Stifel Reports Fourth Quarter And Full Year Results| MENAFN.COM

Saturday, 04 February 2023 01:27 GMT

Stifel Reports Fourth Quarter And Full Year Results


(MENAFN- GlobeNewsWire - Nasdaq)

ST. LOUIS, Jan. 25, 2023 (GLOBE NEWSWIRE) -- Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.1 billion for the three months ended December 31, 2022, compared with $1.3 billion a year ago. Net income available to common shareholders of $167.3 million, or $1.43 per diluted common share, compared with $252.1 million, or $2.12 per diluted common share for the fourth quarter of 2021. Non-GAAP net income available to common shareholders of $184.9 million, or $1.58 per diluted common share for the fourth quarter of 2022.

Net revenues of $4.4 billion for the year ended December 31, 2022 compared to $4.7 billion a year ago. Net income available to common shareholders of $624.9 million, or $5.32 per diluted common share, compared with $789.3 million, or $6.66 per diluted common share in 2021. Non-GAAP net income available to common shareholders of $675.1 million, or $5.74 per diluted common share in 2022.

Ronald J. Kruszewski , Chairman and Chief Executive Officer, said“Stifel recorded its second best annual results in 2022. Our balanced business mix, which included record results in our Global Wealth Management segment and our third best year in our Institutional Group, enabled us to deliver a return on tangible common equity of 22%. Simply stated, Stifel performed as we expected. The breadth of our franchise helped to offset much of the impact of the difficult market environment in 2022. Given our continued strong financial performance and optimistic long-term outlook, I'm pleased to announce that our board has approved a 20% increase to our common dividend. This is our fifth consecutive annual dividend increase.”

Full Year Highlights

  • The Company reported net revenues of $4.4 billion, the second highest year in its history, as our businesses navigated a challenging market environment.
  • Non-GAAP net income available to common shareholders of $5.74.
  • Record net interest income, up 79% over 2021.
  • Record asset management revenues, up 5% over 2021.
  • Recruited 152 financial advisors during the year, including 52 experienced employee advisors and 23 experienced independent advisors.
  • Bank loans up $3.8 billion, or 23%, from prior year.
  • Non-GAAP pre-tax margin of 22% as the Company maintained its focus on expense discipline, while continuing to invest in the business. In addition, the Company gained operating leverage as a result of the composition of revenues compared to the prior year.
  • Return on average tangible common equity (ROTCE) (5) of 22%.

Fourth Quarter Highlights

  • Quarterly net revenues of $1.1 billion.
  • Non-GAAP net income available to common shareholders of $1.58.
  • Recruited 36 financial advisors during the quarter, including 11 experienced employee advisors and 9 experienced independent advisors.
  • Non-GAAP pre-tax margin of 23%.
  • Annualized ROTCE (5) of 23%.
  • Tangible book value per common share (7) of $30.83, up 9% from prior year.

Other Highlights

  • Announced the Torreya Partners acquisition during the fourth quarter.
  • Board of Directors authorized a 20% increase in common stock dividend starting in the first quarter of 2023.


Financial Summary (Unaudited)
(000s) 4Q 2022 4Q 2021 FY 2022 FY 2021
GAAP Financial Highlights:
Net revenues $1,121,647 $1,304,225 $4,391,439 $4,737,088
Net income (1) $167,301 $252,070 $624,874 $789,271
Diluted EPS (1) $1.43 $2.12 $5.32 $6.66
Comp. ratio 57.8% 58.1% 58.9% 59.5%
Non-comp. ratio 21.4% 17.5% 20.9% 18.0%
Pre-tax margin 20.8% 24.4% 20.2% 22.5%
Non-GAAP Financial Highlights:
Net revenues $1,121,643 $1,304,225 $4,391,490 $4,737,241
Net income (1) (2) $184,875 $265,388 $675,071 $839,533
Diluted EPS (1) (2) $1.58 $2.23 $5.74 $7.08
Comp. ratio (2) 56.5% 57.5% 58.0% 59.0%
Non-comp. ratio (2) 20.6% 16.8% 20.3% 17.1%
Pre-tax margin (3) 22.9% 25.7% 21.7% 23.9%
ROCE (4) 16.0% 25.0% 15.0% 21.0%
ROTCE (5) 22.9% 36.6% 21.8% 30.9%
Global Wealth Management ( assets and loans in millions )
Net revenues $744,341 $674,242 $2,825,866 $2,598,837
Pre-tax net income $317,071 $232,298 $1,067,571 $914,953
Total client assets $389,818 $435,978
Fee-based client assets $144,952 $162,428
Bank loans (6) $20,622 $16,836
Institutional Group
Net revenues $353,882 $633,263 $1,536,017 $2,152,439
Equity $220,033 $442,865 $935,507 $1,453,959
Fixed Income $133,849 $190,398 $600,510 $698,480
Pre-tax net income $44,512 $175,163 $254,132 $558,937


Global Wealth Management
Fourth Quarter Results

Global Wealth Management reported record net revenues of $744.3 million for the three months ended December 31, 2022 compared with $674.2 million during the fourth quarter of 2021. Pre-tax net income was $317.1 million compared with $232.3 million in the fourth quarter of 2021.

