparty under master netting arrangements.
The following tables provide the notional values and fair values of our derivative instruments as of December 31, 2025 and 2024 (in thousands) :
December 31, 2025
Derivative Assets
Derivative Liabilities
Notional value
Interest rate contracts
December 31, 2024
Derivative Assets
Derivative Liabilities
Notional value
Interest rate contracts
The scheduled maturities of our derivative instruments as of December 31, 2025, are as follows (in thousands) :
Within one year
One to three years
Three to five years
Five to ten years
Ten to fifteen years
Fifteen years and thereafter
The following table presents the distribution of customer interest rate derivative transactions, by derivative product, as of December 31, 2025 and 2024 (in thousands) :
December 31,
Swaps
Written options
NOTE 15 – Debentures to Stif el Financial Capital Trusts
The following table summarizes our debentures to Stifel Financial Capital Trusts as of December 31, 2025 and 2024 (in thousands) :
December 31,
Debenture to Stifel Financial Capital Trust II (1)
Debenture to Stifel Financial Capital Trust III (2)
Debenture to Stifel Financial Capital Trust IV (3)
On August 12, 2005, we completed a private placement of $ 35.0 million of 6.38 % Cumulative Trust Preferred Securities. The trust preferred securities were offered by Stifel Financial Capital Trust II (the “Trust II”), a non-consolidated wholly owned subsidiary of our company. The trust preferred securities mature on September 30, 2035 , but may be redeemed early by our company, and in turn, the Trust II would call the debenture. The Trust II requires quarterly distributions of interest to the holders of the trust preferred securities. Distributions are payable at a floating interest rate equal to three-month LIBOR, or an appropriate alternative reference rate at the time that LIBOR ceases to be published, plus 1.70 % per annum . During 2025, we extinguished $ 5.0 million of the Trust II debentures and recorded a gain of $ 0.6 million included in other income in the accompanying consolidated statement of operations.
On March 30, 2007, we completed a private placement of $ 35.0 million of 6.79 % Cumulative Trust Preferred Securities. The trust preferred securities were offered by Stifel Financial Capital Trust III (the “Trust III”), a non-consolidated wholly owned subsidiary of our company. The trust preferred securities mature on June 6, 2037 , but may be redeemed early by our company, and in turn, Trust III would call the debenture. Trust III requires quarterly distributions of interest to the holders of the trust preferred securities. Distributions are payable at a floating interest rate equal to three-month LIBOR, or an appropriate alternative reference rate at the time that LIBOR ceases to be published, plus 1.85 % per annum .
On June 28, 2007, we completed a private placement of $ 35.0 million of 6.78 % Cumulative Trust Preferred Securities. The trust preferred securities were offered by Stifel Financial Capital Trust IV (the “Trust IV”), a non-consolidated wholly owned subsidiary of our company. The trust preferred securities mature on September 6, 2037 , but may be redeemed early by our company, and in turn, Trust IV would call the debenture. Trust IV requires quarterly distributions of interest to the holders of the trust preferred securities. Distributions are payable at a floating interest rate equal to three-month LIBOR, or an appropriate alternative reference rate at the time that LIBOR ceases to be published, plus 1.85 % per annum .
NOTE 16 – Disclosures About Off setting Assets and Liabilities
The following table provides information about financial assets and derivative assets that are subject to offset as of December 31, 2025 and 2024 (in thousands) :
As of December 31, 2025
Securities borrowing (1)
Reverse repurchase agreements (2)
Interest rate contracts (3)
Total
Gross amounts of recognized assets
Gross amounts offset in the statement of financial condition
Net amounts presented in the statement of financial condition
Gross amounts not offset in the statement of financial condition:
Amounts available for offset
Available collateral
Net amount
As of December 31, 2024
Securities borrowing (1)
Reverse repurchase agreements (2)
Interest rate contracts (3)
Total
Gross amounts of recognized assets
Gross amounts offset in the statement of financial condition
Net amounts presented in the statement of financial condition
Gross amounts not offset in the statement of financial condition:
Amounts available for offset
Available collateral
Net amount
Securities borrowing transactions are included in receivables from brokers, dealers, and clearing organizations on the consolidated statements of financial condition. Deposits paid for securities borrowed approximate the market value of the securities.
Available collateral includes securities received from the counterparty. These securities are not included on the consolidated statements of financial condition unless there is an event of default. The fair value of securities received as collateral was $ 561.3 million and $ 524.7 million at December 31, 2025 and 2024, respectively.
Available collateral includes securities received from the counterparty. These securities are not included on the consolidated statements of financial condition unless there is an event of default. The fair value of securities received as collateral was $ 19.0 million and $ 70.3 million at December 31, 2025 and 2024, respectively.
The following table provides information about financial liabilities and derivative liabilities that are subject to offset as of December 31, 2025 and 2024 (in thousands) :
As of December 31, 2025
Securities lending (4)
Repurchase agreements (5)
Interest rate contracts (6)
Total
Gross amounts of recognized liabilities
Gross amounts offset in the statement of financial condition
Net amounts presented in the statement of financial condition
Gross amounts not offset in the statement of financial condition:
Amounts available for offset
Collateral pledged
Net amount
As of December 31, 2024
Securities lending (4)
Repurchase agreements (5)
Interest rate contracts (6)
Total
Gross amounts of recognized liabilities
Gross amounts offset in the statement of financial condition
Net amounts presented in the statement of financial condition
Gross amounts not offset in the statement of financial condition:
Amounts available for offset
Collateral pledged
Net amount
Securities lending transactions are included in payables to brokers, dealers, and clearing organizations on the consolidated statements of financial condition.
Collateral pledged includes the fair value of securities pledged to the counterparty. These securities are included on the consolidated statements of financial condition unless we default. Collateral pledged by our company to the counterparty includes U.S. government agency securities, U.S. government securities, and corporate fixed income securities with market values of $ 687.2 million and $ 596.5 million at December 31, 2025 and 2024, respectively.
Collateral pledged includes the fair value of securities pledged to the counterparty. There were no securities pledged as collateral at December 31, 2025. The fair value of securities pledged as collateral was $ 21.3 million at December 31, 2024.
NOTE 17 – Commitments, Guar antees, and Contingencies
Broker-Dealer Commitments and Guarantees
In the normal course of business, we enter into underwriting commitments. Settlement of transactions relating to such underwriting commitments, which were open at December 31, 2025, had no material effect on the consolidated financial statements.
