Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“the Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
($ in thousands)	(Unaudited)				(Unaudited)
Assets
Cash and cash equivalents	$	1,716,570	$	1,142,596	$	1,425,511	$	2,279,274
Cash segregated for regulatory purposes		154,374		131,374		95,074		172,932
Receivables:
Brokerage clients, net		1,054,659		1,351,786		1,202,601		936,500
Brokers, dealers, and clearing organizations		444,685		627,790		562,432		549,492
Securities purchased under agreements to resell		436,860		385,008		470,025		217,930
Financial instruments owned, at fair value		819,715		972,932		981,282		694,028
Available-for-sale securities, at fair value		2,824,258		3,254,737		2,190,128		2,230,297
Held-to-maturity securities, at amortized cost		3,397,713		2,856,219		4,761,401		4,117,384
Loans:
Held for investment, net		10,650,760		9,624,042		12,091,713		11,006,760
Held for sale, at lower of cost or market		281,475		389,693		330,521		551,248
Investments, at fair value		108,412		79,972		119,545		113,862
Fixed assets, net		936,911		1,107,928		165,707		167,915
Operating lease right-of-use assets, net						774,837		793,181
Goodwill		1,181,998		1,194,074		1,182,313		1,181,998
Intangible assets, net		145,472		161,773		136,776		140,984
Loans and advances to financial advisors and other employees, net		582,105		525,332		600,622		596,993
Deferred tax assets, net		107,775		104,380		95,015		136,477
Other assets		705,440		700,589		956,078		716,999
Total assets	$	25,549,182	$	24,610,225	$	28,141,581	$	26,604,254

	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
($ in thousands, except share and per share amounts)	(Unaudited)						(Unaudited)
Liabilities
Payables:
Brokerage clients	$	1,027,828		$	740,444		$	885,659		$	1,063,937
Brokers, dealers, and clearing organizations		157,353			712,291			308,937			177,937
Drafts		90,698			119,758			78,146			117,737
Securities sold under agreements to repurchase		182,271			391,634			208,228			190,955
Bank deposits		16,400,001			15,332,581			18,715,133			17,396,497
Financial instruments sold, but not yet purchased, at fair value		599,934			662,852			644,762			437,978
Accrued compensation		476,836			507,009			399,049			638,298
Accounts payable and accrued expenses		1,111,569			1,146,856			1,410,123			1,169,740
Federal Home Loan Bank advances		—			250,000
Senior notes		1,412,005			1,017,010			1,112,672			1,112,409
Debentures to Stifel Financial Capital Trusts		60,000			60,000			60,000			60,000
Total liabilities		21,518,495			20,940,435			23,822,709			22,365,488

Equity
Stifel Financial Corp. shareholders' equity:
Preferred stock - $1 par value; authorized 3,000,000 shares; issued 21,400 and 12,400 shares, respectively		535,000			310,000
Common stock - $0.15 par value; authorized 194,000,000 shares; issued 74,441,197 and 74,441,113 shares, respectively		11,166			11,166
Preferred stock - $1 par value; authorized 3,000,000 shares; issued 21,400 shares								535,000			535,000
Common stock - $0.15 par value; authorized 194,000,000 shares; issued 111,661,660 and 111,661,621 shares, respectively								16,749			16,749
Additional paid-in-capital		1,878,042			1,909,286			1,814,616			1,888,982
Retained earnings		1,913,682			1,715,704			2,202,701			2,078,135
Accumulated other comprehensive income/(loss)		8,079			(11,705	)
Treasury stock, at cost, 5,830,670 and 6,113,084 shares, respectively		(315,282	)		(319,660	)
Total Stifel Financial Corp. shareholders’ equity		4,030,687			3,614,791
Non-controlling interests		—			54,999
Accumulated other comprehensive income								7,305			27,639
Treasury stock, at cost, 6,446,242 and 8,512,584 shares, respectively								(257,499	)		(307,739	)
Total equity		4,030,687			3,669,790			4,318,872			4,238,766
Total liabilities and equity	$	25,549,182		$	24,610,225		$	28,141,581		$	26,604,254

	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
($ in thousands, except per share amounts)	2020			2019		2020		2019		2021			2020
Revenues:
Commissions	$	172,654		$	163,920	$	560,780	$	484,350	$	213,614		$	211,098
Principal transactions		140,883			97,847		445,566		298,343		165,006			138,666
Investment banking		218,134			198,790		614,637		540,247		339,288			179,468
Asset management and service fees		230,782			217,628		667,496		624,066		278,147			237,775
Interest		114,411			178,784		403,956		557,795		127,540			161,177
Other income		20,258			8,747		50,979		34,461		25,634			9,207
Total revenues		897,122			865,716		2,743,414		2,539,262		1,149,229			937,391
Interest expense		13,822			44,144		51,263		146,483		14,440			24,357
Net revenues		883,300			821,572		2,692,151		2,392,779		1,134,789			913,034
Non-interest expenses:
Compensation and benefits		533,638			486,160		1,657,991		1,411,135		697,914			577,179
Occupancy and equipment rental		68,598			58,649		200,935		178,566		72,032			66,073
Communications and office supplies		40,123			36,817		124,293		107,583		41,825			41,124
Commissions and floor brokerage		13,254			10,542		43,273		32,506		15,703			14,842
Provision for credit losses		(1,353	)		929		33,925		5,565		(5,252	)		16,068
Other operating expenses		70,647			77,721		215,275		220,879		84,675			82,642
Total non-interest expenses		724,907			670,818		2,275,692		1,956,234		906,897			797,928
Income from operations before income tax expense		158,393			150,754		416,459		436,545		227,892			115,106
Provision for income taxes		37,866			40,632		101,456		117,227		54,877			28,517
Net income		120,527			110,122		315,003		319,318		173,015			86,589
Net income applicable to non-controlling interests		—			708		—		1,612
Net income applicable to Stifel Financial Corp.		120,527			109,414		315,003		317,706
Preferred dividends		9,897			4,844		19,584		12,476		8,289			4,844
Net income available to common shareholders	$	110,630		$	104,570	$	295,419	$	305,230	$	164,726		$	81,745

Earnings per common share:
Basic	$	1.57		$	1.47	$	4.17	$	4.21	$	1.53		$	0.76
Diluted	$	1.46		$	1.34	$	3.90	$	3.87	$	1.40		$	0.71

Cash dividends declared per common share	$	0.17		$	0.15	$	0.51	$	0.45	$	0.15		$	0.11

Weighted-average number of common shares outstanding:
Basic		70,627			71,197		70,814		72,512		107,746			106,929
Diluted		75,850			78,144		75,712		78,826		117,875			114,929

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
($ in thousands)	2020			2019			2020			2019			2021			2020
Net income	$	120,527		$	110,122		$	315,003		$	319,318		$	173,015		$	86,589
Other comprehensive income, net of tax: ⁽¹⁾
Changes in unrealized gains on available-for-sale securities ^{(2) (3)}		19,123			16,344			22,467			58,428
Other comprehensive income/(loss), net of tax: ⁽¹⁾
Changes in unrealized losses on available-for-sale securities ⁽²⁾														(22,670	)		(73,227	)
Changes in unrealized losses on cash flow hedging instruments⁽⁴⁾⁽³⁾		(2,968	)		(477	)		(651	)		(4,260	)		—			(1,706	)
Foreign currency translation adjustment		7,946			(4,106	)		(2,032	)		(5,239	)		2,336			(9,822	)
Total other comprehensive income, net of tax		24,101			11,761			19,784			48,929
Total other comprehensive loss, net of tax														(20,334	)		(84,755	)
Comprehensive income		144,628			121,883			334,787			368,247		$	152,681		$	1,834
Net income attributable to non-controlling interest		—			708			—			1,612
Comprehensive income applicable to Stifel Financial Corp.	$	144,628		$	121,175		$	334,787		$	366,635

	Three Months Ended September 30,						Three Months Ended March 31,
($ in thousands, except per share amounts)	2020			2019			2021			2020
Preferred stock, par value $1.00 per share:
Balance, beginning of period	$	535,000		$	310,000		$	535,000		$	310,000
Issuance of preferred stock		—			—			—			—
Balance, end of period		535,000			310,000			535,000			310,000
Common stock, par value $0.15 per share:
Balance, beginning of period		11,166			11,166			16,749			16,749
Issuance of common stock		—			—			—			—
Balance, end of period		11,166			11,166			16,749			16,749
Additional paid-in-capital:
Balance, beginning of period		1,853,191			1,867,209			1,888,982			1,903,703
Unit amortization, net of forfeitures		28,101			26,300			34,811			33,799
Distributions under employee plans		(3,403	)		(3,708	)		(109,224	)		(105,570	)
Issuance of preferred stock		15			—
Dividends declared to equity-award holders								—			350
Other		138			14			47			85
Balance, end of period		1,878,042			1,889,815			1,814,616			1,832,367
Retained earnings:
Balance, beginning of period		1,818,335			1,512,702			2,078,135			1,715,704
Net income		120,527			110,122			173,015			86,589
Dividends declared:
Common		(14,042	)		(12,572	)		(18,470	)		(14,916	)
Preferred		(9,897	)		(4,844	)		(8,289	)		(4,844	)
Distributions under employee plans		(302	)		(478	)		(21,587	)		(46,717	)
Cumulative adjustments for accounting changes ⁽¹⁾		—			(395	)		—			(7,772	)
Other		(939	)		(709	)		(103	)		867
Balance, end of period		1,913,682			1,603,826			2,202,701			1,728,911
Accumulated other comprehensive income/(loss):
Balance, beginning of period		(16,022	)		(35,355	)		27,639			(11,705	)
Unrealized gains on securities, net of tax		19,123			16,344
Unrealized losses on securities, net of tax								(22,670	)		(73,227	)
Unrealized losses on cash flow hedging activities, net of tax		(2,968	)		(477	)		—			(1,706	)
Foreign currency translation adjustment, net of tax		7,946			(4,106	)		2,336			(9,822	)
Balance, end of period		8,079			(23,594	)		7,305			(96,460	)
Treasury stock, at cost:
Balance, beginning of period		(317,610	)		(236,596	)		(307,739	)		(319,660	)
Common stock issued under employee plans		2,328			2,566
Distributions under employee plans								62,278			54,579
Common stock repurchased		—			(55,468	)		(12,038	)		(56,160	)
Balance, end of period		(315,282	)		(289,498	)		(257,499	)		(321,241	)
Total Stifel Financial Corp. Shareholders' Equity		4,030,687			3,501,715			4,318,872			3,470,326
Non-controlling interests:
Balance, beginning of period		—			56,296			—			54,999
Net income applicable to non-controlling interests		—			708
Distributions to non-controlling interest holders		—			(971	)
Deconsolidation of non-controlling interest								—			(54,999	)
Balance, end of period		—			56,033			—			—
Total Shareholders' Equity	$	4,030,687		$	3,557,748		$	4,318,872		$	3,470,326

⁽¹⁾ ~~Cumulative adjustments for accounting changes relate~~See accompanying Notes to ~~the adoption~~Consolidated Financial Statements.

Consolidated Statements of ~~certain accounting updates during 2020 and 2019. See Note 2 to the consolidated financial statements for further information.~~Cash Flows

Nine Months Ended September 30,

($ in thousands, except per share amounts)

2020

2019

Preferred stock, par value $1.00 per share:

Balance, beginning of period

$
310,000

$
150,000

Issuance of preferred stock

225,000

160,000

Balance, end of period

535,000

310,000

Common stock, par value $0.15 per share:

Balance, beginning of period

11,166

11,166

Issuance of common stock

—

—

Balance, end of period

11,166

11,166

Additional paid-in-capital:

Balance, beginning of period

1,909,286

1,893,304

Unit amortization, net of forfeitures

88,717

86,388

Distributions under employee plans

(113,389
)

(84,902
)
Issuance of preferred stock

(7,005
)

(5,012
)
Dividends declared to equity-award holders

350

—

Other

83

37

Balance, end of period

1,878,042

1,889,815

Retained earnings:

Balance, beginning of period

1,715,704

1,366,503

Net income

315,003

319,318

Dividends declared:

Common

(42,980
)

(38,249
)
Preferred

(19,584
)

(12,476
)
Distributions under employee plans

(47,813
)

(18,770
)
Cumulative adjustments for accounting changes ⁽¹⁾

(7,772
)

(11,204
)
Other

1,124

(1,296
)
Balance, end of period

1,913,682

1,603,826

Accumulated other comprehensive income/(loss):

Balance, beginning of period

(11,705
)

(72,523
)
Unrealized gains on securities, net of tax

22,467

58,428

Unrealized losses on cash flow hedging activities, net of tax

(651
)

(4,260
)
Foreign currency translation adjustment, net of tax

(2,032
)

(5,239
)
Balance, end of period

8,079

(23,594
)
Treasury stock, at cost:

Balance, beginning of period

(319,660
)

(180,857
)
Common stock issued under employee plans

60,895

71,793

Common stock repurchased

(56,517
)

(180,434
)
Balance, end of period

(315,282
)

(289,498
)
Total Stifel Financial Corp. Shareholders' Equity

4,030,687

3,501,715

Non-controlling interests:

Balance, beginning of period

54,999

30,000

Net income applicable to non-controlling interests

—

1,612

Capital contributions from non-controlling interest holders

—

26,800

Distributions to non-controlling interest holders

—

(2,379
)
Deconsolidation of non-controlling interest

(54,999
)

—

Balance, end of period

—

56,033

Total Shareholders' Equity

$
4,030,687

$
3,557,748

The following presents cash, cash equivalents, and cash restricted for regulatory purposes for the periods presented ($ in thousands):
	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	1,425,511	$	2,279,274
Cash segregated for regulatory purposes		95,074		172,932
Total cash, cash equivalents, and cash segregated for regulatory purposes	$	1,520,585	$	2,452,206

Nine Months Ended September 30,

($ in thousands)

2020

2019

Cash Flows From Investing Activities:

Proceeds from:

Principal paydowns, sales, calls, and maturities of available-for-sale securities

$
781,922

$
1,034,741

Calls and principal paydowns of held-to-maturity securities

155,784

456,804

Sale of other real estate owned

—

7,300

Sale or maturity of investments

2,252

4,263

Disposition of business

37,000

—

Increase in loans held for investment, net

(1,075,568
)

(592,547
)
Payments for:

Purchase of fixed assets

(70,532
)

(116,307
)
Purchase of available-for-sale securities

(628,660
)

(239,155
)
Purchase of held-to-maturity securities

(384,700
)

(243,335
)
Purchase of investments

(21,317
)

(9,100
)
Acquisitions, net of cash received

(280
)

(136,196
)
Net cash (used in)/provided by investing activities

(1,204,099
)

166,468

Cash Flows From Financing Activities:

Repayments of borrowings, net

—

(62,810
)
Repayments of Federal Home Loan Bank advances, net

(250,000
)

(290,000
)
Payment of contingent consideration

(22,285
)

(6,925
)
(Decrease)/increase in securities sold under agreements to repurchase

(209,363
)

5,189

Increase/(decrease) in bank deposits, net

1,067,420

(1,026,967
)
(Decrease)/increase in securities loaned

(520,982
)

124,707

Tax payments related to shares withheld for stock-based compensation plans

(70,754
)

(30,425
)
Proceeds from preferred stock issuance, net

217,995

154,988

Proceeds from issuance of senior notes, net

393,940

—

Proceeds from non-controlling interests

—

26,800

Repurchase of common stock

(56,517
)

(180,434
)
Cash dividends on preferred stock

(18,972
)

(12,476
)
Cash dividends paid to common stock and equity-award holders

(34,800
)

(31,697
)
Cash paid to employees upon settlement of equity awards

(27,101
)

—

Other

—

(2,379
)
Net cash provided by/(used in) financing activities

468,581

(1,332,429
)
Effect of exchange rate changes on cash

(2,032
)

(5,198
)
Increase/(decrease) in cash, cash equivalents, and cash segregated for regulatory purposes

596,974

(1,137,854
)
Cash, cash equivalents, and cash segregated for regulatory purposes at beginning of period

1,273,970

2,069,374

Cash, cash equivalents, and cash segregated for regulatory purposes at end of period

$
1,870,944

$
931,520

Supplemental disclosure of cash flow information:

Cash paid for income taxes, net of refunds

$
112,190

$
110,907

Cash paid for interest

66,974

149,984

Noncash financing activities:

Unit grants, net of forfeitures

117,801

128,539

NOTE 1 – Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies

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, with a growing presence in the United Kingdom, Europe, and Canada. Our company’s principal customers are individual investors, corporations, municipalities, and institutions.

The consolidated financial statements include Stifel Financial Corp. and its wholly owned subsidiaries, principally Stifel, Nicolaus & Company, Incorporated (“Stifel”), Keefe, Bruyette & Woods, Inc., 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.

We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise noted) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 on file with the SEC.

On ~~March 27,~~November 11, 2020, our Board approved a 50% stock dividend, in the ~~Company completed~~form of a three-for-two stock split, of our common stock payable on December 16, 2020, to shareholders of record as of December 2, 2020. All share and per share information has been retroactively adjusted to reflect the sale of Ziegler Capital Management, LLC (“ZCM”), a wholly owned asset management subsidiary. The assets and liabilities of ZCM were classified as held for sale and are included in other assets and accounts payable and accrued expenses, respectively, at December 31, 2019. See Note 8 for further information.stock split.

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.