Highlights

  • Recruited 36 financial advisors during the quarter, including 11 experienced employee advisors, and 9 experienced independent advisors, with total trailing 12 month production of $14 million.
  • Client assets of $389.8 billion, down 11% from the year-ago quarter driven by lower asset levels due to declines in the markets.
  • Bank loans of $20.6 billion, up 23% over the year-ago quarter.

Net revenues increased 10% from a year ago:

  • Transactional revenues decreased 15% from the year-ago quarter, reflecting a decrease in client activity amid uncertainty in the markets.
  • Asset management revenues decreased 9% from the year-ago quarter as a result of a decline in fee-based asset values.
  • Net interest income increased 105% over the year-ago quarter driven by higher interest rates and loan growth.

Total Expenses:

  • Compensation expense as percent of net revenues decreased to 44.1% primarily as a result of higher net interest income.
  • Provision for credit losses was primarily impacted by growth in the loan portfolio, as credit quality remained strong.
  • Non-compensation operating expenses as a percent of net revenues decreased to 13.3% primarily as a result of revenue growth and expense discipline, partially offset by the increase in the provision for credit losses over the year-ago quarter.


Summary Results of Operations
(000s) 4Q 2022 4Q 2021
Net revenues $744,341 $674,242
Transactional revenues 165,557 194,927
Asset management 289,445 318,612
Net interest income 284,998 138,891
Investment banking 4,814 11,183
Other income (473) 10,629
Total expenses $427,270 $441,944
Compensation expense 328,099 349,428
Provision for credit losses 6,028 4,062
Non-comp. opex 93,143 88,454
Pre-tax net income $317,071 $232,298
Compensation ratio 44.1% 51.8%
Non-compensation ratio 13.3% 13.7%
Pre-tax margin 42.6% 34.5%


Institutional Group
Fourth Quarter Results

Institutional Group reported net revenues of $353.9 million for the three months ended December 31, 2022 compared with $633.3 million during the fourth quarter of 2021. Pre-tax net income was $44.5 million compared with $175.2 million in the fourth quarter of 2021.

Highlights

  • Announced the Torreya Partners acquisition during the fourth quarter.

Investment banking revenues decreased 53% from a year ago:

  • Advisory revenues of $166.9 million decreased 46% from the year-ago quarter driven by lower levels of completed advisory transactions.
  • Equity capital raising revenues decreased significantly from the year-ago quarter on lower issuances in line with market volumes in an uncertain market environment.
  • Fixed income capital raising revenues decreased from the year-ago quarter as microeconomic conditions contributed to lower municipal bond and loan issuances.

Fixed income transactional revenues decreased 19% from a year ago:

  • Fixed income transactional revenues decreased from the year-ago quarter driven by lower volumes in our rates products.

Equity transactional revenues decreased 21% from a year ago:

  • Equity transactional revenues declined from the year-ago quarter driven by declines in equity markets and lower client activity compared with elevated levels in the prior year quarter.

Total Expenses:

  • Compensation expense as a percent of net revenues increased to 62.4% primarily as a result of lower net revenues.
  • Non-compensation operating expenses as a percent of net revenues increased to 25.0% as a result of lower net revenues, higher travel-related expenses due to the normalization of post-COVID travel and entertainment, and investments in technology, partially offset by lower investment banking expenses.


Summary Results of Operations
(000s) 4Q 2022 4Q 2021
Net revenues $353,882 $633,263
Investment banking 218,891 466,188
Advisory 166,935 310,718
Equity capital raising 24,127 90,595
Fixed income capital raising 27,829 64,875
Fixed income transactional 77,320 94,926
Equity transactional 51,850 65,797
Other 5,821 6,352
Total expenses $309,370 $458,100
Compensation expense 220,730 367,439
Non-comp. opex. 88,640 90,661
Pre-tax net income $44,512 $175,163
Compensation ratio 62.4% 58.0%
Non-compensation ratio 25.0% 14.3%
Pre-tax margin 12.6% 27.7%


Global Wealth Management
Full Year Results

Global Wealth Management reported record net revenues of $2.8 billion for the year ended December 31, 2022 compared with $2.6 billion in 2021. Pre-tax net income was $1.1 billion compared with $915.0 million in 2021.