As a part of our fixed income public finance operations, we enter into forward commitments to purchase agency mortgage-backed securities. In order to hedge the market interest rate risk to which we would otherwise be exposed between the date of the commitment and date of sale of the mortgage-backed securities, we enter into to be announced (“TBA”) security contracts with investors for generic mortgage-backed securities at specific rates and prices to be delivered on settlement dates in the future. We may be subject to loss if the timing of, or the actual amount of, the mortgage-backed security differs significantly from the term and notional amount of the TBA security contract to which we entered. These TBA securities and related purchase commitment are accounted for at fair value. As of December 31, 2025, the fair value of the TBA securities and the estimated fair value of the purchase commitments was $ 156.0 million.
We also provide guarantees to securities clearinghouses and exchanges under their standard membership agreement, which requires members to guarantee the performance of other members. Under the agreement, if another member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet shortfalls. Our liability under these agreements is not quantifiable and may exceed the cash and securities we have posted as collateral. However, the potential requirement for us to make payments under these arrangements is considered remote. Accordingly, no liability has been recognized for these arrangements.
Other Commitments
In the ordinary course of business, Stifel Bancorp has commitments to extend credit in the form of commitments to originate loans, standby letters of credit, and lines of credit. See Note 24 in the notes to consolidated financial statements for further details.
Concentration of Credit Risk
We provide investment, capital-raising, and related services to a diverse group of domestic customers, including governments, corporations, and institutional and individual investors. Our exposure to credit risk associated with the non-performance of customers in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile securities markets, credit markets, and regulatory changes. This exposure is measured on an individual customer basis and on a group basis for customers that share similar attributes. To reduce the potential for risk concentrations, counterparty credit limits have been implemented for certain products and are continually monitored in light of changing customer and market conditions. As of December 31, 2025 and 2024, we did not have significant concentrations of credit risk with any one customer or counterparty, or any group of customers or counterparties.
NOTE 18 – Lega l Proceedings
The Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from our securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding our business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. The Company is contesting allegations in these claims, and it believes that there are meritorious defenses in each of these lawsuits, arbitrations, and regulatory investigations. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines, or penalties related to each pending matter. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated.
As a matter develops, the Company, in conjunction with outside counsel, evaluates whether such matter presents a loss contingency that is probable and estimable, and, for the matters disclosed below, whether a loss in excess of any accrued liability is reasonably possible in future periods. Once the loss contingency is deemed to be both probable and estimable, the Company will establish an accrued liability. The Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. As of December 31, 2025, the Company has estimated the upper end of the range of reasonably possible aggregate loss for such matters and for any other matters described below where management has been able to estimate a range of possible aggregate loss to be approximately $ 100.0 million in excess of the aggregate reserves for such matters.
The accrued liability and estimated range of possible loss are based upon currently available information and subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible loss are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual. The estimated range of possible loss does not represent the Company’s maximum loss exposure.
Based on currently available information, review with outside legal counsel, and consideration of accrued liabilities, management does not believe that loss contingencies arising from pending matters, including matters described below, will have a material adverse impact on the consolidated financial position or liquidity of the Company. However, resolution of one or more of these matters may have a material effect on the results of operations in any future period, depending upon the ultimate resolution of those matters and depending upon the level of income for such period. For matters where a liability has not been established and for which the Company believes a loss is reasonably possible, as well as for matters where an accrual has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, based on currently available information, the Company believes that such losses will not have a material effect on its consolidated financial statements.
CFTC Investigation of Communications Recordkeeping
The Company has been contacted by the Commodity Futures Trading Commission (the “CFTC”) in connection with an investigation of the Company’s compliance with records preservation requirements for off-channel communications relating to the broker-dealer or investment adviser business activities of the Company using personally owned communications devices and/or messaging platforms that have not been approved by the Company. In August 2024, the CFTC provided the Company with a settlement offer, which the Company declined to accept, and the matter has been dormant since that time. Based upon currently available information, including the absence of any activity for the past eighteen months, the Company has no reason to believe the matter will proceed further.
FINRA Arbitration Matters
On March 12, 2025, a three-person FINRA arbitration panel entered an award in a customer arbitration against the Company’s brokerage subsidiary, Stifel, in the amount of $ 132.5 million, consisting of $ 26.5 million in compensatory damages, $ 79.5 million in punitive damages, and $ 26.5 million in attorneys’ fees and costs. The arbitration involved claims by four family members arising out of their investments, principally in structured notes, through a now former Stifel private wealth advisor. The Company believes the award is legally defective and excessive in amount and has filed a petition seeking to have the award vacated. The petition was assigned to a magistrate judge for an initial report and recommendation. On February 6, 2026, the magistrate judge issued his report and recommended denying the petition. The Company intends to object to the report and recommend and seek further review, if necessary, although the Company can provide no assurance that its efforts will be successful. Based upon the terms of the magistrate’s report and recommendation, prejudgment interest has increased the amount of the award to approximately $ 143.5 million as of the present time.
This is the third adverse arbitration award against Stifel by former customers of the same former private wealth advisor relating to substantially similar investment activities. The firm has resolved some additional arbitration claims making similar allegations that were filed by other customers of the same advisor, but nineteen additional such claims have been filed that are yet to be resolved or adjudicated. The Company’s estimate of losses that may be sought by the customers whose claims have been filed but not yet resolved or adjudicated do not take into consideration claims for enhanced damages or attorneys’ fees. While we continue to believe that Stifel has viable defenses to at least limit its liability in these additional cases, we can provide no assurance that we will be able to settle these claims or will be successful in defending them on the merits, or that these claims will not result in material liability to the Company.
Cash Sweeps Litigation
Beginning in March 2025, the Company and certain of its affiliates were named as defendants in multiple putative class actions pending in the federal district court for the Eastern District of Missouri. The class action claims have been brought on behalf of customers who had cash deposits or balances in the Stifel Insured Bank Deposit Program or the Stifel Insured Bank Deposit Program for Retirement Accounts, alleging various contractual, fiduciary, and statutory claims based on the allegation that the Company failed to pay a reasonable rate of interest on its cash sweep products. Together, the complaints seek unspecified compensatory damages, equitable relief, and treble damages. The cases are at an early stage with the parties waiting for the court to appoint lead plaintiffs. While there can be no assurance that we will be successful, we intend to vigorously defend the claims.