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. For consolidated subsidiaries that are less than wholly owned, the third-party holdings of equity interests are referred to as non-controlling interests. The portion of shareholders’ equity that is attributable to non-controlling interests for such subsidiaries is presented as non-controlling interests, a component of total equity, in the consolidated statements of financial condition.

Our non-controlling interest at December 31, 2019 represented a 27.5% third-party ownership of North Shore Aviation Holdings LLC (“North Shore”), which was a consolidated subsidiary of the Company that, through its subsidiary, owns airplane engines.

On February 7, 2020, North Shore entered into a Credit Agreement with North Shore Aviation Trust Series 2020-1 (the “Trust”) whereby the Trust provided North Shore with a $120.0 million credit facility. North Shore was recapitalized with funding from the issuance of the senior notes and E-Certificates by the Trust. Upon the recapitalization, Stifel Bancorp’s equity in North Shore was redeemed. We deconsolidated the related assets, liabilities, and non-controlling interests of North Shore.

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, which complies with the provisions of ASC 810 as amended by ASU 2015-02, 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.

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 24 for additional information on VIEs.

For a detailed discussion about the Company’s significant accounting policies, see Note 2, Summary of Significant Accounting Policies, in our consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019.

During the nine months ended September 30, 2020, other than the following, there were no significant changes made to the Company’s significant accounting policies. The accounting policy changes are attributable to the adoption of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments − Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”)” on January 1, 2020. This accounting update impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (CECL) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. CECL replaces the loss model currently applicable to bank loans, held-to-maturity securities, and other receivables carried at amortized cost. These credit loss policy updates are applied prospectively in our consolidated financial statements from January 1, 2020.

~~Reported financial information for the historical comparable period was not revised and continues to be reported under the accounting standards in effect during the historical periods.~~

The allowance for credit losses includes both the allowance for loan losses and the reserve for unfunded lending commitments and represents management’s estimate of the expected credit losses in our company’s loan portfolio. The expected credit losses on our loan portfolio are referred to as the allowance for loan 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 loan losses related to the loan portfolio in the consolidated statement of operations and the provision for unfunded lending commitments are reported in the consolidated statement of operations in provision for credit losses.

For loans, the expected credit loss is typically estimated using quantitative methods that consider a variety of factors such as historical loss experience derived from proxy data, the current credit quality of the portfolio as well as an economic outlook over the life of the loan. The life of the loan for closed-ended products is based on the contractual maturity of the loan adjusted for any expected prepayments. The contractual maturity includes any extension options that are at the sole discretion of the borrower. For open-ended products, the expected credit loss is determined based on the maximum repayment term associated with future draws from credit lines.

In our loss forecasting framework, we incorporate forward-looking information through the use of macroeconomic scenarios applied over the forecasted life of the assets. 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. As any one economic 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, views of internal as well as third-party economists and industry trends. The reserve for unfunded lending commitments is estimated using the same scenarios, models, and economic data as the loan portfolio.

Also included in the allowance for loan losses are qualitative reserves to cover losses that are expected but, in our company’s assessment, may not be adequately represented in the quantitative methods or the economic 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 scenario forecasts or changes in the economic environment affecting specific portfolio segments that deviate from the macroeconomic forecasts.

Once a loan is determined to be impaired, 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 discontinued (“non-accrual status”), and any accrued and unpaid interest income is reversed. Loans placed on non-accrual status are returned to accrual status when all delinquent principal and interest payments are collected and the collectability of future principal and interest payments is reasonably assured. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is certain. Subsequent recoveries, if any, are credited to the allowance for loan loss.

We do not include reserves for interest receivable in the measurement of the allowance for credit losses as we generally classify loans as nonperforming at 90 days past due and reverse interest income for these loans at that time.

Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, we do not separately identify individual consumer and residential loans for impairment measurements. Impairment is measured on a loan-by-loan basis for non-homogeneous loans, and a specific allowance is established for individual loans determined to be impaired. Impairment is measured by comparing the carrying value of the impaired loan to the present value of its expected cash flow discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. See Note 7 for more information.

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 6 for more information.

On January 1, 2020, we adopted ASU 2017-04, which simplifies the subsequent measurement of goodwill and eliminates Step 2 from the goodwill impairment test. Under the accounting update, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and an impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The adoption of the accounting update did not have a material impact on our consolidated financial statements. The future impact of the accounting update will depend upon the performance of our reporting units and the market conditions impacting the fair value of each reporting unit going forward.

On January 1, 2020, we adopted ASU 2016-13 that requires the measurement of the allowance for credit losses to be based on management’s best estimate of lifetime expected credit losses inherent in the Company’s relevant financial assets. Upon adoption of the standard on January 1, 2020, we recorded a $10.4 million increase to the allowance for credit losses. The increase in the allowance is driven by the fact that the allowance under the CECL model covers expected credit losses over the full expected life of the loan portfolios and also takes into account forecasts of expected future economic conditions. The cumulative effect of adopting this standard was a decrease to retained earnings of $7.8 million (net of tax).

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The accounting standard related to contracts or hedging relationships that reference LIBOR or other reference rates that are expected to be discontinued due to reference rate reform. The accounting standard provides for optional expedients and other guidance regarding the accounting related to modifications of contracts, hedging relationships and other transactions affected by reference rate reform. We have elected to retrospectively adopt the new standard as of January 1, 2020 which resulted in no immediate impact. While reference rate reform is not expected to have a material accounting impact on our consolidated financial statements, the new standard will ease the administrative burden in accounting for the future effects of reference rate reform.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. This accounting update removes certain

exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ~~The accounting update is effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021, for our company), and early adoption is permitted.~~ We ~~are currently evaluating the impact that~~prospectively adopted the accounting update ~~will~~on January 1, 2021. The adoption did not have a material impact on our consolidated financial statements.

NOTE 3 – Receivables From and Payables to Brokers, Dealers, and Clearing Organizations

Amounts receivable from brokers, dealers, and clearing organizations at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, included (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Deposits paid for securities borrowed					$	285,662	$	313,131
Receivables from clearing organizations	$	208,361	$	471,122		242,807		229,070
Deposits paid for securities borrowed		178,517		135,373
Securities failed to deliver		57,807		21,295		33,963		7,291
	$	444,685	$	627,790	$	562,432	$	549,492

Amounts payable to brokers, dealers, and clearing organizations at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, included (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Deposits received from securities loaned	$	87,352	$	608,333	$	231,700	$	145,124
Payable to clearing organizations						42,245		25,540
Securities failed to receive		52,322		25,256		34,992		7,273
Payable to clearing organizations		17,679		78,702
	$	157,353	$	712,291	$	308,937	$	177,937

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.

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.

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, such as equity securities listed in active markets, corporate fixed income securities, and U.S. government securities.

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, mortgage-backed securities, corporate fixed income and equity securities infrequently traded, state and municipal securities, sovereign debt, and asset-backed securities, which primarily include collateralized loan obligations.

We have identified Level 3 financial instruments to include certain asset-backed securities and loans 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 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.

ARS are primarily valued based upon our expectations of issuer redemptions and using internal discounted cash flow models that utilize unobservable inputs. ARS are primarily 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, mutual funds, private equity funds, and money market 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 as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

	September 30, 2020				December 31, 2019				March 31, 2021				December 31, 2020
	Fair value of investments		Unfunded commitments		Fair value of investments		Unfunded commitments		Fair value of investments		Unfunded commitments		Fair value of investments		Unfunded commitments
Money market funds	$	106,207	$	—	$	25,734	$	—	$	22,590	$	—	$	34,192	$	—
Mutual funds		6,152		—		7,875		—		6,422		—		7,152		—
Partnership interests										4,129		2,139		3,744		2,520
Private equity funds		1,538		1,203		2,288		1,203		2,002		1,203		1,489		1,203
Partnership interests		3,221		895		3,058		953
Total	$	117,118	$	2,098	$	38,955	$	2,156	$	35,143	$	3,342	$	46,577	$	3,723

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, equity and fixed income 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 ~~U.S. government agency securities,~~ agency mortgage-backed securities not actively traded, corporate fixed income, sovereign debt securities, and state and municipal securities.

Derivatives are valued using quoted market prices for identical instruments when available or pricing models based on the net present value of estimated future cash flows. The valuation models used require market observable inputs, including contractual terms, market prices, yield curves, credit curves, and measures of volatility. We manage credit risk for our derivative positions on a counterparty-by-counterparty basis and calculate credit valuation adjustments, included in the fair value of these instruments, on the basis of our relationships at the counterparty portfolio/master netting agreement level. These credit valuation adjustments are determined by applying a credit spread for the counterparty to the total expected exposure of the derivative after considering collateral and other master netting arrangements. We have classified our interest rate swaps as Level 2.

Assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2020,~~March 31, 2021, are presented below (in thousands):

	September 30, 2020								March 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial instruments owned:
U.S. government securities	$	42,444	$	42,444	$	—	$	—	$	61,918	$	61,918	$	—	$	—
U.S. government agency securities		117,805		—		117,805		—		166,501		—		166,501		—
Mortgage-backed securities:
Agency		215,333		—		215,333		—
Non-agency		1,197		—		1,197		—
Asset-backed securities		44		—		35		9
Agency mortgage-backed securities										254,203		—		254,203		—
Corporate securities:
Fixed income securities		219,734		1,167		218,567		—		223,545		220		223,325		—
Equity securities		71,387		67,093		4,294		—		82,402		71,714		10,688		—
Sovereign debt		3,069		—		3,069		—
State and municipal securities		143,201		—		143,201		—		162,083		—		162,083		—
Loans		5,501		—		—		5,501
Other ⁽¹⁾										30,630		—		16,353		14,277
Total financial instruments owned		819,715		110,704		703,501		5,510		981,282		133,852		833,153		14,277
Available-for-sale securities:
U.S. government agency securities		4,630		—		4,630		—		3,645		—		3,645		—
State and municipal securities		2,459		—		2,459		—		2,428		—		2,428		—
Mortgage-backed securities:
Agency		682,174		—		682,174		—		1,003,691		—		1,003,691		—
Commercial		97,821		—		97,821	��	—		87,439		—		87,439		—
Non-agency		6,779		—		6,779		—		3,658		—		3,658		—
Corporate fixed income securities		605,555		—		605,555		—		711,559		—		711,559		—
Asset-backed securities		1,424,840		—		1,424,840		—		377,708		—		377,708		—
Total available-for-sale securities		2,824,258		—		2,824,258		—		2,190,128		—		2,190,128		—
Investments:
Corporate equity securities		24,925		23,865		—		1,060		35,518		33,517		1		2,000
Auction rate securities:
Equity securities		12,615		—		—		12,615
Municipal securities		183		—		—		183
Auction rate securities										12,959		—		—		12,959
Other		59,778		9,749		15,028		35,001		58,515		10,349		6,338		41,828
Investments in funds and partnerships measured at NAV		10,911								12,553
Total investments		108,412		33,614		15,028		48,859		119,545		43,866		6,339		56,787
Cash equivalents measured at NAV		106,207								22,590
	$	3,858,592	$	144,318	$	3,542,787	$	54,369	$	3,313,545	$	177,718	$	3,029,620	$	71,064

Assets and liabilities measured at fair value on a recurring basis as of December 31, ~~2019,~~2020, are presented below (in thousands):

	December 31, 2019								December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial instruments owned:
U.S. government securities	$	9,266	$	9,266	$	—	$	—	$	46,900	$	46,900	$	—	$	—
U.S. government agency securities		66,881		—		66,881		—		56,450		—		56,450		—
Mortgage-backed securities:
Agency		388,856		—		388,856		—
Non-agency		5,155		—		5,155		—
Asset-backed securities		28,385		—		28,210		175
Agency mortgage-backed securities										216,434		—		216,434		—
Corporate securities:
Fixed income securities		250,783		872		249,911		—		194,575		4,474		190,101		—
Equity securities		64,009		61,579		2,430		—		67,593		62,979		4,614		—
Sovereign debt		12,403		—		12,403		—
State and municipal securities		137,211		—		137,211		—		96,150		—		96,150		—
Loans		9,983		—		832		9,151
Other ⁽¹⁾										15,926		—		4,642		11,284
Total financial instruments owned		972,932		71,717		891,889		9,326		694,028		114,353		568,391		11,284
Available-for-sale securities:
U.S. government agency securities		5,067		—		5,067		—		4,361		—		4,361		—
State and municipal securities		24,297		—		24,297		—		2,453		—		2,453		—
Mortgage-backed securities:
Agency		837,878		—		837,878		—		793,410		—		793,410		—
Commercial		109,537		—		109,537		—		95,613		—		95,613		—
Non-agency		9,758		—		9,758		—		4,569		—		4,569		—
Corporate fixed income securities		675,311		—		675,311		—		631,758		—		631,758		—
Asset-backed securities		1,592,889		—		1,592,889		—		698,133		—		698,133		—
Total available-for-sale securities		3,254,737		—		3,254,737		—		2,230,297		—		2,230,297		—
Investments:
Corporate equity securities		35,083		34,023		—		1,060		29,496		29,496		—		—
Auction rate securities:
Equity securities		14,243		—		—		14,243
Municipal securities		654		—		470		184
Auction rate securities										12,933		—		—		12,933
Other		16,771		9,905		6,013		853		59,048		10,342		6,593		42,113
Investments in funds and partnerships measured at NAV		13,221								12,385
Total investments		79,972		43,928		6,483		16,340		113,862		39,838		6,593		55,046
Cash equivalents measured at NAV		25,734								34,192
Derivative contracts ⁽¹⁾		1,086		—		1,086		—
	$	4,334,461	$	115,645	$	4,154,195	$	25,666	$	3,072,379	$	154,191	$	2,805,281	$	66,330

	December 31, 2019								December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Liabilities:
Financial instruments sold, but not yet purchased:
U.S. government securities	$	243,570	$	243,570	$	—	$	—	$	91,974	$	91,974	$	—	$	—
U.S. government agency securities		1,000		—		1,000		—
Agency mortgage-backed securities		231,909		—		231,909		—		141,227		—		141,227		—
Corporate securities:
Fixed income securities		140,100		633		139,467		—		162,626		4,094		158,532		—
Equity securities		32,047		32,047		—		—		30,848		30,848		—		—
Sovereign debt		13,271		—		13,271		—
Loans		955		—		—		955
Other ⁽²⁾										11,303		—		11,303		—
Total financial instruments sold, but not yet purchased	$	662,852	$	276,250	$	385,647	$	955	$	437,978	$	126,916	$	311,062	$	—

The following table summarizes the changes in fair value associated with Level 3 financial instruments during the three months ended ~~September 30, 2020~~March 31, 2021 (in thousands):

~~The following table summarizes the change in fair value associated with Level 3 financial instruments during the nine months ended September 30, 2020~~ ~~(in thousands):~~

The change in fair value associated with Level 3 financial instruments sold, but not yet purchased during the nine months ended September 30, 2020 is attributable to purchases, partially offset by unrealized losses and sales.

The results included in the ~~tables~~table above are only a component of the overall investment strategies of our company. The ~~tables~~table above dodoes not present Level 1 or Level 2 valued assets or liabilities. The changes in unrealized gains/(losses) recorded in earnings for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, relating to Level 3 assets still held at ~~September 30, 2020,~~March 31, 2021, 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.

The following reflects the fair value of financial instruments as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, whether or not recognized in the consolidated statements of financial condition at fair value (in thousands).