Highlights

  • Recruited 152 financial advisors during the year with total trailing 12 month production of $70 million.
  • Pre-tax margin of 38%, up from 35% in 2021.

Net revenues increased 9% from prior year:

  • Transactional revenues decreased 14% from prior year reflecting a decrease in client activity, from significantly elevated levels in 2021, amid uncertainty in the markets.
  • Asset management revenues increased 5% from prior year reflecting strong fee-based asset flows.
  • Net interest income increased 72% from prior year driven by higher interest rates and loan growth.

Total Expenses:

  • Compensation expense as a percent of net revenues decreased to 48.4% primarily as a result of higher net interest income.
  • Provision for credit losses was primarily impacted by growth in the loan portfolio during the year, as credit quality remained strong. The provision for credit losses in 2021 included a release related to loans sold at a premium.
  • Non-compensation operating expenses as a percent of net revenues increased to 13.8% primarily as a result of the increase in the provision for credit losses over the prior year.


Summary Results of Operations
(000s) FY 2022 FY 2021
Net revenues $2,825,866 $2,598,837
Transactional revenues 668,912 774,965
Asset management 1,262,841 1,206,406
Net interest income 879,780 511,693
Investment banking 19,515 48,210
Other income (5,182) 57,563
Total expenses $1,758,295 $1,683,884
Compensation expense 1,368,576 1,370,308
Provision for credit losses 33,506 (11,502)
Non-comp. opex 356,213 325,078
Pre-tax net income $1,067,571 $914,953
Compensation ratio 48.4% 52.7%
Non-compensation ratio 13.8% 12.1%
Pre-tax margin 37.8% 35.2%


Institutional Group
Full Year Results

Institutional Group reported net revenues of $1.5 billion for the year ended December 31, 2022 compared with $2.2 billion in 2021. Pre-tax net income was $254.1 million compared with $558.9 million in 2021.

Highlights

Investment banking revenues decreased 37% from prior year:

  • Advisory revenues of $714.6 million decreased 17% from a record prior year driven by lower levels of completed advisory transactions.
  • Equity capital raising revenues decreased significantly from prior year on lower issuances in line with market volumes in an uncertain market environment.
  • Fixed income capital raising revenues decreased from prior year as microeconomic conditions contributed to lower municipal bond and loan issuances.

Fixed income transactional revenues increased 3% from prior year:

  • Fixed income transactional revenues increased from prior year due to revenues from the Vining Sparks acquisition, which closed in November 2021, partially offset by lower net revenues in our rates products.

Equity transactional revenues decreased 21% from prior year:

  • Equity transactional revenues declined from prior year driven by declines in equity markets and lower client activity compared with elevated levels in the prior year.

Total Expenses:

  • Compensation expense as a percent of net revenues increased to 60.5% primarily as a result of lower compensable revenues.
  • Non-compensation operating expenses as a percent of net revenues increased to 23.0% as a result of lower net revenues, higher travel-related expenses due to the normalization of post-COVID travel and entertainment, and investments in technology, partially offset by lower investment banking expenses.


Summary Results of Operations
(000s) FY 2022 FY 2021
Net revenues $1,536,017 $2,152,439
Investment banking 951,970 1,517,171
Advisory 714,623 856,083
Equity capital raising 103,437 434,238
Fixed income capital raising 133,910 226,850
Fixed income transactional 370,198 361,014
Equity transactional 200,512 254,684
Other 13,337 19,570
Total expenses $1,281,885 $1,593,502
Compensation expense 929,606 1,251,595
Non-comp. opex. 352,279 341,907
Pre-tax net income $254,132 $558,937
Compensation ratio 60.5% 58.1%
Non-compensation ratio 23.0% 15.9%
Pre-tax margin 16.5% 26.0%


Other Matters

Highlights

  • Total assets increased $3.1 billion, or 9%, over the year-ago quarter.
  • The Board of Directors approved a 20% increase in the quarterly dividend to $0.36 per common share starting in the first quarter of 2023.
  • The Company repurchased $75.2 million of its outstanding common stock during the fourth quarter. During 2022, the Company repurchased $192.4 million of its outstanding common stock.
  • Weighted average diluted shares outstanding decreased as a result of the Company's lower share price and increase in share repurchases over the comparable periods.
  • The Board of Directors declared a $0.30 quarterly dividend per share payable on December 15, 2022 to common shareholders of record on December 1, 2022.
  • The Board of Directors declared a quarterly dividend on the outstanding shares of the Company's preferred stock payable on December 15, 2022 to shareholders of record on December 1, 2022.