401(k) Plan Litigation
On July 4, 2025 (Dell Complaint) and February 20, 2026 (Striplin Complaint), the Company, the Board, and its investment committee and respective members (together, the “Company Defendants”) were sued in two separate putative class actions related to the administration of the Company’s 401(k) Plan (the “Plan”) pending in federal district court for the Eastern District of Missouri. The complaints are brought on behalf of the Plan and current and former employees that are members of the Plan alleging fiduciary violations of the Employee Retirement Income Security Act (ERISA).
The Dell Complaint alleges the Company Defendants breached their fiduciary duties by causing the Plan to pay excessive recordkeeping and administrative service fees and by failing to prudently monitor and remove one of the Plan’s investment options. The Striplin Complaint alleges the Company Defendants breached their fiduciary duties by failing to prudently monitor and remove two of the Plan’s investment options. The Striplin Complaint was filed on February 20, 2026. The Company Defendants’ investigation of these allegations is in process.
Prior to the filing of the Dell Complaint, the Company identified a change in the market pricing of certain record keeping and administrative fees and a potential underperformance with certain Plan investments. The Company calculated restorative payments, funded the Plan on March 31, 2025, notified the Department of Labor through its Voluntary Fiduciary Correction Program, and on August 4, 2025, received a no-action letter from the Department of Labor. The Company Defendants filed a motion to dismiss the Dell Complaint.
Together, the Dell and Striplin Complaints seek unspecified compensatory damages, equitable relief, and plan reformation. The cases are at an early stage, and while there can be no assurance that we will be successful, the Company Defendants intend to vigorously defend these cases.
NOTE 19 – Regulatory Capital Requirements
We operate in a highly regulated environment and are subject to capital requirements, which may limit distributions to our company from its subsidiaries. Distributions from our broker-dealer subsidiaries are subject to net capital rules. A broker-dealer that fails to comply with the SEC’s Uniform Net Capital Rule (Rule 15c3-1) may be subject to disciplinary actions by the SEC and self-regulatory organizations, such as FINRA, including censures, fines, suspension, or expulsion. Stifel has chosen to calculate its net capital under the alternative method, which prescribes that their net capital shall not be less than the greater of $ 1.0 million or two percent of aggregate debit balances (primarily receivables from customers) computed in accordance with the SEC’s Customer Protection Rule (Rule 15c3-3). Our other broker-dealer subsidiaries calculate their net capital under the aggregate indebtedness method, whereby their aggregate indebtedness may not be greater than fifteen times their net capital (as defined).
At December 31, 2025, Stifel had net capital of $ 559.5 million, which was 37.7 % of aggregate debit items and $ 529.8 million in excess of its minimum required net capital. At December 31, 2024, Stifel had net capital of $ 449.5 million, which was 37.4 % of aggregate debit items and $ 425.5 million in excess of its minimum required net capital. At December 31, 2025, all of our other broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule.
Our international subsidiary, SNEL, is subject to the regulatory supervision and requirements of the Financial Conduct Authority (“FCA”) in the United Kingdom. At December 31, 2025, our international subsidiary’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA.
Our Canadian subsidiary, SNC, is subject to the regulatory supervision and requirements of the Canadian Investment Regulatory Organization (“CIRO”). At December 31, 2025, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the CIRO.
Our company, as a bank holding company, Stifel Bank & Trust, Stifel Bank, Stifel Trust Company, N.A., and Stifel Trust Company, Delaware, N.A., (collectively, “banking subsidiaries”), are subject to various regulatory capital requirements administered by the Federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our company’s and its banking subsidiaries’ financial results. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, our company and its banking subsidiaries must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Our company’s and its banking subsidiaries’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Under the Basel III rules, the quantity and quality of regulatory capital increased, a capital conservation buffer was established, selected changes were made to the calculation of risk-weighted assets, and a new ratio, common equity Tier 1, was introduced, all of which are applicable to both our company and its banking subsidiaries.
Our company and its banking subsidiaries are required to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined) to risk-weighted assets (as defined), Tier 1 capital to average assets (as defined), and under rules defined in Basel III, Common equity Tier 1 capital to risk-weighted assets. Our company and its banking subsidiaries each calculate these ratios in order to assess compliance with both regulatory requirements and their internal capital policies. At current capital levels, our company and its banking subsidiaries are each categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” our company and its banking subsidiaries must maintain total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios.
The amounts and ratios for Stifel Financial Corp., Stifel Bank & Trust, and Stifel Bank as of December 31, 2025, are represented in the tables below (in thousands, except ratios) .
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Financial Corp.
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Bank & Trust
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Bank
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
The amounts and ratios for Stifel Financial Corp., Stifel Bank & Trust, and Stifel Bank as of December 31, 2024, are represented in the tables below (in thousands, except ratios) .
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Financial Corp.
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Bank & Trust
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
Actual
For Capital
Adequacy Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
Stifel Bank
Amount
Ratio
Amount
Ratio
Amount
Ratio
Common equity tier 1 capital
Tier 1 capital
Total capital
Tier 1 leverage
NOTE 20 – Operatin g Leases
Our operating leases primarily relate to office space and office equipment with remaining lease terms of 1 to 14 years. At December 31, 2025 and 2024, operating lease right-of-use assets were $ 788.5 million and $ 809.2 million, respectively, and lease liabilities were $ 855.9 million and $ 867.4 million, respectively.
The table below summarizes our net lease cost for the years ended December 31, 2025 and 2024 (in thousands) :
Year Ended December 31,
Operating lease cost
Short-term lease cost
Variable lease cost
Sublease income
Net lease cost
Operating lease costs are included in occupancy and equipment rental in the consolidated statements of operations.
The table below summarizes other information related to our operating leases as of and for the year ended December 31, 2025 (in thousands) :
Operating lease cash flows
Right-of-use assets obtained in exchange for new operating lease liabilities
Weighted average remaining lease term (years)
Weighted average discount rate
The weighted-average discount rate represents our company’s incremental borrowing rate at the lease inception date.