	September 30, 2020				December 31, 2019				March 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	1,716,570	$	1,716,570	$	1,142,596	$	1,142,596	$	1,425,511	$	1,425,511	$	2,279,274	$	2,279,274
Cash segregated for regulatory purposes		154,374		154,374		131,374		131,374		95,074		95,074		172,932		172,932
Securities purchased under agreements to resell		436,860		436,860		385,008		385,008		470,025		470,025		217,930		217,930
Financial instruments owned		819,715		819,715		972,932		972,932		981,282		981,282		694,028		694,028
Available-for-sale securities		2,824,258		2,824,258		3,254,737		3,254,737		2,190,128		2,190,128		2,230,297		2,230,297
Held-to-maturity securities		3,397,713		3,335,033		2,856,219		2,827,883		4,761,401		4,765,024		4,117,384		4,107,960
Bank loans		10,650,760		10,721,120		9,624,042		9,801,986		12,091,713		12,168,119		11,006,760		11,088,058
Loans held for sale		281,475		281,475		389,693		389,693		330,521		330,521		551,248		551,248
Investments		108,412		108,412		79,972		79,972		119,545		119,545		113,862		113,862
Derivative contracts ⁽¹⁾		—		—		1,086		1,086
Financial liabilities:
Securities sold under agreements to repurchase	$	182,271	$	182,271	$	391,634	$	391,634	$	208,228	$	208,228	$	190,955	$	190,955
Bank deposits		16,400,001		16,198,251		15,332,581		14,467,894		18,715,133		18,527,784		17,396,497		17,192,722
Financial instruments sold, but not yet purchased		599,934		599,934		662,852		662,852		644,762		644,762		437,978		437,978
Federal Home Loan Bank advances		—		—		250,000		250,000
Senior notes		1,412,005		1,560,013		1,017,010		1,069,425		1,112,672		1,228,983		1,112,409		1,265,669
Debentures to Stifel Financial Capital Trusts		60,000		39,338		60,000		45,847		60,000		46,444		60,000		41,071

The following tables present the estimated fair values of financial instruments not measured at fair value on a recurring basis as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

	September 30, 2020								March 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash	$	1,610,363	$	1,610,363	$	—	$	—	$	1,402,921	$	1,402,921	$	—	$	—
Cash segregated for regulatory purposes		154,374		154,374		—		—		95,074		95,074		��		—
Securities purchased under agreements to resell		436,860		337,095		99,765		—		470,025		424,621		45,404		—
Held-to-maturity securities		3,335,033		—		3,179,239		155,794		4,765,024		—		4,598,600		166,424
Bank loans		10,721,120		—		10,721,120		—		12,168,119		—		12,168,119		—
Loans held for sale		281,475		—		281,475		—		330,521		—		330,521		—
Financial liabilities:
Securities sold under agreements to repurchase	$	182,271	$	—	$	182,271	$	—	$	208,228	$	—	$	208,228	$	—
Bank deposits		16,198,251		—		16,198,251		—		18,527,784		—		18,527,784		—
Senior notes		1,560,013		1,560,013		—		—		1,228,983		1,228,983		—		—
Debentures to Stifel Financial Capital Trusts		39,338		—		—		39,338		46,444		—		—		46,444

	December 31, 2019								December 31, 2020
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets:
Cash	$	1,116,862	$	1,116,862	$	—	$	—	$	2,245,082	$	2,245,082	$	—	$	—
Cash segregated for regulatory purposes		131,374		131,374		—		—		172,932		172,932		—		—
Securities purchased under agreements to resell		385,008		342,132		42,876		—		217,930		164,094		53,836		—
Held-to-maturity securities		2,827,883		—		2,666,773		161,110		4,107,960		—		3,943,944		164,016
Bank loans		9,801,986		—		9,801,986		—		11,088,058		—		11,088,058		—
Loans held for sale		389,693		—		389,693		—		551,248		—		551,248		—
Financial liabilities:
Securities sold under agreements to repurchase	$	391,634	$	22,205	$	369,429	$	—	$	190,955	$	—	$	190,955	$	—
Bank deposits		14,467,894		—		14,467,894		—		17,192,722		—		17,192,722		—
Federal Home Loan Bank advances		250,000		250,000		—		—
Senior notes		1,069,425		1,069,425		—		—		1,265,669		1,265,669		—		—
Debentures to Stifel Financial Capital Trusts		45,847		—		—		45,847		41,071		—		—		41,071

The following, as supplemented by the discussion above, describes the valuation techniques used in estimating the fair value of our financial instruments as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

Securities purchased under agreements to resell are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 approximate fair value due to their short-term nature.

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 agency mortgage-backed securities, asset-backed securities, consisting of collateralized loan obligation securities and corporate fixed income securities. 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.

Loans held for sale consist of fixed-rate and adjustable-rate residential real estate mortgage loans intended for sale. Loans held for sale are stated at lower of cost or market value. Market value is determined based on prevailing market prices for loans with similar characteristics or on sale contract prices.

The fair values of mortgage loans and commercial loans were 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.

Securities sold under agreements to repurchase are collateralized financing transactions that are recorded at their contractual amounts plus accrued interest. The carrying values at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 approximate fair value due to the short-term nature.

The fair value of interest-bearing deposits, including certificates of deposits, demand deposits, savings, and checking accounts, was calculated by discounting the future cash flows using discount rates based on the replacement cost of funding of similar structures and terms.

~~FHLB advances reflect terms that approximate current market rates for similar borrowings.~~

The fair value of our senior notes is estimated based upon quoted market prices.

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 5 – Financial Instruments Owned and Financial Instruments Sold, But Not Yet Purchased

The components of financial instruments owned and financial instruments sold, but not yet purchased, at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 are as follows (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Financial instruments owned:
U.S. government securities	$	42,444	$	9,266
U.S. government agency securities		117,805		66,881
Mortgage-backed securities:
Agency		215,333		388,856
Non-agency		1,197		5,155
Asset-backed securities		44		28,385
Corporate securities:
Fixed income securities		219,734		250,783
Equity securities		71,387		64,009
Sovereign debt		3,069		12,403
State and municipal securities		143,201		137,211
Loans		5,501		9,983
	$	819,715	$	972,932
Financial instruments sold, but not yet purchased:
U.S. government securities	$	220,510	$	243,570	$	61,918	$	46,900
U.S. government agency securities		6,265		1,000		166,501		56,450
Agency mortgage-backed securities		135,005		231,909		254,203		216,434
Corporate securities:
Fixed income securities		177,744		140,100		223,545		194,575
Equity securities		42,017		32,047		82,402		67,593
Sovereign debt		18,393		13,271
Loans		—		955
State and municipal securities						162,083		96,150
Other ⁽¹⁾						30,630		15,926
	$	599,934	$	662,852	$	981,282	$	694,028
Financial instruments sold, but not yet purchased:
U.S. government securities					$	287,820	$	91,974
Agency mortgage-backed securities						121,648		141,227
Corporate securities:
Fixed income securities						185,728		162,626
Equity securities						34,443		30,848
Other ⁽²⁾						15,123		11,303
					$	644,762	$	437,978

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, financial instruments owned in the amount of ~~$167.0~~$180.5 million and ~~$511.2~~$194.0 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.

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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

	September 30, 2020									March 31, 2021
	Amortized Cost		Gross Unrealized Gains ⁽¹⁾		Gross Unrealized Losses ⁽¹⁾			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains ⁽¹⁾		Gross Unrealized Losses ⁽¹⁾			Estimated Fair Value
Available-for-sale securities
U.S. government agency securities	$	4,540	$	90	$	—		$	4,630	$	3,595	$	50	$	—		$	3,645
State and municipal securities		2,401		58		—			2,459		2,389		39		—			2,428
Mortgage-backed securities:
Agency		664,899		17,491		(216	)		682,174		997,913		14,592		(8,814	)		1,003,691
Commercial		93,864		3,957		—			97,821		84,555		2,914		(30	)		87,439
Non-agency		6,793		70		(84	)		6,779		3,648		10		—			3,658
Corporate fixed income securities		581,249		24,349		(43	)		605,555		695,698		19,702		(3,841	)		711,559
Asset-backed securities		1,438,951		3,502		(17,613	)		1,424,840		378,201		3,493		(3,986	)		377,708
	$	2,792,697	$	49,517	$	(17,956	)	$	2,824,258	$	2,165,999	$	40,800	$	(16,671	)	$	2,190,128
Held-to-maturity securities ⁽²⁾
Asset-backed securities	$	3,397,713	$	3,415	$	(66,095	)	$	3,335,033	$	4,761,401	$	10,044	$	(6,421	)	$	4,765,024

	December 31, 2019									December 31, 2020
	Amortized Cost		Gross Unrealized Gains ⁽¹⁾		Gross Unrealized Losses ⁽¹⁾			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains ⁽¹⁾		Gross Unrealized Losses ⁽¹⁾			Estimated Fair Value
Available-for-sale securities
U.S. government agency securities	$	5,028	$	39	$	—		$	5,067	$	4,293	$	68	$	—		$	4,361
State and municipal securities		24,198		99		—			24,297		2,395		58		—			2,453
Mortgage-backed securities:
Agency		840,659		3,070		(5,851	)		837,878		777,025		16,401		(16	)		793,410
Commercial		109,982		269		(714	)		109,537		91,237		4,376		—			95,613
Non-agency		9,731		50		(23	)		9,758		4,550		28		(9	)		4,569
Corporate fixed income securities		664,028		11,283		—			675,311		604,662		27,096		—			631,758
Asset-backed securities		1,600,415		679		(8,205	)		1,592,889		700,177		3,522		(5,566	)		698,133
	$	3,254,041	$	15,489	$	(14,793	)	$	3,254,737	$	2,184,339	$	51,549	$	(5,591	)	$	2,230,297
Held-to-maturity securities ⁽²⁾
Asset-backed securities	$	2,856,219	$	5,960	$	(34,296	)	$	2,827,883	$	4,117,384	$	8,111	$	(17,535	)	$	4,107,960

~~Effective January 1, 2020, we adopted the new accounting standard for credit losses that requires evaluation of~~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 1 –~~ ~~Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies~~. At ~~September 30, 2020,~~March 31, 2021, we did not have an allowance for credit losses recorded on our investment portfolio.

Accrued interest receivable for our investment portfolio at ~~September 30,~~March 31, 2021 and December 31, 2020 was ~~$25.1~~$22.5 million and $26.0 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 0 sales of available-for-sale securities during~~During the three months ended ~~September 30, 2020. For the nine months ended September 30, 2020,~~March 31, 2021, we received proceeds of $491.9 million, from the sale of available-for-sale securities, which resulted in a realized loss of $0.5 million. For the three and nine months ended September 30, 2019, we received proceeds of $486.5 million and $641.8 million, respectively, from the sale of available-for-sale securities, which resulted in an immaterial realized gain for the third quarter of 2019 and a realized loss of $0.3 million for the nine months ended September 30, 2019.

~~During the second quarter of 2020, the Company~~ transferred ~~$313.0~~$312.9 million of certain asset-backed securities from ~~the~~ available-for-sale ~~category~~ to held-to-maturity. Management determined that it has both the positive intent and ability to hold these securities to maturity. The reclassification of these securities was accounted for at fair value. On the date of transfer, the difference between the par value and the fair value of these securities resulted in a premium or discount that, under amortized cost accounting, will be amortized as a yield adjustment to interest income using the interest method. There were no0 gains or losses recognized as a result of this transfer.

~~During~~There were 0 sales of available-for-sale securities during the ~~third quarter~~three months ended March 31, 2021. For the three months ended March 31, 2020, we received proceeds of ~~2019, the Company transferred certain mortgage-backed securities~~$288.3 million from the ~~held-to-maturity category to available-for sale. As~~sale of ~~August 1, 2019, the~~available-for-sale securities, ~~reclassified had a fair value of $1.1 billion and~~which resulted in a ~~net~~realized loss of ~~tax increase to other comprehensive income of $17.9 million for the three and nine months ended September 30, 2019.~~$0.7 million.

During the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019, unrealized gains, net of deferred taxes, of $19.1 million and~~ unrealized losses, net of deferred taxes, of $1.6 million were recorded in accumulated other comprehensive loss in the consolidated statements of financial condition. During the nine months ended September 30, 2020 and September 30, 2019, unrealized gains, net of deferred taxes, of $22.5$22.7 million and ~~unrealized gains, net of deferred taxes, of $40.5~~$73.2 million were recorded in accumulated other comprehensive loss in the consolidated statements of financial condition.

The table below summarizes the amortized cost and fair values of our securities by contractual maturity at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (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.

	September 30, 2020				December 31, 2019				March 31, 2021				December 31, 2020
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Available-for-sale securities
Within one year	$	152,731	$	154,255	$	6,861	$	6,871	$	133,899	$	134,463	$	143,462	$	144,362
After one year through three years		85,773		88,263		229,184		229,760		121,840		124,825		134,040		137,625
After three years through five years		302,285		320,037		422,236		429,909		242,071		254,774		247,907		266,139
After five years through ten years		528,866		527,815		409,664		411,680		348,662		350,871		429,921		435,111
After ten years		1,723,042		1,733,888		2,186,096		2,176,517		1,319,527		1,325,195		1,229,009		1,247,060
	$	2,792,697	$	2,824,258	$	3,254,041	$	3,254,737	$	2,165,999	$	2,190,128	$	2,184,339	$	2,230,297
Held-to-maturity securities
After three years through five years	$	6,537	$	6,533	$	—	$	—	$	1,623	$	1,623	$	17,460	$	17,460
After five years through ten years		1,302,344		1,281,809		598,250		597,166		2,157,703		2,155,117		1,932,439		1,926,425
After ten years		2,088,832		2,046,691		2,257,969		2,230,717		2,602,075		2,608,284		2,167,485		2,164,075
	$	3,397,713	$	3,335,033	$	2,856,219	$	2,827,883	$	4,761,401	$	4,765,024	$	4,117,384	$	4,107,960

The maturities of our available-for-sale (fair value) and held-to-maturity (amortized cost) securities at ~~September 30, 2020,~~March 31, 2021, are as follows (in thousands):

	Within 1 Year		1-5 Years		5-10 Years		After 10 Years		Total		Within 1 Year		1-5 Years		5-10 Years		After 10 Years		Total
Available-for-sale securities ⁽¹⁾
U.S. government agency securities	$	2,318	$	2,312	$	—	$	—	$	4,630	$	2,522	$	1,123	$	—	$	—	$	3,645
State and municipal securities		—		—		2,459		—		2,459		—		—		2,428		—		2,428
Mortgage-backed securities:
Agency		11		444		24,017		657,702		682,174		11		272		78,213		925,195		1,003,691
Commercial		18,656		22		—		79,143		97,821		10,416		10		—		77,013		87,439
Non-agency		6,066		—		—		713		6,779		2,970		—		—		688		3,658
Corporate fixed income securities		127,204		405,522		55,732		17,097		605,555		118,544		378,194		214,821		—		711,559
Asset-backed securities		—		—		445,607		979,233		1,424,840		—		—		55,409		322,299		377,708
	$	154,255	$	408,300	$	527,815	$	1,733,888	$	2,824,258	$	134,463	$	379,599	$	350,871	$	1,325,195	$	2,190,128
Held-to-maturity securities
Asset-backed securities	$	—	$	6,537	$	1,302,344	$	2,088,832	$	3,397,713	$	—	$	1,623	$	2,157,703	$	2,602,075	$	4,761,401

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, securities of ~~$188.4~~$534.8 million and ~~$801.5~~$368.4 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, securities of ~~$1.5~~$1.0 billion and ~~$816.1 million,~~$1.4 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 ~~September 30, 2020~~March 31, 2021 (in thousands):

	Less than 12 months					12 months or more					Total					Less than 12 months					12 months or more					Total
	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
Available-for-sale securities
Mortgage-backed securities:
Agency	$	(118	)	$	6,797	$	(98	)	$	10,191	$	(216	)	$	16,988	$	(8,814	)	$	489,231	$	—		$	—	$	(8,814	)	$	489,231
Non-agency		—			—		(84	)		713		(84	)		713
Commercial																	(30	)		10,416		—			—		(30	)		10,416
Corporate fixed income securities		(43	)		13,956		—			—		(43	)		13,956		(3,841	)		143,201		—			—		(3,841	)		143,201
Asset-backed securities		(8,016	)		668,379		(9,597	)		622,139		(17,613	)		1,290,518		(1,267	)		43,136		(2,719	)		150,571		(3,986	)		193,707
	$	(8,177	)	$	689,132	$	(9,779	)	$	633,043	$	(17,956	)	$	1,322,175	$	(13,952	)	$	685,984	$	(2,719	)	$	150,571	$	(16,671	)	$	836,555

At ~~September 30, 2020,~~March 31, 2021, the amortized cost of 9145 securities classified as available for sale exceeded their fair value by ~~$18.0~~$16.7 million, of which ~~$9.8~~$2.7 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 ~~September 30, 2020,~~March 31, 2021, was ~~$1.3 billion,~~$836.6 million, which was ~~46.8%~~38.2% of our available-for-sale portfolio.

The Company uses Moody credit ratings as the primary credit quality indicator for its held-to-maturity debt securities. 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. The following table shows the amortized cost of our held-to-maturity securities by credit quality indicator at ~~September 30, 2020~~March 31, 2021 (in thousands):

	AAA		AA		A		C		Total		AAA		AA		A		C		Total
Held-to-maturity securities
Asset-backed securities	$	423,043	$	2,956,572	$	15,500	$	2,598	$	3,397,713	$	1,280,256	$	3,445,799	$	32,855	$	2,491	$	4,761,401

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 corporate loans include the borrower’s financial strength, seniority of the loan, collateral type, leverage, volatility of collateral value, debt cushion, and covenants.

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.

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 a real estate project.

The following table presents the balance and associated percentage of each major loan category in our bank loan portfolio at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands, except percentages):

	September 30, 2020						December 31, 2019						March 31, 2021						December 31, 2020
	Balance			Percent			Balance			Percent			Balance			Percent			Balance			Percent
Commercial and industrial	$	4,080,939			37.9	%	$	3,438,953			35.3	%	$	4,923,494			40.3	%	$	4,296,089			38.5	%
Residential real estate		3,804,836			35.4			3,309,548			33.9			4,158,033			34.0			3,956,670			35.4
Securities-based loans		1,841,516			17.1			2,098,211			21.5			2,089,747			17.1			1,933,974			17.3
Construction and land														560,191			4.6			501,681			4.5
Commercial real estate		386,957			3.6			428,549			4.4			374,736			3.1			366,485			3.3
Construction and land		532,319			5.0			398,839			4.1
Home equity lines of credit		67,386			0.6			51,205			0.5			71,172			0.6			75,507			0.7
Other		39,735			0.4			27,311			0.3			37,819			0.3			40,407			0.3
Gross bank loans		10,753,688			100.0	%		9,752,616			100.0	%		12,215,192			100.0	%		11,170,813			100.0	%
Unamortized loan discount, net		(2,260	)					(6,588	)					(1,695	)					(1,822	)
Loans in process		13,398						(27,717	)					(13,012	)					(48,222	)
Unamortized loan fees, net		47						1,310						(1,104	)					(1,980	)
Allowance for loan losses		(114,113	)					(95,579	)					(107,668	)					(112,029	)
Loans held for investment, net	$	10,650,760					$	9,624,042					$	12,091,713					$	11,006,760

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, Stifel Bancorp had loans outstanding to its executive officers and directors and executive officers and directors of certain affiliated entities in the amount of ~~$21.8~~$25.1 million and ~~$24.5~~$23.6 million, respectively.