4Q 2022 4Q 2021 FY 2022 FY 2021
Common stock repurchases
Repurchases (000s) $75,164 $86,295 $192,391 $241,342
Number of shares (000s) 1,252 1,168 2,983 3,781
Average price $60.06 $73.86 $64.50 $63.82
Period end shares (000s) 105,348 104,499 105,348 104,499
Weighted average diluted shares outstanding (000s) 117,223 118,959 117,540 118,530
Effective tax rate 24.4 % 18.0% 25.2 % 22.7%
Stifel Financial Corp. (8)
Tier 1 common capital ratio 14.6% 15.2%
Tier 1 risk based capital ratio 17.6% 18.7%
Tier 1 leverage capital ratio 11.1% 11.7%
Tier 1 capital (MM) $4,048 $3,624
Risk weighted assets (MM) $23,027 $19,366
Average assets (MM) $36,479 $30,930
Quarter end assets (MM) $37,196 $34,050
Agency Rating Outlook
Fitch Ratings BBB+ Stable
S&P Global Ratings BBB- Positive


Conference Call Information

Stifel Financial Corp. will host its fourth quarter 2022 financial results conference call on Wednesday, January 25, 2023, at 9:30 a.m. Eastern Time. The conference call may include forward-looking statements.

All interested parties are invited to listen to Stifel's Chairman and CEO, Ronald J. Kruszewski, by dialing (888) 394-8218 and referencing conference ID 2527655. A live audio webcast of the call, as well as a presentation highlighting the Company's results, will be available through the Company's web site, . For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

Company Information

Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel's broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC. The Company's broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company's website at . For global disclosures, please visit .

A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the financial supplement. Both the earnings release and the financial supplement are available online in the Investor Relations section at .

The information provided herein and in the financial supplement, including information provided on the Company's earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial supplement, both of which are available online in the Investor Relations section at .

Cautionary Note Regarding Forward-Looking Statements

This earnings release contains certain statements that may be deemed to be“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies' operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. For information about the risks and important factors that could affect the Company's future results, financial condition and liquidity, see“Risk Factors” in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Forward-looking statements speak only as to the date they are made. The Company disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.


Summary Results of Operations (Unaudited)

Three Months Ended Year Ended
(000s, except per share amounts) 12/31/2022 12/31/2021 %
Change
9/30/2022 %
Change
12/31/2022 12/31/2021 %
Change
Revenues:
Commissions $ 168,945 $ 211,068 (20.0) $ 159,054 6.2 $ 710,589 $ 809,500 (12.2)
Principal transactions 125,781 144,584 (13.0) 118,379 6.3 529,033 581,164 (9.0)
Investment banking 223,706 477,371 (53.1) 221,858 0.8 971,485 1,565,381 (37.9)
Asset management 289,462 318,638 (9.2) 300,557 (3.7) 1,262,919 1,206,516 4.7
Other income 11,862 14,496 (18.2) 852 nm 19,685 72,125 (72.7)
Operating revenues 819,756 1,166,157 (29.7) 800,700 2.4 3,493,711 4,234,686 (17.5)
Interest revenue 416,731 145,425 186.6 304,195 37.0 1,099,115 548,400 100.4
Total revenues 1,236,487 1,311,582 (5.7) 1,104,895 11.9 4,592,826 4,783,086 (4.0)
Interest expense 114,840 7,357 nm 59,756 92.2 201,387 45,998 337.8
Net revenues 1,121,647 1,304,225 (14.0) 1,045,139 7.3 4,391,439 4,737,088 (7.3)
Non-interest expenses:
Compensation and benefits 647,962 757,948 (14.5) 611,870 5.9 2,586,232 2,820,301 (8.3)
Non-compensation operating expenses 239,988 227,615 5.4 227,500 5.5 920,091 849,706 8.3
Total non-interest expenses 887,950 985,563 (9.9) 839,370 5.8 3,506,323 3,670,007 (4.5)
Income before income taxes 233,697 318,662 (26.7) 205,769 13.6 885,116 1,067,081 (17.1)
Provision for income taxes 57,076 57,272 (0.3) 54,600 4.5 222,961 242,223 (8.0)
Net income 176,621 261,390 (32.4) 151,169 16.8 662,155 824,858 (19.7)
Preferred dividends 9,320 9,320 0.0 9,320 0.0 37,281 35,587 4.8
Net income available to common shareholders $ 167,301 $ 252,070 (33.6) $ 141,849 17.9 $ 624,874 $ 789,271 (20.8)
Earnings per common share:
Basic $ 1.54 $ 2.35 (34.5) $ 1.30 18.5 $ 5.74 $ 7.34 (21.8)
Diluted $ 1.43 $ 2.12 (32.5) $ 1.21 18.2 $ 5.32 $ 6.66 (20.1)
Cash dividends declared per common share $ 0.30 $ 0.15 100.0 $ 0.30 0.0 $ 1.20 $ 0.60 100.0
Weighted average number of common shares outstanding:
Basic 108,344 107,185 1.1 108,767 (0.4) 108,848 107,536 1.2
Diluted 117,223 118,959 (1.5) 117,218 0.0 117,540 118,530 (0.8)