The table below presents information about operating lease liabilities as of December 31, 2025, (in thousands, except percentages) :
Thereafter
Total undiscounted lease payments
Imputed interest
Present value of operating lease liabilities
NOTE 21 – Revenues From Co ntracts With Customers
The following table presents the Company’s total revenues broken out by revenues from contracts with customers and other sources of revenue for the years ended December 31, 2025 and 2024 (in thousands) :
Year Ended December 31,
Revenues from contracts with customers:
Commissions
Investment banking
Asset management
Other
Total revenue from contracts with customers
Other sources of revenue:
Interest
Principal transactions
Other
Total revenues
Revenue from contracts with customers is recognized when, or as, we satisfy our performance obligations by transferring the promised services to the customers. A service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring our progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that we determine the customer obtains control over the promised service. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties.
Disaggregation of Revenue
The following tables present the Company’s revenues from contracts with customers by reportable segment disaggregated by major business activity and primary geographic regions for the years ended December 31, 2025 and 2024 (in thousands) :
Year Ended December 31, 2025
Global Wealth Management
Institutional Group
Other
Total
Major Business Activity:
Commissions
Capital raising (1)
Advisory (1)
Investment banking
Asset management
Other
Total
Primary Geographic Region:
United States
United Kingdom
Canada
Other
(1) Excludes revenues not derived from contracts with customers in the Other segment.
Year Ended December 31, 2024
Global Wealth Management
Institutional Group
Other
Total
Major Business Activity:
Commissions
Capital raising
Advisory
Investment banking
Asset management
Other
Total
Primary Geographic Region:
United States
United Kingdom
Canada
Other
See Note 26 for further break-out of net revenues by geography.
Information on Remaining Performance Obligations and Revenue Recognized From Past Performance
We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at December 31, 2025. Investment banking advisory revenues that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price at December 31, 2025.
Contract Balances
The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied.
We had receivables related to revenues from contracts with customers of $ 176.3 million and $ 142.3 million at December 31, 2025 and December 31, 2024, respectively, in other assets in the consolidated statements of financial condition. We had no significant impairments related to these receivables during the year ended December 31, 2025.
Our deferred revenue primarily relates to retainer fees received in investment banking advisory engagements where the performance obligation has not yet been satisfied. Deferred revenue at December 31, 2025 and December 31, 2024, was $ 27.0 million and $ 19.3 million, respectively, and included in accounts payable and accrued expenses in the consolidated statements of financial condition.
NOTE 22 – Interest Incom e and Interest Expense
The components of interest income and interest expense are as follows (in thousands) :
Year Ended December 31,
Interest income:
Loans held for investment and held for sale
Investment securities
Interest-bearing cash and federal funds sold
Margin balances
Financial instruments owned
Other
Interest expense:
Bank deposits
Senior notes
Other
NOTE 23 – Employee Incentive, Deferre d Compensation, and Retirement Plans
We maintain an incentive stock plan and a wealth accumulation plan (“the Plan”) that provides for the granting of stock options, stock appreciation rights, restricted stock, performance awards, stock units, and debentures (collectively, “deferred awards”) to our associates. We are permitted to issue new shares under all stock award plans approved by shareholders or to reissue our treasury shares. Stock awards issued under our company’s incentive stock plan are granted at market value at the date of grant. Our deferred awards generally vest ratably over a one - to ten-year vesting period. We provide compensation to existing employees in the form of cash awards which are subject to ratable vesting terms with service requirements. We amortize these awards to compensation expense over the relevant service period of five years .
Our stock-based compensation plans are administered by the Compensation Committee of the Board of Directors (“Compensation Committee”), which has the authority to interpret the plans, determine to whom awards may be granted under the plans, and determine the terms of each award. According to the incentive stock plan, we were authorized to grant an additional 3.0 million shares at December 31, 2025.
Expense associated with our stock-based compensation, included in compensation and benefits expense in the consolidated statements of operations for our company’s incentive stock award plan was $ 147.2 million, $ 146.8 million, and $ 137.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. Additionally, the tax benefit associated with the stock-based compensation expense was $ 26.0 million, $ 27.6 million, and $ 27.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. The excess tax benefit related to stock-based compensation that vested during the year was $ 52.8 million, $ 53.9 million, and $ 36.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Expense associated with our debentures, included in compensation and benefits expense in the consolidated statements of operations was $ 117.0 million, $ 110.0 million, and $ 105.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. At December 31, 2025 and 2024, there was $ 236.2 million and $ 220.3 million, respectively, of debenture and interest payable, which is included in accrued compensation in the consolidated statements of financial condition.
Expense associated with cash awards, included in compensation and benefits expense in the consolidated statements of operations was $ 18.3 million, $ 12.3 million, and $ 0.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. At December 31, 2025 and 2024, there was $ 43.6 million and $ 57.7 million, respectively, of cash awards, net, which is included in loans and advances to financial advisors and other employees, net in the consolidated statements of financial condition.
Deferred Awards
A restricted stock unit represents the right to receive a share of the Company’s common stock at a designated time in the future without cash payment by the associate and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units vest on an annual basis over the next one to ten years and are distributable, if vested, at future specified dates. Restricted stock awards are restricted as to sale or disposition. These restrictions lapse over the next year.
The Company grants Performance-based Restricted Stock Units (“PRSUs”) to certain of its executive officers. Under the terms of the grants, the number of PRSUs that will vest and convert to shares will be based on the Company’s achievement of the pre-determined performance objectives during the performance period. The PRSUs will be measured over a four-year performance period and vested over a five-year period. Any resulting delivery of shares for PRSUs granted as part of compensation will occur after four years for 80 %
of the earned award, and in the fifth year for the remaining 20 % of the earned award. The number of shares converted has the potential to range from 0 % to 200 % based on how the Company performs during the performance period. Compensation expense is amortized over the service period based on the fair value of the deferred award on the grant date. The Company’s pre-determined performance objectives must be met for the awards to vest. Associates forfeit unvested deferred awards upon termination of employment with a corresponding reversal of compensation expense. Certain deferred awards may continue to vest under certain circumstances as described in the Plan. At December 31, 2025, the total number of restricted stock units, PRSUs, and restricted stock awards outstanding was 11.8 million, of which 10.9 million were unvested.
A summary of unvested restricted equity award activity, which includes restricted stock units and restricted stock awards, for the year ended December 31, 2025, is presented below (in thousands, except weighted-average fair value) :
Weighted-average grant date fair value
Unvested December 31, 2024
Granted
Vested
Cancelled
Unvested December 31, 2025
At December 31, 2025, there was approximately $ 733.8 million of unrecognized compensation cost for all deferred awards, which is expected to be recognized over a weighted-average period of 2.7 years.