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, we had loans held for sale of ~~$281.5~~$330.5 million and ~~$389.7~~$551.2 million, respectively. For the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we recognized gains of ~~$15.0~~$13.9 million and ~~$4.5 million, respectively, from the sale of originated loans, net of fees and costs. For the nine months ended September 30, 2020 and 2019, we recognized gains of $28.0 million and $7.7~~$2.5 million, respectively, from the sale of originated loans, net of fees and costs.

Effective January 1, 2020, we adopted the new accounting standard for credit losses that requires evaluation of our loan portfolio for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 1 – ~~Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies~~.

Accrued interest receivable for loans and loans held for sale at ~~September 30,~~March 31, 2021 and December 31, 2020 was ~~$18.6~~$21.3 million and $20.8 million, respectively, and is reported in other assets on the consolidated statement of financial condition.

The following ~~tables detail~~table details activity in the allowance for loan losses by portfolio segment for the three ~~and nine~~ months ended ~~September 30, 2020~~ March 31, 2021 (in thousands).

	Nine Months Ended September 30, 2020															Three Months Ended March 31, 2021
	Beginning Balance		CECL Adoption			Provision			Charge-offs			Recoveries		Ending Balance		Beginning Balance		Provision			Charge-offs			Recoveries		Ending Balance
Commercial and industrial	$	69,949	$	(19,940	)	$	25,949		$	(153	)	$	4	$	75,809	$	67,222	$	(9,972	)	$	(934	)	$	—	$	56,316
Construction and land																	17,275		1,598			—			—		18,873
Residential real estate		14,253		3,499			(69	)		—			—		17,683		16,300		365			—			—		16,665
Construction and land		4,613		2,674			2,899	��		—			—		10,186
Commercial real estate		3,564		791			3,562			—			—		7,917		8,580		4,480			—			—		13,060
Securities-based loans		2,361		1,346			(1,805	)		—			—		1,902		2,015		154			—			—		2,169
Home equity lines of credit		442		39			(188	)		—			88		381		374		(33	)		—			—		341
Other		194		58			21			(40	)		2		235		263		(19	)		—			—		244
Unallocated		203		(203	)		—			—			—		—
	$	95,579	$	(11,736	)	$	30,369		$	(193	)	$	94	$	114,113	$	112,029	$	(3,427	)	$	(934	)	$	—	$	107,668

The provision for unfunded lending commitments was a credit of ~~$3.0~~$1.8 million and ~~an expense of $0.1~~$2.9 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, respectively, and ~~are~~is included in the provision for credit losses on the consolidated statement of operations. 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 following table ~~presents the recorded balances of loans and amount of allowance allocated based upon impairment method by portfolio segment at September 30, 2020~~ ~~(in thousands)~~:

~~The following tables detail~~details activity in the allowance for loan losses by portfolio segment for the three ~~and nine~~ months ended ~~September 30, 2019~~ March 31, 2020 (in thousands).

~~The following table presents the recorded balances of loans and amount of allowance allocated based upon impairment method by portfolio segment at December 31, 2019~~ ~~(in thousands)~~:

	Allowance for Loan Losses						Recorded Investment in Loans						Three Months Ended March 31, 2020
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Beginning Balance		CECL Adoption			Provision			Charge-offs			Recoveries		Ending Balance
Commercial and industrial	$	8,158	$	61,791	$	69,949	$	12,991	$	3,425,962	$	3,438,953	$	69,949	$	(19,940	)	$	9,955		$	(2	)	$	—	$	59,962
Residential real estate		24		14,229		14,253		1,412		3,308,136		3,309,548		14,253		3,499			2,233			—			—		19,985
Construction and land														4,613		2,674			3,666			—			—		10,953
Commercial real estate														3,564		791			3,810			—			—		8,165
Securities-based loans		—		2,361		2,361		—		2,098,211		2,098,211		2,361		1,346			(792	)		—			—		2,915
Commercial real estate		—		3,564		3,564		—		428,549		428,549
Construction and land		—		4,613		4,613		—		398,839		398,839
Home equity lines of credit		—		442		442		184		51,021		51,205		442		39			57			—			1		539
Other		—		194		194		—		27,311		27,311		397		(145	)		49			(18	)		—		283
Unallocated		—		203		203		—		—		—
	$	8,182	$	87,397	$	95,579	$	14,587	$	9,738,029	$	9,752,616	$	95,579	$	(11,736	)	$	18,978		$	(20	)	$	1	$	102,802

At ~~September 30, 2020,~~March 31, 2021, we had ~~$14.5~~$13.6 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at ~~September 30, 2020~~March 31, 2021 was $8.2 million. At December 31, ~~2019,~~2020, we had ~~$14.6~~$13.8 million of impaired loans, net of discounts, which included $0.2 million in troubled debt restructurings. The specific allowance on impaired loans at December 31, ~~2019~~2020 was $8.2 million. The gross interest income related to impaired 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 three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ were insignificant to the consolidated financial statements.

In ~~March~~December 2020, the ~~President signed into law~~U.S. federal government enacted the ~~Coronavirus Aid, Relief,~~Consolidated Appropriations Act of 2021, which provided additional COVID-19 relief to American families and ~~Economic Security Act (“CARES Act”), which among other things, provided optional, temporary~~business, including extending TDR relief ~~from accounting for certain loan modifications as troubled debt restructurings (TDRs). Under~~under the CARES Act ~~TDR relief is available to banks for loan modifications related to the adverse effects of the~~

~~coronavirus (COVID-19) pandemic granted to borrowers that were current as of December 31, 2019. TDR relief applies to COVID-related modifications made from March 1, 2020,~~ until the earlier of December 31, ~~2020,~~2021, or 60 days following the termination of the national ~~emergency declared by the President of the United States. We elected to apply the TDR relief provided by the CARES Act in the second quarter of 2020.~~

The tables below present loans that were individually evaluated for impairment by portfolio segment at September 30, 2020 and December 31, 2019, including the average recorded investment balance for the year to date period presented ~~(in thousands)~~:emergency.

The following tables present the aging of the recorded investment in past due loans at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 by portfolio segment (in thousands):

	As of September 30, 2020										As of March 31, 2021
	30 – 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total		30 – 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total
Commercial and industrial	$	144	$	12,940	$	13,084	$	4,067,855	$	4,080,939	$	—	$	11,408	$	11,408	$	4,912,086	$	4,923,494
Residential real estate		3,290		1,337		4,627		3,800,209		3,804,836		3,941		1,925		5,866		4,152,167		4,158,033
Securities-based loans		—		—		—		1,841,516		1,841,516		—		—		—		2,089,747		2,089,747
Construction and land												—		—		—		560,191		560,191
Commercial real estate		—		—		—		386,957		386,957		—		144		144		374,592		374,736
Construction and land		—		—		—		532,319		532,319
Home equity lines of credit		686		—		686		66,700		67,386		233		—		233		70,939		71,172
Other		25		—		25		39,710		39,735		17		—		17		37,802		37,819
Total	$	4,145	$	14,277	$	18,422	$	10,735,266	$	10,753,688	$	4,191	$	13,477	$	17,668	$	12,197,524	$	12,215,192

	As of September 30, 2020*								As of March 31, 2021*
	Non-Accrual		Restructured		Nonperforming loans with no allowance		Total		Non-Accrual		Restructured		Nonperforming loans with no allowance		Total
Commercial and industrial	$	13,084	$	—	$	—	$	13,084	$	11,408	$	—	$	—	$	11,408
Residential real estate		—		160		1,249		1,409		676		158		1,249		2,083
Commercial real estate										144		—		—		144
Total	$	13,084	$	160	$	1,249	$	14,493	$	12,228	$	158	$	1,249	$	13,635

	As of December 31, 2019										As of December 31, 2020
	30 – 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total		30 – 89 Days Past Due		90 or More Days Past Due		Total Past Due		Current Balance		Total
Commercial and industrial	$	—	$	12,940	$	12,940	$	3,426,013	$	3,438,953	$	14	$	12,237	$	12,251	$	4,283,838	$	4,296,089
Residential real estate		10,476		1,249		11,725		3,297,823		3,309,548		4,554		1,249		5,803		3,950,867		3,956,670
Securities-based loans		—		—		—		2,098,211		2,098,211		—		—		—		1,933,974		1,933,974
Construction and land												—		—		—		501,681		501,681
Commercial real estate		—		—		—		428,549		428,549		—		144		144		366,341		366,485
Construction and land		—		—		—		398,839		398,839
Home equity lines of credit		83		184		267		50,938		51,205		12		—		12		75,495		75,507
Other		5		—		5		27,306		27,311		31		—		31		40,376		40,407
Total	$	10,564	$	14,373	$	24,937	$	9,727,679	$	9,752,616	$	4,611	$	13,630	$	18,241	$	11,152,572	$	11,170,813

	As of December 31, 2019*						As of December 31, 2020*
	Non-Accrual		Restructured		Total		Non-Accrual		Restructured		Nonperforming loans with no allowance		Total
Commercial and industrial	$	12,940	$	—	$	12,940	$	12,251	$	—	$	—	$	12,251
Residential real estate		1,249		163		1,412		—		158		1,249		1,407
Home equity lines of credit		184		—		184
Commercial real estate								144		—		—		144
Total	$	14,373	$	163	$	14,536	$	12,395	$	158	$	1,249	$	13,802

As of ~~September 30, 2020,~~March 31, 2021, 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. A loan is determined to be impaired when principal or interest becomes 90 days past due or when collection becomes uncertain. At the time a loan is determined to be impaired, the accrual of interest and amortization of deferred loan origination fees is discontinued (“non-accrual 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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019, 98.6%~~2020, 98.9% and ~~98.3%~~98.8% 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.

Substandard loans are regularly reviewed for impairment. Doubtful loans are considered impaired. When a loan is impaired the impairment is measured 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.

Based on the most recent analysis performed, the risk category of our loan portfolio was as follows (in thousands):

	As of September 30, 2020										As of March 31, 2021
	Pass		Special Mention		Substandard		Doubtful		Total		Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	3,791,192	$	120,663	$	156,144	$	12,940	$	4,080,939	$	4,607,280	$	164,839	$	139,967	$	11,408	$	4,923,494
Residential real estate		3,802,942		645		—		1,249		3,804,836		4,155,773		335		—		1,925		4,158,033
Securities-based loans		1,841,516		—		—		—		1,841,516		2,089,747		—		—		—		2,089,747
Construction and land												525,951		14,240		20,000		—		560,191
Commercial real estate		385,645		1,168		144		—		386,957		366,154		5,802		2,636		144		374,736
Construction and land		498,079		14,240		20,000		—		532,319
Home equity lines of credit		66,920		466		—		—		67,386		71,172		—		—		—		71,172
Other		39,735		—		—		—		39,735		37,819		—		—		—		37,819
Total	$	10,426,029	$	137,182	$	176,288	$	14,189	$	10,753,688	$	11,853,896	$	185,216	$	162,603	$	13,477	$	12,215,192

	As of December 31, 2019										As of December 31, 2020
	Pass		Special Mention		Substandard		Doubtful		Total		Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	3,365,800	$	48,241	$	11,972	$	12,940	$	3,438,953	$	3,995,351	$	105,759	$	182,728	$	12,251	$	4,296,089
Residential real estate		3,307,719		417		1,412		—		3,309,548		3,955,421		—		—		1,249		3,956,670
Securities-based loans		2,098,211		—		—		—		2,098,211		1,933,974		—		—		—		1,933,974
Construction and land												467,441		14,240		20,000		—		501,681
Commercial real estate		427,963		586		—		—		428,549		356,008		10,333		—		144		366,485
Construction and land		398,839		—		—		—		398,839
Home equity lines of credit		51,021		—		184		—		51,205		75,507		—		—		—		75,507
Other		27,311		—		—		—		27,311		40,407		—		—		—		40,407
Total	$	9,676,864	$	49,244	$	13,568	$	12,940	$	9,752,616	$	10,824,109	$	130,332	$	202,728	$	13,644	$	11,170,813

	Term Loans Amortized Cost Basis by Origination Year – March 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial:
Pass	$	852,103	$	494,747	$	527,136	$	679,772	$	302,188	$	502,085	$	1,249,249	$	4,607,280
Special Mention		—		503		30,309		82,558		45,947		4,200		1,322		164,839
Substandard		—		—		23,921		43,195		63,558		7,762		1,531		139,967
Doubtful		—		—		—		—		11,394		14		—		11,408
	$	852,103	$	495,250	$	581,366	$	805,525	$	423,087	$	514,061	$	1,252,102	$	4,923,494
Residential real estate:
Pass	$	485,925	$	1,548,638	$	815,040	$	340,371	$	271,808	$	693,991	$	—	$	4,155,773
Special Mention		—		—		—		—		—		335		—		335
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		825		1,100		—		1,925
	$	485,925	$	1,548,638	$	815,040	$	340,371	$	272,633	$	695,426	$	—	$	4,158,033
Securities-based loans:
Pass	$	973	$	38,702	$	102,973	$	294	$	140	$	16,906	$	1,929,759	$	2,089,747
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	973	$	38,702	$	102,973	$	294	$	140	$	16,906	$	1,929,759	$	2,089,747
Construction and land:
Pass	$	13,842	$	87,316	$	218,904	$	128,179	$	62,248	$	6,401	$	9,061	$	525,951
Special Mention		—		—		—		14,240		—		—		—		14,240
Substandard		—		—		—		20,000		—		—		—		20,000
Doubtful		—		—		—		—		—		—		—		—
	$	13,842	$	87,316	$	218,904	$	162,419	$	62,248	$	6,401	$	9,061	$	560,191
Commercial real estate:
Pass	$	22,047	$	81,378	$	152,732	$	25,328	$	38,352	$	45,975	$	342	$	366,154
Special Mention		—		—		—		—		—		5,802		—		5,802
Substandard		—		—		—		—		—		2,636		—		2,636
Doubtful		—		—		—		144		—		—		—		144
	$	22,047	$	81,378	$	152,732	$	25,472	$	38,352	$	54,413	$	342	$	374,736
Home equity lines of credit:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	71,172	$	71,172
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	—	$	71,172	$	71,172
Other:
Pass	$	—	$	—	$	—	$	4	$	—	$	445	$	37,370	$	37,819
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	4	$	—	$	445	$	37,370	$	37,819

Term Loans Amortized Cost Basis by Origination Year – September 30, 2020

2020

2019

2018

2017

2016

Prior

Revolving Loans Amortized Cost Basis

Total

Commercial and industrial:

Pass

$
466,481

$
105,957

$
2,355,918

$
19,375

$
11,154

$
47,763

$
784,544

$
3,791,192

Special Mention

—

—

106,214

—

—

—

14,449

120,663

Substandard

—

—

146,584

—

—

27

9,533

156,144

Doubtful

—

—

—

12,940

—

—

—

12,940

$
466,481

$
105,957

$
2,608,716

$
32,315

$
11,154

$
47,790

$
808,526

$
4,080,939

Residential real estate:

Pass

$
1,217,617

$
964,320

$
412,590

$
326,393

$
303,909

$
578,113

$
—

$
3,802,942

Special Mention

—

—

—

645

—

—

—

645

Substandard

—

—

—

—

—

—

—

—

Doubtful

—

—

—

149

—

1,100

—

1,249

$
1,217,617

$
964,320

$
412,590

$
327,187

$
303,909

$
579,213

$
—

$
3,804,836

Securities-based loans:

Pass

$
21,968

$
108,647

$
25,825

$
195

$
300

$
56,691

$
1,627,890

$
1,841,516

Special Mention

—

—

—

—

—

—

—

—

Substandard

—

—

—

—

—

—

—

—

Doubtful

—

—

—

—

—

—

—

—

$
21,968

$
108,647

$
25,825

$
195

$
300

$
56,691

$
1,627,890

$
1,841,516

Commercial real estate:

Pass

$
74,689

$
158,422

$
42,432

$
52,387

$
13,470

$
43,469

$
776

$
385,645

Special Mention

—

—

—

—

1,168

—

—

1,168

Substandard

—

—

144

—

—

—

—

144

Doubtful

—

—

—

—

—

—

—

—

$
74,689

$
158,422

$
42,576

$
52,387

$
14,638

$
43,469

$
776

$
386,957

Construction and land:

Pass

$
44,892

$
254,524

$
111,147

$
68,495

$
6,852

$
1,370

$
10,799

$
498,079

Special Mention

—

—

14,240

—

—

—

—

14,240

Substandard

—

—

20,000

—

—

—

—

20,000

Doubtful

—

—

—

—

—

—

—

—

$
44,892

$
254,524

$
145,387

$
68,495

$
6,852

$
1,370

$
10,799

$
532,319

Home equity lines of credit:

Pass

$
—

$
—

$
—

$
—

$
—

$
—

$
66,920

$
66,920

Special Mention

—

—

—

—

—

—

466

466

Substandard

—

—

—

—

—

—

—

—

Doubtful

—

—

—

—

—

—

—

—

$
—

$
—

$
—

$
—

$
—

$
—

$
67,386

$
67,386

Other:

Pass

$
—

$
—

$
6

$
—

$
755

$
20,049

$
18,925

$
39,735

Special Mention

—

—

—

—

—

—

—

—

Substandard

—

—

—

—

—

—

—

—

Doubtful

—

—

—

—

—

—

—

—

$
—

$
—

$
6

$
—

$
755

$
20,049

$
18,925

$
39,735

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, 2019		Adjustments			Sale of ZCM			September 30, 2020		December 31, 2020		Adjustments		Write-off		March 31, 2021
Goodwill
Global Wealth Management	$	344,981	$	—		$	(9,972	)	$	335,009	$	335,009	$	—	$	—	$	335,009
Institutional Group		849,093		(2,104	)		—			846,989		846,989		315		—		847,304
	$	1,194,074	$	(2,104	)	$	(9,972	)	$	1,181,998	$	1,181,998	$	315	$	—	$	1,182,313

	December 31, 2019		Adjustments/ Sale of ZCM			Amortization			September 30, 2020		December 31, 2020		Adjustments		Amortization			March 31, 2021
Intangible assets
Global Wealth Management	$	53,279	$	(1,532	)	$	(5,006	)	$	46,741	$	44,671	$	—	$	(1,305	)	$	43,366
Institutional Group		108,494		(280	)		(9,483	)		98,731		96,313		60		(2,963	)		93,410
	$	161,773	$	(1,812	)	$	(14,489	)	$	145,472	$	140,984	$	60	$	(4,268	)	$	136,776

The adjustments to goodwill and intangible assets during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 are primarily attributable to the ~~sale~~acquisition of ~~ZCM,~~North Atlantic Capital Corporation in February 2021 and the ~~acquisitions~~impact of ~~Mooreland Partners on July 1, 2019 and B&F Capital Markets on September 3, 2019.~~

~~On March 27, 2020,~~exchange rate changes during the Company completed the sale of ZCM, a wholly owned asset management subsidiary. The Company recorded a gain on the sale, which included a write-off of allocated goodwill and the remaining net book value of intangible assets.