Non-GAAP Financial Measures (9)

Three Months Ended Year Ended
(000s, except per share amounts) 12/31/2022 12/31/2021 12/31/2022 12/31/2021
GAAP net income $ 176,621 $261,390 $ 662,155 $824,858
Preferred dividend 9,320 9,320 37,281 35,587
Net income available to common shareholders 167,301 252,070 624,874 789,271
Non-GAAP adjustments:
Merger-related (10) 23,497 16,234 67,099 65,314
Provision for income taxes (11) (5,923 ) (2,916) (16,902 ) (15,052)
Total non-GAAP adjustments 17,574 13,318 50,197 50,262
Non-GAAP net income available to common shareholders $ 184,875 $265,388 $ 675,071 $839,533
Weighted average diluted shares outstanding 117,223 118,959 117,540 118,530
GAAP earnings per diluted common share $ 1.51 $2.20 $ 5.63 $6.96
Non-GAAP adjustments 0.15 0.11 0.43 0.42
Non-GAAP earnings per diluted common share $ 1.66 $2.31 $ 6.06 $7.38
GAAP earnings per diluted common share available to common shareholders $ 1.43 $2.12 $ 5.32 $6.66
Non-GAAP adjustments 0.15 0.11 0.42 0.42
Non-GAAP earnings per diluted common share available to common shareholders $ 1.58 $2.23 $ 5.74 $7.08


GAAP to Non-GAAP Reconciliation (9)

Three Months Ended Year Ended
(000s) 12/31/2022 12/31/2021 12/31/2022 12/31/2021
GAAP compensation and benefits $647,962 $757,948 $2,586,232 $2,820,301
As a percentage of net revenues 57.8% 58.1% 58.9% 59.5%
Non-GAAP adjustments:
Merger-related (10) (14,570) (8,019) (39,114) (26,092)
Non-GAAP compensation and benefits $633,392 $749,929 $2,547,118 $2,794,209
As a percentage of non-GAAP net revenues 56.5% 57.5% 58.0% 59.0%
GAAP non-compensation expenses $239,988 $227,615 $920,091 $849,706
As a percentage of net revenues 21.4% 17.5% 20.9% 18.0%
Non-GAAP adjustments:
Merger-related (10) (8,931) (8,215) (27,934) (39,069)
Non-GAAP non-compensation expenses $231,057 $219,400 $892,157 $810,637
As a percentage of non-GAAP net revenues 20.6% 16.8% 20.3% 17.1%
Total merger-related expenses $ 23,497 $ 16,234 $ 67,099 $ 65,314


Footnotes

(1) Represents available to common shareholders.
(2) Reconciliations of the Company's GAAP results to these non-GAAP measures are discussed within and under“Non-GAAP Financial Measures” and“GAAP to Non-GAAP Reconciliation.”
(3) Non-GAAP pre-tax margin is calculated by adding total merger-related expenses (non-GAAP adjustments) and dividing it by non-GAAP net revenues. See“Non-GAAP Financial Measures” and“GAAP to Non-GAAP Reconciliation.”
(4) Return on average common equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders' equity or, in the case of non-GAAP ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders' equity.
(5) Return on average tangible common equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders' equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also a non-GAAP financial measure, equals total common shareholders' equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $60.4 million and $56.3 million as of December 31, 2022 and 2021, respectively.
(6) Includes loans held for sale.
(7) Tangible book value per common share represents shareholders' equity (excluding preferred stock) divided by period end common shares outstanding. Tangible common shareholders' equity equals total common shareholders' equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets.
(8) Capital ratios are estimates as time of the Company's earnings release, January 25, 2023.
(9) The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain“non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a“non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company's financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure.
(10) Primarily related to charges 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 on-going business.
(11) Primarily represents the Company's effective tax rate for the period applied to the non-GAAP adjustments.

Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271- 3610 |




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