The fair value of restricted stock units and restricted stock that vested or converted during the year ended December 31, 2025, was $ 126.8 million.
Deferred Compensation Plans
The Plan is provided to certain revenue producers, officers, and key administrative associates, whereby a certain percentage of their incentive compensation is deferred as defined by the Plan into company stock units, restricted stock, and debentures. Participants may elect to defer a portion of their incentive compensation. Deferred awards generally vest over a one - to ten-year period and are distributable upon vesting or at future specified dates. Deferred compensation costs are amortized on a straight-line basis over the vesting period. Elective deferrals are 100 % vested.
Additionally, the Plan allows Stifel financial advisors who achieve certain levels of production the ability to earn deferred awards. These financial advisors can earn 5-6% of their gross commissions that is contributed to their mandatory deferral. The mandatory deferral is split between company restricted stock units and debentures. They have the option to defer an additional 1 % of gross commissions into company stock units.
In addition, certain revenue producers, upon joining the Company, may receive company stock units in lieu of transition cash payments. Deferred compensation related to these awards generally vests over a one - to eight-year period. Deferred compensation costs are amortized on a straight-line basis over the deferral period.
Profit Sharing Plan
Eligible U.S. associates of the Company who have met certain service requirements may participate in the Stifel Financial Corp. Profit Sharing 401(k) Plan (the “401(k) Plan”). Associates are permitted within limitations imposed by tax law to make pre-tax contributions to the 401(k) Plan. We may match certain associate contributions or make additional contributions to the 401(k) Plan at our discretion. Our contributions to the 401(k) Plan, included in compensation and benefits in the consolidated statements of operations, were $ 23.5 million, $ 18.5 million, and $ 17.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.
NOTE 24 – Off-Balanc e Sheet Credit Risk
In the normal course of business, we execute, settle, and finance customer and proprietary securities transactions. These activities expose our 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 generally settle within one business day after trade date. Should a customer or broker fail to deliver cash or securities as agreed, we may be required to purchase or sell securities at unfavorable market prices.
We borrow and lend securities to facilitate the settlement process and finance transactions, utilizing customer margin securities held as collateral. We monitor the adequacy of collateral levels on a daily basis. We periodically borrow 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, we are subject to the risk of acquiring the securities at prevailing market prices in order to satisfy our customer obligations. We control our exposure to credit risk by continually monitoring our counterparties’ positions, and where deemed necessary, we may require a deposit of additional collateral and/or a reduction or diversification of positions. Our company sells securities it does not currently own (short sales) and is obligated to subsequently purchase such securities at prevailing market prices. We are exposed to risk of loss if
securities prices increase prior to closing the transactions. We control our exposure to price risk from short sales through daily review and setting position and trading limits.
We manage our risks associated with the aforementioned transactions through position and credit limits and the continuous monitoring of collateral. Additional collateral is required from customers and other counterparties when appropriate.
We have accepted collateral in connection with resale agreements, securities borrowed transactions, and customer margin loans. Under many agreements, we are permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or to deliver to counterparties to cover short positions. At December 31, 2025 and 2024, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was $ 2.3 billion and $ 2.0 billion, respectively, and the fair value of the collateral that had been sold or repledged was $ 651.2 million and $ 580.2 million, respectively.
We enter into interest rate derivative contracts to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are principally used to manage differences in the amount, timing, and duration of our known or expected cash payments related to certain variable-rate affiliated deposits. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments. Our interest rate hedging strategies may not work in all market environments and, as a result, may not be effective in mitigating interest rate risk.
Derivatives’ notional contract amounts are not reflected as assets or liabilities in the consolidated statements of financial condition. Rather, the market or fair value of the derivative transactions are reported in the consolidated statements of financial condition as other assets or accounts payable and accrued expenses, as applicable. For a complete discussion of our activities related to derivative instruments, see Note 14 in the notes to consolidated financial statements.
In the ordinary course of business, Stifel Bancorp has commitments to originate loans, standby letters of credit, and lines of credit. Commitments to originate loans are agreements to lend to a customer as long as there is no violation of any condition established by the contract. These commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash commitments. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if necessary, is based on the credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate, and residential real estate.
At December 31, 2025 and 2024, Stifel Bancorp had outstanding commitments to originate loans aggregating $ 267.6 million and $ 207.2 million, respectively. The commitments extended over varying periods of time, with all commitments at December 31, 2025, scheduled to be disbursed in the following three months.
Through Stifel Bancorp, in the normal course of business, we originate residential mortgage loans and sell them to investors. We may be required to repurchase mortgage loans that have been sold to investors in the event there are breaches of certain representations and warranties contained within the sales agreements. We may be required to repurchase mortgage loans that were sold to investors in the event that there was inadequate underwriting or fraud, or in the event that the loans become delinquent shortly after they are originated. We also may be required to indemnify certain purchasers and others against losses they incur in the event of breaches of representations and warranties and in various other circumstances, and the amount of such losses could exceed the repurchase amount of the related loans. Consequently, we may be exposed to credit risk associated with sold loans.
Standby letters of credit are irrevocable conditional commitments issued by Stifel Bancorp to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Should Stifel Bancorp be obligated to perform under the standby letters of credit, it may seek recourse from the customer for reimbursement of amounts paid. At December 31, 2025 and 2024, Stifel Bancorp had outstanding letters of credit totaling $ 91.9 million and $ 40.6 million, respectively. A majority of the standby letters of credit commitments at December 31, 2025, have expiration terms that are less than one year .
Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Stifel Bancorp uses the same credit policies in granting lines of credit as it does for on-balance sheet instruments. At December 31, 2025 and 2024, Stifel Bancorp had granted unused lines of credit to commercial and consumer borrowers aggregating $ 5.4 billion and $ 5.4 billion, respectively.
We are required to evaluate our loan portfolio for any expected losses with recognition of an allowance for credit losses, when applicable. At December 31, 2025 and 2024, the expected credit losses for unfunded lending commitments was $ 28.7 million and $ 30.7 million, respectively.