The allocation of the purchase price of these acquisitions are 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.

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.period.

Amortizable intangible assets consist of acquired customer relationships, trade name, investment banking backlog, and non-compete agreements that are amortized over their contractual or determined useful lives. Intangible assets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows (in thousands):

	September 30, 2020				December 31, 2019				March 31, 2021				December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Customer relationships	$	203,188	$	82,990	$	207,253	$	75,987	$	202,424	$	87,941	$	202,342	$	85,152
Trade names		28,659		15,196		28,659		13,649		28,659		16,097		28,659		15,660
Non-compete agreements										9,240		4,586		9,240		4,229
Core deposits		8,615		4,387		8,615		2,985		8,615		5,210		8,615		4,809
Non-compete agreements		9,240		3,825		9,490		2,828
Investment banking backlog		840		303		4,245		1,787		4,245		2,970		4,245		2,734
Acquired technology		4,045		2,414		840		93		840		443		840		373
	$	254,587	$	109,115	$	259,102	$	97,329	$	254,023	$	117,247	$	253,941	$	112,957

Amortization expense related to intangible assets was ~~$4.7~~$4.3 million and ~~$3.8~~$5.0 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Amortization expense related to intangible assets was $14.5 million and $11.0 million for the nine months ended September 30, 2020 and 2019,~~ respectively. Amortization expense is included in other operating expenses in the consolidated statements of operations.

The weighted-average remaining lives of the following intangible assets at ~~September 30, 2020,~~March 31, 2021, are: customer relationships, ~~9.9~~10.3 years; trade name, 9.1 years; non-compete agreements, 5.9 years; core deposits, 3.3 ~~years; non-compete agreements, 6.1~~ years; investment banking backlog, 7.9 years; and acquired technology, ~~1.8~~1.5 years. We have an intangible asset that is not subject to amortization and is, therefore, not included in the table below. As of ~~September 30, 2020,~~March 31, 2021, we expect amortization expense in future periods to be as follows (in thousands):

Fiscal year
Remainder of 2020	$	4,630
2021		17,769
Remainder of 2021			$	13,554
2022		16,444		16,454
2023		14,619		14,601
2024		13,958		13,888
2025				11,841
Thereafter		75,934		64,320
	$	143,354	$	134,658

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 and customer securities pledged as collateral. The value of customer-owned securities used as collateral is not reflected in the consolidated statements of financial condition. We also have an unsecured, committed bank line available.

Our uncommitted secured lines of credit at ~~September 30, 2020,~~March 31, 2021, totaled ~~$915.0~~$880.0 million with 54 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 ~~$490.0~~$50.0 million during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. There are 0 compensating balance requirements under these arrangements. Any borrowings on secured lines of credit are generally utilized to finance certain fixed income securities. At ~~September 30, 2020,~~March 31, 2021, we had 0 outstanding balances on our uncommitted secured lines of credit.

Federal Home Loan advances are floating-rate advances. The weighted average interest rates on these advances during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 was ~~1.31% and 1.43%, respectively.~~0.29%. 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 ~~September 30, 2020,~~March 31, 2021, there were 0 Federal Home Loan advances.

Our committed bank line financing at ~~September 30, 2020,~~March 31, 2021, consisted of a $200.0 million revolving credit facility. The credit facility expires in March 2024. The applicable interest rate under the revolving credit facility is calculated as a per annum rate equal to the London Interbank Offered Rate (“LIBOR”) plus 1.75%, as defined in the revolving credit facility. At ~~September 30, 2020,~~March 31, 2021, we had 0 advances on our revolving credit facility and were in compliance with all covenants.

Stifel, our broker-dealer subsidiary, has a 364-day Credit Agreement (“Stifel Credit Facility”) with a maturity date of June 2021 in which the lenders are a number of financial institutions. This committed unsecured borrowing facility provides for maximum borrowings of up to $300.0 million at variable rates of interest. At ~~September 30, 2020,~~March 31, 2021, we had 0 advances on the Stifel Credit Facility and were in compliance with all covenants.

The following table summarizes our senior notes as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

	September 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
4.25% senior notes, due 2024 ⁽¹⁾	$	500,000		$	500,000		$	500,000		$	500,000
3.50% senior notes, due 2020 ⁽²⁾		300,000			300,000
4.00% senior notes, due 2030 ⁽²⁾								400,000			400,000
5.20% senior notes, due 2047 ⁽³⁾		225,000			225,000			225,000			225,000
4.00% senior notes, due 2030 ⁽⁴⁾		400,000			—
		1,425,000			1,025,000			1,125,000			1,125,000
Debt issuance costs, net		(12,995	)		(7,990	)		(12,328	)		(12,591	)
Senior notes, net	$	1,412,005		$	1,017,010		$	1,112,672		$	1,112,409

Our senior notes mature as follows, based upon contractual terms (in thousands):

2020	$	300,000
2021		—	$	—
2022		—		—
2023		—		—
2024		500,000		500,000
2025				—
Thereafter		625,000		625,000
	$	1,425,000	$	1,125,000

Deposits consist of interest-bearing-demand deposits (primarily money market and savings ~~accounts,~~accounts), non-interest-bearing demand deposits, and certificates of ~~deposit, and demand deposits.~~deposit. Deposits at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Money market and savings accounts	$	15,653,048	$	13,530,670
Demand deposits (interest-bearing)		363,999		1,113,296	$	18,125,863	$	16,886,953
Demand deposits (non-interest-bearing)		271,056		165,657		524,338		411,890
Certificates of deposit		111,898		522,958		64,932		97,654
	$	16,400,001	$	15,332,581	$	18,715,133	$	17,396,497

The weighted-average interest rate on deposits was ~~0.11%~~0.03% and ~~0.64%~~0.09% at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

Scheduled maturities of certificates of deposit at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Certificates of deposit, less than $100,000:
Within one year	$	3,120	$	5,305	$	2,222	$	2,719
One to three years		244		360		263		409
Three to five years		13		13		54		254
	$	3,377	$	5,678	$	2,539	$	3,382
Certificates of deposit, $100,000 and greater:
Within one year	$	74,158	$	441,341	$	35,419	$	63,650
One to three years		34,163		68,855		26,874		30,622
Three to five years		200		7,084		100		—
		108,521		517,280		62,393		94,272
	$	111,898	$	522,958	$	64,932	$	97,654

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the amount of deposits includes related party deposits, primarily interest-bearing and time deposits of executive officers, directors, and their affiliates of ~~$8.8~~$6.4 million and $6.7 million, respectively. Brokerage customers’ deposits were ~~$15.4~~$16.8 billion and ~~$13.9~~$16.0 billion, respectively.

The following ~~table provides~~tables provide information about financial ~~assets and derivative~~ assets that are subject to offset as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

Gross amounts not offset
in the Statement of
Financial Condition

Gross
Amounts of
Recognized
Assets

Gross
Amounts
Offset in
the Statement
of Financial
Condition

Net
Amounts
Presented in
the Statement
of Financial
Condition

Amounts available for offset

Available collateral

Net
Amount

As of September 30, 2020:

Securities borrowing ⁽¹⁾

$
178,517

$
—

$
178,517

$
(31,528
)

$
(127,965
)

$
19,024

Reverse repurchase agreements ⁽²⁾

436,860

—

436,860

(48,594
)

(384,970
)

3,296

$
615,377

$
—

$
615,377

$
(80,122
)

$
(512,935
)

$
22,320

As of December 31, 2019:

Securities borrowing ⁽¹⁾

$
135,373

$
—

$
135,373

$
(52,319
)

$
(74,760
)

$
8,294

Reverse repurchase agreements ⁽²⁾

385,008

—

385,008

(59,892
)

(325,096
)

20

Cash flow interest rate contracts

1,086

—

1,086

—

—

1,086

$
521,467

$
—

$
521,467

$
(112,211
)

$
(399,856
)

$
9,400

	As of March 31, 2021
	Securities borrowing ⁽¹⁾			Reverse repurchase agreements ⁽²⁾			Total
Gross amounts of recognized assets	$	285,662		$	470,025		$	755,687
Gross amounts offset in the statement of financial condition		—			—			—
Net amounts presented in the statement of financial condition		285,662			470,025			755,687
Gross amounts not offset in the statement of financial condition:
Amounts available for offset		(51,786	)		(22,733	)		(74,519	)
Available collateral		(226,199	)		(445,144	)		(671,343	)
Net amount	$	7,677		$	2,148		$	9,825

The following ~~table provides~~tables provide information about financial ~~liabilities and derivative~~ liabilities that are subject to offset as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

Gross amounts not offset
in the Statement of
Financial Condition

Gross
Amounts of
Recognized
Liabilities

Gross
Amounts
Offset in
the Statement
of Financial
Condition

Net
Amounts
Presented in
the Statement
of Financial
Condition

Amounts available for offset

Collateral
Pledged

Net
Amount

As of September 30, 2020:

Securities lending ⁽³⁾

$
(87,352
)

$
—

$
(87,352
)

$
31,528

$
55,802

$
(22
)
Repurchase agreements ⁽⁴⁾

(182,271
)

—

(182,271
)

48,594

133,677

—

$
(269,623
)

$
—

$
(269,623
)

$
80,122

$
189,479

$
(22
)
As of December 31, 2019:

Securities lending ⁽³⁾

$
(608,333
)

$
—

$
(608,333
)

$
52,319

$
555,782

$
(232
)
Repurchase agreements ⁽⁴⁾

(391,634
)

—

(391,634
)

59,892

331,742

—

$
(999,967
)

$
—

$
(999,967
)

$
112,211

$
887,524

$
(232
)

	As of March 31, 2021
	Securities lending ⁽³⁾			Repurchase agreements ⁽⁴⁾			Total
Gross amounts of recognized liabilities	$	(231,700	)	$	(208,228	)	$	(439,928	)
Gross amounts offset in the statement of financial condition		—			—			—
Net amounts presented in the statement of financial condition		(231,700	)		(208,228	)		(439,928	)
Gross amounts not offset in the statement of financial condition:
Amounts available for offset		51,786			22,733			74,519
Collateral pledged		178,055			185,495			363,550
Net amount	$	(1,859	)	$	—		$	(1,859	)

In the normal course of business, we enter into underwriting commitments. Settlement of transactions relating to such underwriting commitments, which were open at ~~September 30, 2020,~~March 31, 2021, 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 security 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 ~~September 30, 2020,~~March 31, 2021, the fair value of the TBA securities and the estimated fair value of the purchase commitments were ~~$119.5~~$121.6 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.

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 20 in the notes to consolidated financial statements for further details.

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 ~~September 30, 2020,~~March 31, 2021, we did not have significant concentrations of credit risk with any one customer or counterparty, or any group of customers or counterparties.

Our 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. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. Our 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. We are contesting allegations in these claims, and we believe that there are meritorious defenses in each of these lawsuits, arbitrations, and regulatory investigations. In view of the number and diversity of claims against our company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, we cannot state with certainty what the eventual outcome of pending litigation or other claims will be.

We have established reserves for potential losses that are probable and reasonably estimable that may result from pending and potential legal actions, investigations, and regulatory proceedings. In many cases, however, it is inherently difficult to determine whether any loss is probable or reasonably possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated.

In our opinion, based on currently available information, review with outside legal counsel, and consideration of amounts provided for in our consolidated financial statements with respect to these matters, including the matter described below, the ultimate resolution of these matters will not have a material adverse impact on our financial position and results of operations. 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 reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, based on currently available information, we believe that such losses will not have a material effect on our consolidated financial statements.

Stifel has been named as a defendant in a United States District Court, Eastern District of Michigan, Southern Division, litigation in connection with the underwriting of bonds to finance the Karegnondi Water Authority (“KWA”) pipeline, a new water pipeline intended to serve Flint, Michigan and surrounding areas. The lawsuit is filed against JP Morgan Chase, as senior manager, and Stifel and Wells Fargo, as co-managers, who underwrote the bonds for the KWA in 2014. The complaint alleges novel claims against the underwriter defendants, including conspiracy and professional negligence. We intend to defend vigorously against the allegations.

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 2 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 15 times their net capital (as defined).

Our international subsidiary, SNEL, is subject to the regulatory supervision and requirements of the Financial Conduct Authority (“FCA”) in the United Kingdom. At ~~September 30, 2020,~~March 31, 2021, 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 Investment Industry Regulatory Organization of Canada (“IIROC”). At ~~September 30, 2020,~~March 31, 2021, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the IIROC.

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 it’s 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 ~~September 30, 2020~~March 31, 2021 are represented in the tables below (in thousands, except ratios).

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions					Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
Stifel Financial Corp.	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Common equity tier 1 capital	$	2,197,654		15.4	%	$	640,212		4.5	%	$	924,750		6.5	%	$	2,498,655		16.0	%	$	704,519		4.5	%	$	1,017,639		6.5	%
Tier 1 capital		2,732,654		19.2	%		853,616		6.0	%		1,138,154		8.0	%		3,033,655		19.4	%		939,359		6.0	%		1,252,479		8.0	%
Total capital		2,888,681		20.3	%		1,138,154		8.0	%		1,422,693		10.0	%		3,184,779		20.3	%		1,252,479		8.0	%		1,565,598		10.0	%
Tier 1 leverage		2,732,654		11.3	%		971,609		4.0	%		1,214,512		5.0	%		3,033,655		11.5	%		1,056,763		4.0	%		1,320,954		5.0	%

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions					Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
Stifel Bank & Trust	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Common equity tier 1 capital	$	1,034,480		11.7	%	$	397,280		4.5	%	$	573,849		6.5	%	$	1,044,894		11.1	%	$	424,271		4.5	%	$	612,836		6.5	%
Tier 1 capital		1,034,480		11.7	%		529,707		6.0	%		706,276		8.0	%		1,044,894		11.1	%		565,694		6.0	%		754,259		8.0	%
Total capital		1,144,843		13.0	%		706,276		8.0	%		882,845		10.0	%		1,164,585		12.4	%		754,259		8.0	%		942,824		10.0	%
Tier 1 leverage		1,034,480		7.2	%		578,347		4.0	%		722,934		5.0	%		1,044,894		7.1	%		590,236		4.0	%		737,795		5.0	%

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions					Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
Stifel Bank	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Common equity tier 1 capital	$	201,106		18.0	%	$	50,266		4.5	%	$	72,606		6.5	%	$	280,718		18.5	%	$	68,279		4.5	%	$	98,625		6.5	%
Tier 1 capital		201,106		18.0	%		67,021		6.0	%		89,361		8.0	%		280,718		18.5	%		91,039		6.0	%		121,385		8.0	%
Total capital		215,097		19.3	%		89,361		8.0	%		111,701		10.0	%		291,823		19.2	%		121,385		8.0	%		151,731		10.0	%
Tier 1 leverage		201,106		7.3	%		110,807		4.0	%		138,508		5.0	%		280,718		7.3	%		154,213		4.0	%		192,766		5.0	%

Our operating leases primarily relate to office space and office equipment with remaining lease terms of 1 to 1615 years. At ~~September 30,~~March 31, 2021 and December 31, 2020, operating lease right-of-use assets were ~~$771.2~~$774.8 million and ~~included in fixed assets, net in the consolidated statements of financial condition,~~$793.2 million, respectively, and lease liabilities were ~~$811.0~~$822.8 million and $839.8 million, respectively, included in accounts payable and accrued expenses in the consolidated statements of financial condition.

The table below summarizes our net lease cost for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):

	Three Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2021			2020
Operating lease cost	$	25,251		$	22,921		$	25,123		$	24,395
Short-term lease cost		590			403			155			476
Variable lease cost		20			54			108			15
Sublease income		(997	)		(1,244	)		(659	)		(908	)
Net lease cost	$	24,864		$	22,134		$	24,727		$	23,978

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 three months ended ~~September 30, 2020~~March 31, 2021 (in thousands):

Operating lease cash flows	$	63,724		$	22,712
Right-of-use assets obtained in exchange for new operating lease liabilities				$	8,956
Weighted-average remaining lease term	12.1 years			12.1 years
Weighted-average discount rate		4.32	%		4.18	%

~~In the table above, the weighted average~~The weighted-average discount rate represents our company’s incremental borrowing rate ~~as of January 2019 for leases existing on the date of adoption of the new lease standard and~~ at the lease inception ~~date for leases entered into subsequent to the adoption of ASU 2016-02.~~date.

The table below presents information about operating lease liabilities as of ~~September 30, 2020,~~March 31, 2021, (in thousands, except percentages).

Remainder of 2020	$	21,202
2021		92,043
Remainder of 2021				$	75,086
2022		94,084			99,194
2023		93,289			97,821
2024		92,127			95,917
2025					93,931
Thereafter		686,863			600,909
Total undiscounted lease payments		1,079,608			1,062,858
Imputed interest		(268,582	)		(240,107	)
Total operating lease liabilities	$	811,026		$	822,751

The following table presents the Company’s total revenues broken out by revenues from contracts with customers and other sources of revenues for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):

	Nine Months Ended September 30,				Three Months Ended March 31,
	2020		2019		2021		2020
Revenues from contracts with customers:
Commissions	$	560,780	$	484,350	$	213,614	$	211,098
Investment banking		614,637		540,247		339,288		179,468
Asset management and service fees		667,496		624,066		278,147		237,775
Other		32,408		12,779		16,882		4,767
Total revenue from contracts with customers		1,875,321		1,661,442		847,931		633,108
Other sources of revenue:
Interest		403,956		557,795		127,540		161,177
Principal transactions		445,566		298,343		165,006		138,666
Other		18,571		21,682		8,752		4,440
Total revenues	$	2,743,414	$	2,539,262	$	1,149,229	$	937,391

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.

The following provides detailed information on the recognition of our revenues from contracts with customers:

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.

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, 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 fees 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 fees 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 are 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 Fees. 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.

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 three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):

	Three Months Ended September 30, 2020⁽¹⁾								Three Months Ended March 31, 2021⁽¹⁾
	Global Wealth Management		Institutional Group		Other		Total		Global Wealth Management		Institutional Group		Other		Total
Major business activity:
Commissions ⁽¹⁾	$	120,600	$	52,054	$	—	$	172,654	$	147,505	$	66,109	$	—	$	213,614
Capital raising ⁽¹⁾		8,113		129,179		—		137,292		13,549		195,257		—		208,806
Advisory fees ⁽¹⁾		—		80,842		—		80,842		—		130,482		—		130,482
Investment banking		8,113		210,021		—		218,134		13,549		325,739		—		339,288
Asset management		230,765		17		—		230,782		278,109		38		—		278,147
Other		14,535		—		794		15,329		14,924		—		1,958		16,882
Total		374,013		262,092		794		636,899		454,087		391,886		1,958		847,931
Primary Geographic Region:
United States		374,013		209,141		794		583,948		454,087		303,848		1,958		759,893
United Kingdom		—		30,959		—		30,959		—		45,391		—		45,391
Canada										—		29,746		—		29,746
Other		—		21,992		—		21,992		—		12,901		—		12,901
	$	374,013	$	262,092	$	794	$	636,899	$	454,087	$	391,886	$	1,958	$	847,931

	Three Months Ended September 30, 2019⁽¹⁾								Three Months Ended March 31, 2020⁽¹⁾
	Global Wealth Management		Institutional Group		Other		Total		Global Wealth Management		Institutional Group		Other		Total
Major business activity:
Commissions	$	118,061	$	45,859	$	—	$	163,920	$	136,897	$	74,198	$	3	$	211,098
Capital raising ⁽¹⁾		9,855		84,087		—		93,942		10,314		93,082		—		103,396
Advisory fees ⁽¹⁾		—		104,848		—		104,848		19		76,053		—		76,072
Investment banking		9,855		188,935		—		198,790		10,333		169,135		—		179,468
Asset management		217,616		12		—		217,628		237,760		15		—		237,775
Other		4,615		—		634		5,249		4,001		—		766		4,767
Total		350,147		234,806		634		585,587		388,991		243,348		769		633,108
Primary Geographic Region:
United States		350,147		195,220		634		546,001		388,991		198,043		769		587,803
United Kingdom		—		38,249		—		38,249		—		30,763		—		30,763
Canada										—		5,223		—		5,223
Other		—		1,337		—		1,337		—		9,319		—		9,319
	$	350,147	$	234,806	$	634	$	585,587	$	388,991	$	243,348	$	769	$	633,108

⁽¹⁾ ~~Excludes revenues not derived from contracts with customers included in the Other segment.~~

⁽¹⁾Excludes revenues not derived from contracts with customers included in the Other segment.

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 ~~September 30, 2020.~~March 31, 2021. Investment banking advisory fees 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 ~~September 30, 2020.~~March 31, 2021.

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 ~~$156.5~~$202.4 million and ~~$151.3~~$148.6 million at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. We had 0 significant impairments related to these receivables during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Our deferred revenue primarily relates to retainer fees received in investment banking advisory engagements and investment advisory fees where the performance obligation has not yet been satisfied. Deferred revenue at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was ~~$15.1~~$20.3 million and ~~$11.3~~$12.1 million, respectively.

The components of interest income and interest expense are as follows (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2020			2019		2020			2019		2021		2020
Interest income:
Loans held for investment, net	$	76,281		$	95,436	$	250,565		$	284,541	$	87,239	$	95,120
Investment securities		31,966			54,945		121,630			182,127		29,952		48,137
Margin balances		5,803			13,334		22,298			40,437		6,091		10,131
Financial instruments owned		2,924			5,668		10,357			18,395		2,895		4,574
Other		(2,563	)		9,401		(894	)		32,295		1,363		3,215
	$	114,411		$	178,784	$	403,956		$	557,795	$	127,540	$	161,177
Interest expense:
Senior notes											$	12,103	$	11,193
Bank deposits	$	1,478		$	24,815	$	13,324		$	82,228		1,283		9,569
Senior notes		15,411			11,121		39,677			33,365
Federal Home Loan Bank advances		515			1,146		3,550			5,735		11		2,353
Other		(3,582	)		7,062		(5,288	)		25,155		1,043		1,242
	$	13,822		$	44,144	$	51,263		$	146,483	$	14,440	$	24,357

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.

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 are authorized to grant an additional ~~6.4~~8.3 million shares at ~~September 30, 2020.~~March 31, 2021.

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 ~~$39.7~~$42.4 million and ~~$33.6~~$37.0 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $116.0 million and $97.4 million for the nine months ended September 30, 2020 and 2019,~~ respectively.

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 employee 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 one to five years.

Our 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 ~~September 30, 2020,~~March 31, 2021, the total number of restricted stock units, PRSUs, and restricted stock awards outstanding was ~~14.5~~19.5 million, of which ~~12.5~~16.8 million were unvested.

At ~~September 30, 2020,~~March 31, 2021, there was unrecognized compensation cost for deferred awards of approximately ~~$514.4~~$666.1 million, which is expected to be recognized over a weighted-average period of ~~2.7~~2.8 years.

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’s financial advisors who achieve certain levels of production the option to defer a certain percentage of their gross commissions. As stipulated by the Plan, the financial advisors will defer 5% of their gross commissions. 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 financial advisors, upon joining our 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.

Eligible U.S. associates of our 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 were ~~$3.9~~$3.8 million and ~~$3.2~~$3.5 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively and $11.0 million and $9.6 million for the nine months ended September 30, 2020 and 2019,~~ respectively.

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 two business days 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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was ~~$1.9~~$2.2 billion and ~~$2.3~~$1.8 billion, respectively, and the fair value of the collateral that had been sold or repledged was ~~$182.3~~$208.2 million and ~~$391.6~~$191.0 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. As of ~~September 30, 2020,~~March 31, 2021, derivative balances were immaterial.

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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, Stifel Bancorp had outstanding commitments to originate loans aggregating ~~$1.0 billion~~$840.4 million and ~~$384.5~~$889.0 million, respectively. The commitments extended over varying periods of time, with all commitments at ~~September 30, 2020,~~March 31, 2021, 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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, Stifel Bancorp had outstanding letters of credit totaling ~~$31.1~~$26.3 million and ~~$38.3~~$31.8 million, respectively. A majority of the standby letters of credit commitments at ~~September 30, 2020,~~March 31, 2021, 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 ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, Stifel Bancorp had granted unused lines of credit to commercial and consumer borrowers aggregating ~~$2.1~~$2.8 billion and ~~$1.5~~$2.5 billion, respectively.

~~Effective January 1, 2020, we adopted the new accounting standard for credit losses that requires evaluation of~~We are required to evaluate our loan portfolio for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 1 – Nature of Operations, Basis of Presentation, and Summary of Significant Accounting Policies. Upon the adoption of the new accounting standard, we recorded a reserve for unfunded commitments of $20.4 million, which is included in accounts payable and accrued expenses in the consolidated statements of financial condition. At ~~September 30, 2020,~~March 31, 2021, the expected credit losses for unfunded lending commitments was ~~$21.2~~$21.4 million.

We currently operate through the following 3 business segments: Global Wealth Management, Institutional Group, and various corporate activities combined in the Other segment.

Our Global Wealth Management segment consists of 2 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 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 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 concerning operations in these segments of business for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2020			2019			2020			2019			2021			2020
Net revenues: ⁽¹⁾
Global Wealth Management	$	526,836		$	534,571		$	1,615,574		$	1,577,614		$	631,495		$	582,956
Institutional Group		363,365			290,222			1,093,699			822,110			506,081			332,238
Other		(6,901	)		(3,221	)		(17,122	)		(6,945	)		(2,787	)		(2,160	)
	$	883,300		$	821,572		$	2,692,151		$	2,392,779		$	1,134,789		$	913,034
Income/(loss) before income taxes:
Global Wealth Management	$	178,930		$	202,823		$	529,422		$	589,665		$	223,231		$	194,167
Institutional Group		76,841			48,623			201,630			120,129			117,188			41,740
Other		(97,378	)		(100,692	)		(314,593	)		(273,249	)		(112,527	)		(120,801	)
	$	158,393		$	150,754		$	416,459		$	436,545		$	227,892		$	115,106

The following table presents our company’s total assets on a segment basis at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):

	September 30, 2020		December 31, 2019		March 31, 2021		December 31, 2020
Global Wealth Management	$	20,784,329	$	20,675,580	$	23,560,912	$	21,743,202
Institutional Group		3,806,220		3,668,723		3,996,969		3,733,661
Other		958,633		265,922		583,700		1,127,391
	$	25,549,182	$	24,610,225	$	28,141,581	$	26,604,254

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.

Revenues, classified by the major geographic areas in which they are earned for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2020		2019		2020		2019		2021		2020
United States	$	814,301	$	775,356	$	2,485,336	$	2,271,056	$	1,015,895	$	860,132
United Kingdom		45,705		43,632		147,097		113,783		61,218		37,738
Canada										42,356		3,543
Other		23,294		2,584		59,718		7,940		15,320		11,621
	$	883,300	$	821,572	$	2,692,151	$	2,392,779	$	1,134,789	$	913,034

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 three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2020		2019		2020		2019		2021		2020
Net income applicable to Stifel Financial Corp.	$	120,527	$	109,414	$	315,003	$	317,706
Net income									$	173,015	$	86,589
Preferred dividends		9,897		4,844		19,584		12,476		8,289		4,844
Net income available to common shareholders	$	110,630	$	104,570	$	295,419	$	305,230	$	164,726	$	81,745
Shares for basic and diluted calculation:
Average shares used in basic computation		70,627		71,197		70,814		72,512		107,746		106,929
Dilutive effect of stock options and units ⁽¹⁾		5,223		6,947		4,898		6,314		10,129		8,000
Average shares used in diluted computation		75,850		78,144		75,712		78,826		117,875		114,929
Earnings per common share:
Basic	$	1.57	$	1.47	$	4.17	$	4.21	$	1.53	$	0.76
Diluted	$	1.46	$	1.34	$	3.90	$	3.87	$	1.40	$	0.71

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the anti-dilutive effect from restricted stock units was immaterial.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, we declared and paid cash dividends of $0.15 per common share. During the three months ended March 31, 2020, we declared and paid cash dividends of ~~$0.17 and $0.51~~$0.11 per common share. ~~During the three and nine months ended September 30, 2019, we declared and paid cash dividends of $0.15 and $0.45 per common share.~~

We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. At ~~September 30, 2020,~~March 31, 2021, the maximum number of shares that may yet be purchased under this plan was ~~8.9~~13.0 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 company’s employee benefit plans and for general corporate purposes. ~~There were 0 share repurchases during~~During the three months ended ~~September 30, 2020. During the nine months ended September 30, 2020,~~March 31, 2021, we repurchased ~~$56.5~~$12.7 million or ~~1.1~~0.2 million shares using existing Board authorizations at an average price of ~~$49.62~~$61.91 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes. During the three months ended ~~September 30, 2019,~~March 31, 2020, we repurchased ~~$55.5~~$56.2 million, or ~~1.0~~1.7 million shares using existing Board authorizations at an average price of ~~$55.43~~$33.16 per share to meet obligations under our company’s employee benefit plans and for general corporate purposes. ~~During the nine months ended September 30, 2019, we repurchased $180.4 million, or 3.3~~

~~million shares using existing Board authorizations at an average price of $55.10~~ ~~per share to meet obligations under our company’s employee benefit plans and for general corporate purposes.~~

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we issued ~~1.4~~2.3 million shares, which were primarily reissued from treasury. Share issuances were primarily a result of the vesting and conversion transactions under our incentive stock award plans.

On May 19, 2020, the Company issued $225.0 million of 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, $1.00 par value, with a liquidation preference of $25,000 per share (equivalent to $25 liquidation preference per depositary share), which included the sale of $25.0 million of Series C Preferred, pursuant to the over-allotment option.

When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 6.125%, payable quarterly, in arrears. The Company may redeem the Series C preferred stock at its option, subject to regulatory approval, on or after June 15, 2025.

On February 21, 2019, the Company issued $150.0 million of 6.25% Non-Cumulative Perpetual Preferred Stock, Series B, $1.00 par value, with a liquidation preference of $25,000 per share (equivalent to $25 liquidation preference per depositary share). In March 2019, the Company completed a public offering of an additional $10.0 million of Series B Preferred, pursuant to the over-allotment option.

When, as, and if declared by the board of directors of the Company, dividends will be payable at an annual rate of 6.25%, payable quarterly, in arrears. The Company may redeem the Series B preferred stock at its option, subject to regulatory approval, on or after March 15, 2024.

Our company’s involvement with VIEs is limited to entities used as investment vehicles and private equity funds, the establishment of Stifel Financial Capital Trusts, and our issuance of a convertible promissory note.

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 partnerships and LLCs have assets of ~~$254.2~~$330.3 million at ~~September 30, 2020.~~March 31, 2021. 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. Management fee revenue earned by our company was insignificant during the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020. In addition, our direct investment interest in these entities is insignificant at ~~September 30, 2020.~~March 31, 2021.

For the entities noted above that were determined to be VIEs, we have concluded that we are not the primary beneficiary, and therefore, we are not required to consolidate these entities.

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.

We evaluate subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are 2 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.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, and the accompanying consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q.

Certain statements in this report may be considered forward-looking. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements cover, among other things, statements made about general economic and market conditions (including the impact of the COVID-19 pandemic on these conditions), the investment banking industry, objectives and results, and also may include our belief regarding the effect of various legal proceedings, management expectations, our liquidity and funding sources, counterparty credit risk, or other similar matters. In addition, statements about the potential effects of the COVID-19 pandemic on the Company’s businesses and results of operations and financial condition may constitute forward-looking statements. These statements are subject to the risk that the actual effects may differ, possibly materially from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable, and in many cases, beyond the Company’s control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on its customers, third-parties, and the Company.

Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including those factors discussed under “External Factors Impacting Our Business” ~~and “Risk Factors”~~ in Part II, Item 1A in this Quarterly Report on Form 10-Q, as well as the factors identified under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, as updated in our subsequent reports filed with the SEC. These reports are available at the Company’s web site at www.stifel.com and at the SEC web site at www.sec.gov.

Because of these and other uncertainties, the Company’s actual future results may be materially different from the results indicated by these forward-looking statements. In addition, the Company’s past results of operations do not necessarily indicate its future results. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events, unless it is obligated to do so under federal securities laws.

Unless otherwise indicated, the terms “we,” “us,” “our” or “our company” in this report refer to Stifel Financial Corp. and its wholly owned subsidiaries.

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 United States and in Europe. 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 major geographic area of concentration is throughout the United States, with a growing presence in the United Kingdom and Europe. Our company’s principal customers are individual investors, corporations, municipalities, and institutions.

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 employee focus have earned us a reputation as one of the leading brokerage and investment banking firms off Wall Street. 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 the consolidation among middle-market firms, whereby allowing us to increase market share in our Global Wealth Management and Institutional Group businesses.

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 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.~~

On May 19, 2020, the Company completed an underwritten registered public offering of $225 million 6.125% Non-Cumulative Perpetual Preferred Stock, Series C (“Series C Preferred), which included the sale of $25.0 million of Series C Preferred pursuant to an over-allotment option.