NOTE 25 – I ncome Taxes
Income before income tax expense for the year ended December 31, 2025 (in thousands) :
Domestic
Foreign
Income before income tax expense
The provision for income taxes consists of the following (in thousands) :
Year Ended December 31,
Current taxes:
Federal
State
Foreign
Deferred taxes:
Federal
State
Foreign
Provision for income taxes:
Federal
State
Foreign
The following table presents income taxes paid, net of refunds, disaggregated by jurisdiction for the year ended December 31, 2025 (in thousands) :
Federal (includes amounts paid for transferable tax credits)
State and Local
Missouri *
Other
Foreign
Ireland *
Other
Total income taxes paid
* Exceeds 5 % of total income taxes paid, net of refunds, for the year ended December 31, 2025.
As discussed in Note 2 – Summary of Significant Accounting Policies , we adopted ASU 2023-09 on January 1, 2025, on a prospective basis. As a result, our rate reconciliation for the year ended December 31, 2025, is presented in accordance with the new disclosure requirements, while the reconciliations for the years ended December 31, 2024 and 2023, respectively, continue to be presented under disclosure requirements in effect for those periods.
Reconciliation of the statutory federal income tax rate with our company’s effective income tax rate is as follows for the year ended December 31, 2025, after the adoption of ASU 2023-09 (in thousands) :
Year Ended December 31, 2025
Income before income tax expense
Statutory rate
State and local income taxes, net of federal income tax effect *
Foreign tax effects:
Other foreign jurisdictions
Effect of cross-border tax laws
Tax credits:
Purchased federal tax credit benefit
Other tax credits
Nontaxable or nondeductible items:
Share-based payment awards
Compensation in excess of $ 1 million
Other nondeductible items
Changes in unrecognized tax benefits
Other adjustments
Effective tax rate
* The states and local jurisdictions that make up the majority (greater than 50%) of the state and local income tax, net of federal income tax effect are New York, Missouri, New York City, and California.
Reconciliation of the statutory federal income tax rate with our company’s effective income tax rate is as follows for the years ended December 31, 2024 and 2023, before the adoption of ASU 2023-09 (in thousands) :
Year Ended December 31,
Statutory rate
State income taxes, net of federal income tax
Non-deductible business expenses
Change in valuation allowance
Foreign tax rate difference
Federal tax credits
Excess tax benefit from stock-based compensation
Other, net
Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities (in thousands) :
December 31,
Deferred tax assets:
Lease liabilities
Deferred compensation
Accrued expenses
Net operating loss carryforwards
Receivable reserves
Unrealized loss on investments
Other
Total deferred tax assets
Valuation allowance
Deferred tax liabilities:
Lease right-of-use assets
Goodwill and other intangibles
Depreciation
Prepaid expenses
Other
Net deferred tax asset
Our net deferred tax asset at December 31, 2025, includes net operating loss carryforwards of $ 120.7 million that expire betwee n 2025 and 2044. Certain of our net operating loss carryforwards do not expire. A valuation allowance is recorded to the extent that it is more likely than not that any portion of the deferred tax asset will not be realized. The valuation allowance was increased by $ 2.7 million. We believe the realization of the remaining net deferred tax asset of $ 151.2 million is more likely than not based on the ability to carry back certain tax attributes against prior year taxable income for tax years before 2025 and to carry forward net operating losses indefinitely after 2025, and expectations of future taxable income, which is supported by a history of cumulative income.
The material amount of the deferred tax asset valuation allowance relates to the net operating loss carryforwards in our foreign jurisdictions, primarily in the U.K., Germany, and Canada. These foreign net operating loss carryforwards total $ 51.9 million of the deferred tax asset valuation allowance. The negative evidence considered was the three-year cumulative loss analysis at the entity and jurisdictional level. We could not identify enough positive evidence, through forecasts, the reversal of deferred tax liabilities, or tax planning strategies, to overcome the negative evidence from the three-year cumulative loss.
We have $ 3.9 million of the deferred tax asset valuation allowance related to other foreign components of the deferred tax asset, mainly deferred compensation from restricted stock units and cash debentures. The negative evidence considered here was the three-year cumulative loss analysis as well. We have an additional $ 2.7 million of state net operating loss carryforwards included in the deferred tax asset valuation allowance. The negative evidence considered was a three-year cumulative loss analysis for a separate entity filing state returns. We have approximately $ 9.2 million of net operating loss carryforwards that do not require a valuation allowance.
At December 31, 2025, the Company’s current income tax payable, included in accounts payable and accrued expenses, was a debit balance of $ 29.0 million and will be used to reduce future income tax payments. At December 31, 2024, the Company’s current income tax payable, included in accounts payable and accrued expenses, was $ 5.8 million. The current tax receivable, included in other assets, is $ 64.5 million and $ 30.1 million as of December 31, 2025 and 2024, respectively.
As of December 31, 2025, we considered all undistributed earnings of non-U.S. subsidiaries to be permanently reinvested. Therefore, we have not provided for any U.S. deferred income taxes. Because the time or manner of repatriation is uncertain, we cannot determine the impact of local taxes, withholding taxes and foreign tax credits associated with the future repatriation of such earnings, and therefore cannot quantify the tax liability that would be payable in the event all such foreign earnings are repatriated.
Uncertain Tax Positions
As of December 31, 2025 and 2024, we had $ 5.5 million and $ 5.5 million, respectively, of gross unrecognized tax benefits, all of which, if recognized, would impact the effective tax rate. We recognize interest and penalties related to uncertain tax positions in provision for income taxes in the consolidated statements of operations. As of December 31, 2025 and 2024, we had accrued interest and penalties of $ 0.4 million and $ 0.3 million, respectively, before benefit of federal tax deduction, included in accounts payable and accrued expenses in our consolidated statements of financial condition. The amount of interest and penalties recognized in our consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023, was not significant.
The following table summarizes the activity related to our company’s unrecognized tax benefits from January 1, 2023 to December 31, 2025 (in thousands) :
Year Ended December 31,
Beginning balance
Increase related to prior year tax positions
Decrease related to prior year tax positions
Increase related to current year tax positions
Decrease related to settlements with taxing authorities
Decrease related to lapsing of statute of limitations
Ending balance
We file income tax returns with the U.S. federal jurisdiction, various states, and certain foreign jurisdictions. We are not subject to U.S. federal examination for taxable years before 2022. We are not subject to certain state and local, or non-U.S. income tax examinations for taxable years before 2015.
On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law in the U.S., which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and repeal of non-U.S. corporations’ fiscal year-end. We elected to expense its domestic research and development expenditures and take 100% bonus depreciation for qualified assets for U.S. tax purposes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury.