~~In the first quarter~~The global economy has recovered considerably since its decline last spring, but there is still a high degree of 2020, the World Health Organization declared the outbreak of a novel strand of the coronavirus (“COVID-19”) a pandemic. Since that time, authorities have implemented numerous measures attempting to contain the spread and impact of COVID-19, such as travel bans and restrictions, quarantines, shelter-in-place orders and limitations on business activity, including closures. Certain jurisdictions have begun re-opening only to return to restrictions in the face of increases in new COVID-19 cases. Recent developments include the phased re-opening of domestic and global markets and other economic activity to varying degrees. These measures have severely restricted global economic activity, which is disrupting global supply chains, lowering asset valuations, significantly increasing unemployment and underemployment levels, decreasing liquidity in markets for certain securities and causing significant volatility and disruptions in the financial, energy and commodity markets. Recent outbreaks in various states indicate that COVID-19, and related measures to address the pandemic, will continue to impact and disrupt the global and domestic economy and, by extension, our business, well into 2021.

To address the economic impact in the U.S., in March and April 2020, the President signed into law various stimulus packages to provide relief to businesses and individuals. In addition, the Board of Governors of the Federal Reserve System (“Federal Reserve”) has taken additional steps to bolster the economy by providing additional funding sources for small and midsized businesses as well as for state and local governments as they work through cash flow stresses caused byuncertainty resulting from the COVID-19 pandemic, as well as ~~reducing~~a new federal government administration. As a result, volatility of both brokerage revenues and investment banking revenues could continue, which may negatively impact our ability to sustain the ~~federal funds rate~~current quarter revenue levels in future periods.

We are continuously monitoring circumstances around COVID-19, as well as economic and ~~the interest rate on the Federal Reserve’s discount window,~~capital market conditions, and ~~implementing programs~~providing frequent communications to ~~promote liquidity in certain securities markets.~~

~~Subsequently, in light of the foregoing government actions~~both our clients and more clarity from the U.S. Federal Reserve Bank on future interest rate policy, the equity markets experienced a strong rebound and a supportive trading environment for investors has emerged along with renewed activity in the equity and debt new issue capital markets.our associates We have ~~experienced strong market volumes and increased client activity~~adopted enhanced cleaning practices across our ~~capital markets~~offices, have restricted non-essential business travel, and have monitored the health and welfare of our employees and worked actively with ~~considerably improved performance.~~

~~In response to the pandemic, we implemented protocols and processes to help protect our associates and clients. These measures include:~~

many individuals diagnosed with COVID-19. We continue to ~~monitor the effects of the pandemic, both on~~execute our Business Continuity Plan and maintain a ~~national level as well as regionally and locally, and are responding accordingly. In addition, we continue to provide frequent communications~~largely remote working environment across all functions without any significant disruptions to our ~~clients, employees, and regulators.~~

business or control processes. In connection with reviewing our financial condition in light of the pandemic, we evaluated our assets, including goodwill and other intangibles, for potential impairment, and reviewed fair values of financial instruments that are carried at fair value. Based upon our review as of ~~September 30, 2020,~~March 31, 2021, no impairments have been recorded and there have been no significant changes in fair value hierarchy classifications.

Results for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021

For the three months ended ~~September 30, 2020,~~March 31, 2021, net revenues increased ~~7.5%~~24.3% to ~~$883.3 million~~a record $1.1 billion from ~~$821.6~~$913.0 million during the comparable period in ~~2019.~~2020. Net income available to common shareholders increased ~~5.8%~~101.5% to ~~$110.6~~$164.7 million, or ~~$1.46~~$1.40 per diluted common share for the three months ended ~~September 30, 2020,~~March 31, 2021, compared to ~~$104.6~~$81.7 million, or ~~$1.34~~$0.71 per diluted common share during the comparable period in ~~2019.~~

For the nine months ended September 30, 2020, net revenues increased 12.5% to a record $2.7 billion compared to $2.4 billion during the comparable period in 2019. Net income available to common shareholders decreased 3.2% to $295.4 million, or $3.90 per diluted common share for the nine months ended September 30, 2020, compared to $305.2 million, or $3.87 per diluted common share during the comparable period in 2019.2020.

Our revenue growth for the three months ended ~~September 30, 2020~~March 31, 2021 was primarily attributable to an increase in ~~brokerage~~investment banking revenues, ~~increased capital raising revenues, and~~ asset management and service fees, and brokerage revenues, partially offset by lower net interest ~~income and advisory fee revenues.~~

Our revenue growth for the nine months ended September 30, 2020 was primarily attributable to an increase in brokerage revenues, increased capital raising revenues, and asset management and service fees, partially offset by lower net interest income and advisory fee revenues.income.

Performance in the financial services industry in which we operate is highly correlated to the overall strength of economic conditions and financial market activity. Overall market conditions are a product of many factors, which are beyond our control and mostly unpredictable. These factors may affect the financial decisions made by investors, including their level of participation in the financial markets. In turn, these decisions may affect our business results. With respect to financial market activity, our profitability is sensitive to a variety of factors, including the demand for investment banking services as reflected by the number and size of equity and debt financings and merger and acquisition transactions, the volatility of the equity and fixed income markets, the level and shape of various yield curves, the volume and value of trading in securities, and the value of our customers’ assets under management.

The COVID-19 pandemic has severely impacted, and ~~will likely~~may continue to severely impact, global economic conditions, resulting in substantial volatility in the global financial markets, increased unemployment, and operational challenges such as the temporary closures of businesses, sheltering-in-place directives and increased remote work protocols. Governments and central banks around the world have reacted to the economic crisis caused by the pandemic by implementing stimulus and liquidity programs and cutting interest rates, though it is unclear whether these or future actions will be successful in countering the economic disruption. Recently, there has been widespread distribution and inoculation of the U.S. population with vaccines that have generally been proven to be both safe and effective. If the pandemic is prolonged or the actions of governments and central banks are unsuccessful, the adverse impact on the global economy will deepen, and our results of operations and financial condition in future quarters will be adversely affected.

The operating environment continued to recover during the third quarter of 2020 from the impact of the COVID-19 pandemic earlier in the year as global economic activity significantly rebounded following a sharp decrease in the second quarter, market volatility declined modestly, and monetary and fiscal policy remained accommodative. As a result, global equity prices increased and credit spreads tightened compared with the end of the second quarter of 2020.

The resurgence of COVID-19 in many states adds to the uncertainty of the shape of an economic recovery. We experienced lower sequential trading volumes in the third quarter of 2020 and lower net interest income as the zero rate environment impacted our loan and securities book. The diversity of our business helped offset some of these headwinds during the third quarter.

Effective January 1, 2020, we adopted the new accounting standard on current expected credit losses (“CECL”), under which the allowance is measured based on management’s best estimate of lifetime expected credit losses. Upon adoption of the new accounting standard, we recorded a $10.4 million, or a 10.7% increase to the allowance for credit losses. In addition, during the nine months ended September 30, 2020 we built $33.9 million of net credit loss reserves reflecting the impact of changes in our company’s economic outlook on estimated lifetime losses under the CECL standard due to the COVID-19 pandemic.

Our overall financial results continue to be highly and directly correlated to the direction and activity levels of the United States equity and fixed income markets. At ~~September 30, 2020,~~March 31, 2021, the ~~NASDAQ and~~Dow Jones Industrial Average, S&P 500, and NASDAQ closed ~~24.5%~~7.8%, 5.8%, and ~~4.1%~~2.8% higher than their December 31, ~~2019~~2020 closing prices, respectively. ~~The Dow Jones Industrial Average closed 2.7% lower than its December 31, 2019 closing price.~~

As a participant in the financial services industry, we are subject to complicated and extensive regulation of our business. The recent economic and political environment has led to legislative and regulatory initiatives, both enacted and proposed, that could substantially intensify the regulation of the financial services industry and may significantly impact us.

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared with Three Months Ended ~~September 30, 2019~~March 31, 2020

The following table presents consolidated financial information for the periods indicated (in thousands, except percentages):

	Three Months Ended September 30,								As a Percentage of Net Revenues For the Three Months Ended September 30,						Three Months Ended March 31,								As a Percentage of Net Revenues For the Three Months Ended March 31,
	2020			2019		% Change			2020			2019			2021			2020		% Change			2021			2020
Revenues:
Commissions	$	172,654		$	163,920		5.3			19.5	%		20.0	%	$	213,614		$	211,098		1.2			18.8	%		23.1	%
Principal transactions		140,883			97,847		44.0			16.0			11.9			165,006			138,666		19.0			14.6			15.2
Brokerage revenues		313,537			261,767		19.8			35.5			31.9			378,620			349,764		8.3			33.4			38.3
Investment banking		218,134			198,790		9.7			24.7			24.2			339,288			179,468		89.1			29.9			19.7
Asset management and service fees		230,782			217,628		6.0			26.1			26.5			278,147			237,775		17.0			24.5			26.0
Interest		114,411			178,784		(36.0	)		13.0			21.8			127,540			161,177		(20.9	)		11.2			17.7
Other income		20,258			8,747		131.6			2.3			1.0			25,634			9,207		178.4			2.3			1.0
Total revenues		897,122			865,716		3.6			101.6			105.4			1,149,229			937,391		22.6			101.3			102.7
Interest expense		13,822			44,144		(68.7	)		1.6			5.4			14,440			24,357		(40.7	)		1.3			2.7
Net revenues		883,300			821,572		7.5			100.0			100.0			1,134,789			913,034		24.3			100.0			100.0
Non-interest expenses:
Compensation and benefits		533,638			486,160		9.8			60.4			59.2			697,914			577,179		20.9			61.5			63.2
Occupancy and equipment rental		68,598			58,649		17.0			7.8			7.1			72,032			66,073		9.0			6.3			7.2
Communication and office supplies		40,123			36,817		9.0			4.5			4.5			41,825			41,124		1.7			3.7			4.5
Commissions and floor brokerage		13,254			10,542		25.7			1.5			1.3			15,703			14,842		5.8			1.4			1.6
Provision for credit losses		(1,353	)		929	n/m				(0.2	)		0.1			(5,252	)		16,068		(132.7	)		(0.5	)		1.8
Other operating expenses		70,647			77,721		(9.1	)		8.1			9.5			84,675			82,642		2.5			7.5			9.1
Total non-interest expenses		724,907			670,818		8.1			82.1			81.7			906,897			797,928		13.7			79.9			87.4
Income before income taxes		158,393			150,754		5.1			17.9			18.3			227,892			115,106		98.0			20.1			12.6
Provision for income taxes		37,866			40,632		(6.8	)		4.3			4.9			54,877			28,517		92.4			4.9			3.1
Net Income		120,527			110,122		9.4			13.6			13.4			173,015			86,589		99.8			15.2			9.5
Net income applicable to non-controlling interests		—			708	n/m				—			0.1
Net income applicable to Stifel Financial Corp.		120,527			109,414		10.2			13.6			13.3
Preferred dividends		9,897			4,844		104.3			1.1			0.6			8,289			4,844		71.1			0.7			0.5
Net income available to common shareholders	$	110,630		$	104,570		5.8			12.5	%		12.7	%	$	164,726		$	81,745		101.5			14.5	%		9.0	%

~~Nine months ended September 30, 2020 Compared with Nine months ended September 30, 2019~~

~~The following table presents consolidated financial information for the periods indicated~~ ~~(in thousands, except percentages)~~:

Nine Months Ended September 30,

As a Percentage of Net Revenues For the Nine Months Ended September 30,

2020

2019

%
Change

2020

2019

Revenues:

Commissions

$
560,780

$
484,350

15.8

20.8
%

20.2
%
Principal transactions

445,566

298,343

49.3

16.6

12.5

Brokerage revenues

1,006,346

782,693

28.6

37.4

32.7

Investment banking

614,637

540,247

13.8

22.8

22.6

Asset management and service fees

667,496

624,066

7.0

24.8

26.1

Interest

403,956

557,795

(27.6
)

15.0

23.3

Other income

50,979

34,461

47.9

1.9

1.4

Total revenues

2,743,414

2,539,262

8.0

101.9

106.1

Interest expense

51,263

146,483

(65.0
)

1.9

6.1

Net revenues

2,692,151

2,392,779

12.5

100.0

100.0

Non-interest expenses:

Compensation and benefits

1,657,991

1,411,135

17.5

61.6

59.0

Occupancy and equipment rental

200,935

178,566

12.5

7.5

7.5

Communication and office supplies

124,293

107,583

15.5

4.6

4.5

Commissions and floor brokerage

43,273

32,506

33.1

1.6

1.4

Provision for credit losses

33,925

5,565

509.6

1.3

0.2

Other operating expenses

215,275

220,879

(2.5
)

7.9

9.2

Total non-interest expenses

2,275,692

1,956,234

16.3

84.5

81.8

Income before income taxes

416,459

436,545

(4.6
)

15.5

18.2

Provision for income taxes

101,456

117,227

(13.5
)

3.8

4.9

Net Income

315,003

319,318

(1.4
)

11.7

13.3

Net income applicable to non-controlling interests

—

1,612

n/m

—

0.1

Net income applicable to Stifel Financial Corp.

315,003

317,706

(0.9
)

11.7

13.2

Preferred dividends

19,584

12,476

57.0

0.7

0.5

Net income available to common shareholders

$
295,419

$
305,230

(3.2
)

11.0
%

12.7
%

The following table presents consolidated net revenues for the periods indicated (in thousands, except percentages):

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change
Net revenues:
Commissions	$	172,654	$	163,920		5.3		$	560,780	$	484,350		15.8		$	213,614	$	211,098		1.2
Principal transactions		140,883		97,847		44.0			445,566		298,343		49.3			165,006		138,666		19.0
Brokerage revenues		313,537		261,767		19.8			1,006,346		782,693		28.6			378,620		349,764		8.3
Capital raising																208,806		103,396		101.9
Advisory fees		80,842		104,847		(22.9	)		254,752		292,648		(12.9	)		130,482		76,072		71.5
Capital raising		137,292		93,943		46.1			359,885		247,599		45.3
Investment banking		218,134		198,790		9.7			614,637		540,247		13.8			339,288		179,468		89.1
Asset management and service fees		230,782		217,628		6.0			667,496		624,066		7.0			278,147		237,775		17.0
Net interest		100,589		134,640		(25.3	)		352,693		411,312		(14.3	)		113,100		136,820		(17.3	)
Other income		20,258		8,747		131.6			50,979		34,461		47.9			25,634		9,207		178.4
Total net revenues	$	883,300	$	821,572		7.5		$	2,692,151	$	2,392,779		12.5		$	1,134,789	$	913,034		24.3

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 three months ended ~~September 30, 2020,~~March 31, 2021, commission revenues increased ~~5.3%~~1.2% to ~~$172.7~~$213.6 million from ~~$163.9~~$211.1 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, commission revenues increased 15.8% to $560.8 million~~

~~from $484.4 million in the comparable period in 2019.~~2020. The increase is primarily attributable to higher trading volumes due to market ~~volatility as a result of the risks from the COVID-19 pandemic.~~volatility.

Principal transactions – Principal transaction revenues are gains and losses on secondary trading, principally fixed income brokerage revenues.

For the three months ended ~~September 30, 2020,~~March 31, 2021, principal transactions revenues increased ~~44.0%~~19.0% to ~~$140.9~~$165.0 million from ~~$97.8~~$138.7 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, principal transactions revenues increased 49.3% to $445.6 million from $298.3 million in the comparable period in 2019.~~2020. The increase is primarily attributable to strong client engagement and market volatility.

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 three months ended ~~September 30, 2020,~~March 31, 2021, investment banking revenues increased ~~9.7%~~89.1% to ~~$218.1~~a record $339.3 million from ~~$198.8~~$179.5 million in the comparable period in ~~2019.~~2020.

~~Advisory fee~~Capital raising revenues ~~decreased 22.9%~~increased 101.9% to ~~$80.8~~$208.8 million for the three months ended ~~September 30, 2020~~March 31, 2021 from ~~$104.8~~$103.4 million in the comparable period in ~~2019. Advisory fee revenues were negatively impacted by a decrease in industry-wide completed mergers and acquisitions transactions.~~

~~Capital raising revenues increased 46.1% to $137.3 million for~~2020. For the three months ended ~~September 30, 2020~~March 31, 2021, equity capital raising revenues increased 147.8% to $160.5 million from ~~$93.9~~$64.8 million in the comparable period in ~~2019. For the three months ended September 30, 2020, equity capital raising revenues increased 50.9% to $89.1 million from $59.0 million in the comparable period in 2019.~~2020. The increase in equity capital raising revenues is primarily attributable to an increase in deals compared to the prior year. For the three months ended ~~September 30, 2020,~~March 31, 2021, fixed income capital raising revenues increased ~~38.1%~~25.1% to ~~$48.2~~$48.3 million from ~~$34.9~~$38.6 million in the comparable period in ~~2019. Fixed income capital raising~~2020. The increase is primarily attributable to an increase in the municipal bond origination business, which has rebounded from the challenging market conditions in the first quarter of 2020. In addition, there has been an increase in our corporate debt issuance business.