NOTE 26 – Segm ent Reporting
We currently operate through the following three business segments: Global Wealth Management, Institutional Group, and various corporate activities combined in the Other segment. Our chief operating decision maker (“CODM”) is our Chairman and Chief Executive Officer . Our CODM regularly reviews segment net revenues, compensation and benefits expense, non-compensation operating expenses, and income before income taxes. Amounts included in non-compensation operating expenses include “Occupancy and equipment rental,” “Communications and office supplies,” “Commissions and floor brokerage,” “Provision for credit losses,” and “Other operating expenses. ”
Global Wealth Management
The Global Wealth Management segment consists of two businesses, the Private Client Group and Stifel Bancorp. The Private Client Group includes branch offices and independent contractor offices of our broker-dealer subsidiaries located throughout the United States. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, as well as offering banking products to their clients through our bank subsidiaries, which provide residential, consumer, and commercial lending, as well as FDIC-insured deposit accounts to customers of our private client group and to the general public.
The success of our Global Wealth Management segment is dependent upon the quality of our products, services, financial advisors, and support personnel, including our ability to attract, retain, and motivate a sufficient number of these associates. We face competition for qualified associates from major financial services companies, including other brokerage firms, insurance companies, banking institutions, and discount brokerage firms. Segment revenue growth and operating income are used to evaluate and measure segment performance by our CODM in assessing performance and deciding how to allocate resources.
Institutional Group
The Institutional Group segment includes institutional sales and trading. It provides securities brokerage, trading, and research services to institutions, with an emphasis on the sale of equity and fixed income products. This segment also includes the management of and participation in underwritings for both corporate and public finance (exclusive of sales credits generated through the private client group, which are included in the Global Wealth Management segment), merger and acquisition, and financial advisory services.
The success of our Institutional Group segment is dependent upon the quality of our personnel, the quality and selection of our investment products and services, pricing (such as execution pricing and fee levels), and reputation. Segment revenue growth and operating income are used to evaluate and measure segment performance by our CODM in assessing performance and deciding how to allocate resources.
Other
The Other segment includes interest income from stock borrow activities, unallocated interest expense, interest income and gains and losses from investments held, amortization of stock-based awards, and all unallocated overhead cost associated with the execution of orders; processing of securities transactions; custody of client securities; receipt, identification, and delivery of funds and securities; compliance with regulatory and legal requirements; internal financial accounting and controls; and general administration and acquisition charges.
Information on reportable segments and reconciliation to consolidated net income available to common shareholders for the years ended December 31, 2025, 2024, and 2023, is as follows (in thousands) :
Year Ended December 31,
Global Wealth Management
Net revenues
Compensation and benefits
Non-compensation operating expenses
Income before income taxes
Institutional Group
Net revenues
Compensation and benefits
Non-compensation operating expenses
Income before income taxes
Other
Net revenues
Compensation and benefits
Non-compensation operating expenses
Loss before income taxes
Consolidated
Net revenues (1)
Compensation and benefits
Non-compensation operating expenses
Income from operations before income tax expense
(1) No individual client accounted for more than 10 percent of total net revenues for the years ended December 31, 2025, 2024, and 2023.
The following table presents our company’s total assets on a segment basis at December 31, 2025 and 2024 (in thousands) :
December 31,
Global Wealth Management
Institutional Group
Other
We have operations in the United States, United Kingdom, Europe, and Canada. The Company’s foreign operations are conducted through its wholly owned subsidiaries, SNEL and SNC. Substantially all long-lived assets are located in the United States.
Net revenues, classified by the major geographic areas in which they were earned for the years ended December 31, 2025, 2024, and 2023, were as follows (in thousands) :
Year Ended December 31,
United States
United Kingdom
Canada
Other
NOTE 27 – Earnings Per Share (“EPS”)
Basic EPS is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding. Diluted EPS 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 per share include dilutive stock options and stock units under the treasury stock method.
The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2025, 2024, and 2023 (in thousands, except per share data) :
Year Ended December 31,
Net income
Preferred dividends
Net income available to common shareholders
Shares for basic and diluted calculation:
Average shares used in basic computation
Dilutive effect of stock options and units (1)
Average shares used in diluted computation
Earnings per common share:
Basic
Diluted
Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Diluted earnings per share include units.
For the years ended December 31, 2025, 2024, and 2023, the anti-dilutive effect from restricted stock units was immaterial.
Cash Dividends
During the year ended December 31, 2025, we declared and paid cash dividends of $ 1.84 per common share. During the year ended December 31, 2024, we declared and paid cash dividends of $ 1.68 per common share. During the year ended December 31, 2023, we declared and paid cash dividends of $ 1.44 per common share.
NOTE 28 – Share holders’ Equity
Share Repurchase Program
We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At December 31, 2025, the maximum number of shares that may yet be purchased under this plan was 7.6 million. The repurchase program has no expiration date. These purchases may be made on the open market or in privately negotiated transactions, depending upon market conditions and other factors. Repurchased shares may be used to meet obligations under our employee benefit plans and for general corporate purposes. During the year ended December 31, 2025, we repurchased $ 244.6 m illion or 2.5 million shares using existing Board authorizations at an average price of $ 98.28 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes. During the year ended December 31, 2024, we repurchased $ 144.0 million or 1.7 million shares using existing Board authorizations at an average price of $ 83.42 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes.
Preferred Stock
The Company has 3,000,000 authorized shares of preferred stock with a par value of $ 1.00 , redeemable at the Company’s option subject to certain terms. This stock may be issued in series, and the shares of each series will have such rights and preferences as are fixed by the Board of Directors when authorizing the issuance of that particular series.
As of December 31, 2015, the Company has three outstanding series of non-convertible, non-cumulative preferred stock: 6.25 % non-cumulative perpetual preferred stock, Series B; 6.125 % non-cumulative perpetual preferred stock, Series C; and 4.50 % non-cumulative perpetual preferred stock, Series D. The liquidation value per share is $ 25 . During the years ended December 31, 2025, 2024, and 2023, we declared and paid cash dividends of $ 37.3 million, respectively.
Treasury Stock
As of December 31, 2025 and 2024, the Company had approximately 10.0 million and 9.5 million shares held as treasury stock, respectively. During the years ended December 31, 2025 and 2024, we issued 2.0 million and 2.9 million, respectively, of common stock from treasury primarily as a result of vesting and exercise transactions under our incentive stock award plans.
NOTE 29 – Variable Interest Entities
Our variable interests in VIEs include debt and equity interests, commitments, certain fees, the establishment of Stifel Financial Capital Trusts, and our issuance of a convertible promissory note.
Our involvement with VIEs arises primarily from the following activities: purchases of securities in connection with our trading and secondary market-making activities; retained interests held as a result of securitization activities; and loans to, investments in, and fees from various investment vehicles.
Securitization Interests
During the first quarter of 2024, the Company purchased the E-Certificates of Turbine Engines Securitization Ltd. (“Turbine”). The purchase of these Turbine E-Certificates represents 100 % of the equity of Turbine. During the second quarter of 2024, the Company purchased additional membership interests in Stifel Aviation Finance II, LLC (“SAF II”). The purchase of the additional membership interests gave the Company a controlling financial interest in SAF II. The Company has determined the interest it holds in these VIEs require consolidation in its financial statements, as it is deemed to be the primary beneficiary. The assets acquired and liabilities assumed were recorded at fair value as of the respective consolidation dates. At December 31, 2025, the assets primarily consist of aircraft engines that are under operating leases, included in other assets in the accompanying consolidated statements of financial condition. See Note 9 for additional information. The liabilities primarily consist of debt, included in accounts payable and accrued expenses in the accompanying consolidated statements of financial condition.
The following tables present the aggregate assets and liabilities from those VIEs in which we hold a variable interest and have concluded that we are the primary beneficiary (in thousands) :
December 31, 2025
Aggregate Assets
Aggregate Liabilities
Securitization interests
December 31, 2024
Aggregate Assets
Aggregate Liabilities
Securitization interests
Debt and Equity Investments
The Company’s investment in and additional capital commitments to these investment vehicles are considered variable interests. The Company’s additional capital commitments are subject to call and are limited to the amount committed. These investment vehicles have net assets, primarily consisting of investments, aircraft engine-related assets, and debt. We have concluded that we are not the primary beneficiary of these VIEs, and therefore, we do not consolidate these entities. Our maximum exposure to loss is limited to the total of our carrying value.
Partnership Interests
We have formed several non-consolidated investment funds with third-party investors that are typically organized as limited liability companies (“LLCs”) or limited partnerships. These investment vehicles have assets primarily consisting of private and public equity investments. For those funds where we act as the general partner, our company’s economic interest is generally limited to management fee arrangements as stipulated by the fund operating agreements. We have generally provided the third-party investors with rights to terminate the funds or to remove us as the general partner. We have concluded that we are not the primary beneficiary of these VIEs, and therefore, we do not consolidate these entities.
The following tables present the aggregate assets, liabilities, and the maximum exposure to loss from those VIEs in which we hold a variable interest, but as to which we have concluded we are not the primary beneficiary (in thousands) :
December 31, 2025
Aggregate Assets
Aggregate Liabilities
Maximum Exposure to Loss
Debt and Equity Investments
Partnership Interests
December 31, 2024
Aggregate Assets
Aggregate Liabilities
Maximum Exposure to Loss
Debt and Equity Investments
Partnership Interests
Debenture to Stifel Financial Capital Trusts
We have completed private placements of cumulative trust preferred securities through Stifel Financial Capital Trust II, Stifel Financial Capital Trust III, and Stifel Financial Capital Trust IV (collectively, the “Trusts”). The Trusts are non-consolidated wholly owned business trust subsidiaries of our company and were established for the limited purpose of issuing trust securities to third parties and lending the proceeds to our company.
The trust preferred securities represent an indirect interest in junior subordinated debentures purchased from our company by the Trusts, and we effectively provide for the full and unconditional guarantee of the securities issued by the Trusts. We make timely payments of interest to the Trusts as required by contractual obligations, which are sufficient to cover payments due on the securities issued by the Trusts, and believe that it is unlikely that any circumstances would occur that would make it necessary for our company to make payments related to these Trusts other than those required under the terms of the debenture agreements and the trust preferred securities agreements. The Trusts were determined to be VIEs because the holders of the equity investment at risk do not have adequate decision-making ability over the Trust’s activities. Our investment in the Trusts is not a variable interest, because equity interests are variable interests only to the extent that the investment is considered to be at risk. Because our investment was funded by the Trusts, it is not considered to be at risk.
NOTE 30 – Subsequent Events
We evaluate subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Based on the evaluation, we did not identify any recognized subsequent events that would have required adjustment to the consolidated financial statements; however, we identified the following non-recognized subsequent events:
Stock Split
On January 26, 2026 , our Board declared a 50 % stock dividend, in the form of a three-for-two stock split, of our common stock payable on February 26, 2026 , to shareholders of record as of February 12, 2026 . Trading will begin on a split-adjusted basis on February 27, 2026. On January 26, 2026, the Company had approximately 103.1 million shares outstanding, or 154.7 million shares outstanding on a split-adjusted basis. The accompanying consolidated financial statements and notes to the consolidated financial statements are not adjusted for the stock split.
Amended Credit Agreement
On February 4, 2026, the Company entered into the Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with respect to its existing unsecured Credit Agreement, dated September 27, 2023, (the “Credit Agreement”), among the Company and Stifel (the “Borrowers”) and a syndicate of lenders led by Bank of America, N.A., as administrative agent. Concurrently with, and conditional upon, the effectiveness of the Amended and Restated Credit Agreement, all of the commitments under the Borrowers’ existing Credit Agreement were terminated.
The Amended and Restated Credit Agreement has a maturity date of February 4, 2031 , and provides for a committed unsecured revolving borrowing facility for maximum aggregate borrowings of up to $ 1.0 billion depending on the amount of outstanding borrowings of the Borrowers from time to time during the duration of the Amended and Restated Credit Agreement. The interest rates on borrowings under the Amended and Restated Credit Agreement are variable and are based on the Secured Overnight Financing Rate.
The Borrowers can draw upon this facility as long as certain restrictive covenants are maintained. Under the Amended and Restated Credit Agreement, the Borrowers are required to maintain compliance with a minimum consolidated tangible net worth covenant, as defined, and a maximum consolidated total capitalization ratio covenant, as defined. In addition, Stifel is required to maintain compliance with a minimum regulatory excess net capital percentage covenant, as defined, and the Company’s bank subsidiaries are required to maintain their status as well-capitalized, as defined.