Advisory fee revenues increased ~~from a year ago as clients accessed~~71.5% to $130.5 million for the ~~market to benefit from the lower rate environment.~~

~~For the nine~~three months ended ~~September 30, 2020, investment banking revenues increased 13.8% to $614.6 million~~March 31, 2021 from ~~$540.2~~$76.1 million in the comparable period in ~~2019.~~

~~Advisory fee revenues decreased 12.9%~~2020. The growth is primarily attributable to ~~$254.8 million for~~an increase in completed advisory transactions during the ~~nine months ended September 30, 2020 from $292.6 million in~~first quarter of 2021 compared with lower volumes during the comparable period in ~~2019. Advisory fee revenues were negatively impacted by~~2020 as a ~~decrease in industry-wide completed mergers and acquisitions transactions.~~

~~Capital raising revenues increased 45.3%~~result of the economic slow-down due to ~~$359.9 million for~~ the nine months ended September 30, 2020 from $247.6 million in the comparable period in 2019. For the nine months ended September 30, 2020, equity capital raising revenues increased 47.5% to $230.1 million from $156.0 million in the comparable period in 2019. For the nine months ended September 30, 2020, fixed income capital raising revenues increased 41.7% to $129.8 million from $91.6 million in the comparable period in 2019.pandemic.

Asset management and service fees – Asset management and service fee revenues are primarily generated by the investment advisory fees related to asset management services provided for individual and institutional investment portfolios, along with mutual funds. Investment advisory fees are earned on assets held in managed or non-discretionary asset-based programs. Fees from private client investment portfolios and institutional fees are typically based on asset values at the end of the prior period. Asset balances are impacted by both the performance of the market and levels of net new client assets. Rising markets have historically had a positive impact on investment advisory fee revenues as existing accounts increase in value, and individuals and institutions may commit incremental funds in rising markets.

For the three months ended ~~September 30, 2020,~~March 31, 2021, asset management and service fee revenues increased ~~6.0%~~17.0% to ~~$230.8~~a record $278.1 million from ~~$217.6~~$237.8 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, asset management and service fee revenues increased 7.0%~~2020. Please refer to ~~$667.5 million from $624.1 million in the comparable period in 2019. See~~ “Asset management and service fees” in the Global Wealth Management segment discussion for information on the changes in asset management and service fees revenues.

Other income – Other income primarily includes investment gains and losses, rental income, and loan originations fees. For the three months ended ~~September 30, 2020,~~March 31, 2021, other income increased ~~131.6%~~178.4% to ~~$20.3~~$25.6 million from ~~$8.7~~$9.2 million during the comparable period in ~~2019.~~2020. The increase is primarily attributable to improved investment gains over the comparable period in ~~2019~~2020 and an increase in loan origination fees. ~~For~~Other income for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 ~~other income increased 47.9% to $51.0 million from $34.5~~

~~million during the comparable period in 2019. The increase is primarily attributable to the~~included a gain recognized on the sale of Ziegler Capital Management, ~~LLC in the first quarter of 2020, partially offset by investment losses.~~LLC.

The following ~~tables present~~table presents average balance data and operating interest revenue and expense data, as well as related interest yields for the periods indicated (in thousands, except rates):

Three Months Ended

September 30, 2020

September 30, 2019

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

$
1,789,831

$
1,119

0.25
%

$
1,056,265

$
5,682

2.15
%
Financial instruments owned

801,349

2,924

1.46
%

1,157,797

5,668

1.96
%
Margin balances

872,466

5,803

2.66
%

1,308,259

13,334

4.08
%
Investment portfolio

6,221,840

31,966

2.06
%

6,403,691

54,945

3.43
%
Loans

10,997,589

76,281

2.77
%

9,325,120

95,436

4.09
%
Other interest-bearing assets

547,643

(3,682
)

(2.69
%)

678,717

3,719

2.19
%
Total interest-earning assets/interest income

$
21,230,718

$
114,411

2.16
%

$
19,929,849

$
178,784

3.59
%
Interest-bearing liabilities:

Short-term borrowings

$
—

$
—

0.00
%

$
20,991

$
138

2.63
%
Stock loan

95,255

(5,887
)

(24.72
%)

494,699

1,175

0.95
%
Senior notes (Stifel Financial)

1,411,761

15,411

4.37
%

1,016,580

11,121

4.38
%
Stifel Capital Trusts

60,000

322

2.15
%

60,000

645

4.30
%
Deposits

16,379,234

1,478

0.04
%

14,926,177

24,815

0.67
%
FHLB

157,098

515

1.31
%

270,092

1,146

1.70
%
Other interest-bearing liabilities

916,400

1,983

0.87
%

1,118,287

5,104

1.83
%
Total interest-bearing liabilities/interest expense

$
19,019,748

13,822

0.29
%

$
17,906,826

44,144

0.99
%
Net interest income/margin

$
100,589

1.90
%

$
134,640

2.70
%

	Nine Months Ended															Three Months Ended
	September 30, 2020								September 30, 2019							March 31, 2021								March 31, 2020
	Average Balance		Interest Income/ Expense			Average Interest Rate			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	$	1,466,579	$	5,815			0.53	%	$	986,935	$	17,837		2.41	%	$	1,812,196	$	891			0.20	%	$	931,765	$	3,678			1.58	%
Financial instruments owned		879,895		10,357			1.57	%		1,251,880		18,395		1.96	%		807,794		2,895			1.43	%		1,076,633		4,574			1.70	%
Margin balances		1,028,579		22,298			2.89	%		1,286,090		40,437		4.19	%		961,584		6,091			2.53	%		1,231,725		10,131			3.29	%
Investment portfolio		6,331,871		121,630			2.56	%		6,857,310		182,127		3.54	%		6,276,752		29,952			1.91	%		6,387,804		48,137			3.01	%
Loans		10,756,496		250,565			3.11	%		9,142,924		284,541		4.15	%		12,115,708		87,239			2.88	%		10,359,833		95,120			3.67	%
Other interest-bearing assets		543,931		(6,709	)		(1.64	%)		748,868		14,458		2.57	%		596,171		472			0.32	%		607,833		(463	)		(0.30	%)
Total interest-earning assets/interest income	$	21,007,351	$	403,956			2.56	%	$	20,274,007	$	557,795		3.67	%	$	22,570,205	$	127,540			2.26	%	$	20,595,593	$	161,177			3.13	%
Interest-bearing liabilities:
Short-term borrowings	$	34,238	$	281			1.09	%	$	39,667	$	902		3.03	%		3,763	$	—			0.00	%	$	91,269	$	200			0.88	%
Stock loan		248,262		(14,489	)		(7.78	%)		505,932		6,612		1.74	%		140,035		(1,403	)		(4.01	%)		424,553		(2,931	)		(2.76	%)
Senior notes (Stifel Financial)		1,208,707		39,677			4.38	%		1,016,309		33,365		4.38	%		1,112,498		12,103			4.35	%		1,017,099		11,193			4.40	%
Stifel Capital Trusts		60,000		1,289			2.86	%		60,000		1,985		4.41	%		60,000		304			2.03	%		60,000		559			3.73	%
Deposits		16,145,386		13,324			0.11	%		14,978,783		82,228		0.73	%		17,629,605		1,283			0.03	%		15,377,859		9,569			0.25	%
FHLB		332,175		3,550			1.43	%		426,535		5,735		1.79	%		15,778		11			0.29	%		590,549		2,353			1.59	%
Other interest-bearing liabilities		984,719		7,631			1.03	%		1,109,281		15,656		1.88	%		1,005,833		2,142			0.85	%		1,143,541		3,414			1.19	%
Total interest-bearing liabilities/interest expense	$	19,013,487		51,263			0.36	%	$	18,136,507		146,483		1.08	%	$	19,967,512		14,440			0.29	%	$	18,704,870		24,357			0.52	%
Net interest income/margin			$	352,693			2.24	%			$	411,312		2.71	%			$	113,100			2.00	%			$	136,820			2.66	%

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 three months ended ~~September 30, 2020,~~March 31, 2021, net interest income decreased to ~~$100.6~~$113.1 million from ~~$134.6~~$136.8 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, net interest income decreased to $352.7 million from $411.3 million during the comparable period in 2019.~~2020.

For the three months ended ~~September 30, 2020,~~March 31, 2021, interest revenue decreased ~~36.0%~~20.9% to ~~$114.4~~$127.5 million from ~~$178.8~~$161.2 million in the comparable period in ~~2019,~~2020, principally as a result of a decrease in interest revenue generated from interest-earning assets of Stifel Bancorp due to lower interest rates. The average interest-earning assets of Stifel Bancorp increased to ~~$18.0~~$19.4 billion during the three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$16.3~~$17.3 billion during the comparable period in ~~2019~~2020 at average interest rates of ~~2.41%~~2.43% and ~~3.77%, respectively.~~

For the nine months ended September 30, 2020, interest revenue decreased 27.6% to $404.0 million from $557.8 million in the comparable period in 2019, principally as a result of a decrease in interest revenue generated from interest-earning assets of Stifel Bancorp due to lower interest rates. The average interest-earning assets of Stifel Bancorp increased to $17.9 billion during the nine months ended September 30, 2020 compared to $16.6 billion during the comparable period in 2019 at average interest rates of 2.80% and 3.85%3.36%, respectively.

For the three months ended ~~September 30, 2020,~~March 31, 2021, interest expense decreased ~~68.7%~~40.7% to ~~$13.8~~$14.4 million from ~~$44.1~~$24.4 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, interest expense decreased 65.0% to $51.3 million from $146.5 million in the comparable period in 2019.~~2020. The decrease is primarily attributable to lower interest rates.

Decreases in short-term interest rates have had a negative impact on our results, in particular on our net interest income. ~~The Federal Reserve significantly further lowered interest rates in response to COVID-19 pandemic concerns.~~

The following table presents consolidated non-interest expenses for the periods indicated (in thousands, except percentages):

	Three Months Ended September 30,								Nine Months Ended September 30,							Three Months Ended March 31,
	2020			2019		% Change			2020		2019		% Change			2021			2020		% Change
Non-interest expenses:
Compensation and benefits	$	533,638		$	486,160		9.8		$	1,657,991	$	1,411,135		17.5		$	697,914		$	577,179		20.9
Occupancy and equipment rental		68,598			58,649		17.0			200,935		178,566		12.5			72,032			66,073		9.0
Communications and office supplies		40,123			36,817		9.0			124,293		107,583		15.5			41,825			41,124		1.7
Commissions and floor brokerage		13,254			10,542		25.7			43,273		32,506		33.1			15,703			14,842		5.8
Provision for credit losses		(1,353	)		929	n/m				33,925		5,565		509.6			(5,252	)		16,068		(132.7	)
Other operating expenses		70,647			77,721		(9.1	)		215,275		220,879		(2.5	)		84,675			82,642		2.5
Total non-interest expenses	$	724,907		$	670,818		8.1		$	2,275,692	$	1,956,234		16.3		$	906,897		$	797,928		13.7

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 employee-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 three months ended ~~September 30, 2020,~~March 31, 2021, compensation and benefits expense increased ~~9.8%~~20.9% to ~~$533.6~~$697.9 million from ~~$486.2~~$577.2 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, compensation and benefits expense increased 17.5% to $1.7 billion from $1.4 billion during the comparable period in 2019.~~2020. The increase in compensation and benefits expenses is primarily attributable to ~~higher revenue-related expense and investments in our franchise.~~revenue growth.

Compensation and benefits expense as a percentage of net revenues was ~~60.4% and 61.6%~~61.5% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 compared to ~~59.2% and 59.0%~~63.2% for the three ~~and nine~~ months ended ~~September 30, 2019, respectively.~~March 31, 2020.

Occupancy and equipment rental – For the three months ended ~~September 30, 2020,~~March 31, 2021, occupancy and equipment rental expense increased ~~17.0%~~9.0% to ~~$68.6~~$72.0 million from ~~$58.6~~$66.1 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, occupancy and equipment rental expense increased 12.5% to $200.9 million from $178.6 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher data processing costs associated with an increase in ~~data processing costs~~business activity and higher ~~rent expense~~occupancy costs as a result of an increase in locations.

Communications and office supplies – Communications expense includes costs for telecommunication and data communication, primarily for obtaining third-party market data information. For the three months ended ~~September 30, 2020,~~March 31, 2021, communications and office supplies expense increased ~~9.0%~~1.7% to ~~$40.1~~$41.8 million from ~~$36.8~~$41.1 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, communications and office supplies expense increased 15.5% to $124.3 million from $107.6 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher communication and quote equipment expenses ~~and shipping costs.~~associated with the continued growth of our business.

Commissions and floor brokerage – For the three months ended ~~September 30, 2020,~~March 31, 2021, commissions and floor brokerage expense increased ~~25.7%~~5.8% to ~~$13.3~~$15.7 million from ~~$10.5~~$14.8 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, commissions and floor brokerage expense increased 33.1% to $43.3 million from $32.5 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher volume-related expenses, including brokerage trading costs, reflecting an increase in ~~brokerage trading volumes.~~activity levels.

Provision for credit losses – For the three months ended ~~September 30, 2020,~~March 31, 2021, provision for credit losses decreased to a credit of ~~$1.4~~$5.3 million from ~~$0.9~~$16.1 million during the comparable period in ~~2019. For~~2020. The decrease is primarily attributable to the ~~nine months ended September 30, 2020, provision~~release of the allowance for credit losses increased 509.6% to $33.9 million from $5.6 million during the comparable period in 2019. Relatively modest loan growth and the stabilization of economic factors during the third quarter of 2020 coupled with an overlay resulted in an immaterial release of the provision for credit losses during the three months ended September 30, 2020. For the nine months ended September 30, 2020, the provision for credit losses was impacteddriven by ~~growth~~improvements in the outlook for macroeconomic conditions, partially offset by an increase in the allowance for loan ~~portfolio and the impact~~losses as a result of ~~accounting for credit losses under the CECL standard, which was heightened by the impact of COVID-19 on the broader economic environment.~~loan growth.

Other operating expenses – Other operating expenses primarily include license and registration fees, litigation-related expenses, which consist of amounts we reserve and/or pay out related to legal and regulatory matters, travel and entertainment, promotional expenses and expenses for professional services.

For the three months ended ~~September 30, 2020,~~March 31, 2021, other operating expenses ~~decreased 9.1%~~increased 2.5% to ~~$70.6~~$84.7 million from ~~$77.7~~$82.6 million during the comparable period in ~~2019.~~2020. The ~~decrease~~increase is primarily attributable to ~~decreases in travel costs and conference expenses, partially offset by increases in taxes and licenses, professional fees, and insurance expense and~~ higher investment banking gross-up costs, which is attributable to an increase in investment banking ~~revenues.~~

~~For the nine months ended September 30, 2020, other operating expenses decreased 2.5% to $215.3 million from $220.9 million during the comparable period~~revenues, increases in ~~2019. The decrease is primarily attributable to decreases in travel costs~~professional fees, and ~~conference expenses,~~insurance expense, partially offset by ~~increases in taxes~~lower travel, entertainment, and ~~licenses, professional fees, insurance expense,~~conference-related expenses, and ~~investment banking gross-up costs, which is attributable to an increase in investment banking revenues.~~lower provisions for litigation matters.

Provision for income taxes – For the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, our provision for income taxes was ~~$37.9 million and $101.5~~$54.9 million, representing an effective tax rate of ~~23.9% and 24.4%~~24.1%, ~~respectively,~~ compared to ~~$40.6 million and $117.2~~$28.5 million for the comparable ~~periods~~period in ~~2019,~~2020, representing an effective tax rate of ~~27.1% and 27.0%, respectively.~~24.8%.

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, Inc.~~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 our bank subsidiaries, which provide residential, consumer, and commercial lending, as well as Federal Depository Insurance Corporation (“FDIC”)-insured deposit accounts to customers of our broker-dealer subsidiaries and to the general public.

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,~~Private Client Group, which are included in the Global Wealth Management segment), merger and acquisition, and financial advisory services.

We evaluate the performance of our segments and allocate resources to them based on various factors, including prospects for growth, return on investment, and return on revenues.

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared with Three Months Ended ~~September 30, 2019~~March 31, 2020

The following table presents consolidated financial information for the Global Wealth Management segment for the periods indicated (in thousands, except percentages):

	Three Months Ended September 30,								As a Percentage of Net Revenues For the Three Months Ended September 30,						Three Months Ended March 31,								As a Percentage of Net Revenues For the Three Months Ended March 31,
	2020			2019		% Change			2020			2019			2021			2020		% Change			2021			2020
Revenues:
Commissions	$	120,600		$	118,061		2.2			22.9	%		22.1	%	$	147,505		$	136,897		7.7			23.4	%		23.5	%
Principal transactions		42,027			42,056		(0.1	)		8.0			7.9			53,599			42,982		24.7			8.5			7.4
Brokerage revenues		162,627			160,117		1.6			30.9			30.0			201,104			179,879		11.8			31.9			30.9
Asset management and service fees		230,765			217,616		6.0			43.8			40.7			278,109			237,760		17.0			44.0			40.8
Investment banking		8,113			9,855		(17.7	)		1.5			1.8			13,549			10,333		31.1			2.1			1.8
Interest		114,871			168,902		(32.0	)		21.8			31.6			124,375			156,150		(20.3	)		19.7			26.8
Other income		17,150			9,046		89.6			3.3			1.7			20,958			16,302		28.6			3.3			2.7
Total revenues		533,526			565,536		(5.7	)		101.3			105.8			638,095			600,424		6.3			101.0			103.0
Interest expense		6,690			30,965		(78.4	)		1.3			5.8			6,600			17,468		(62.2	)		1.0			3.0
Net revenues		526,836			534,571		(1.4	)		100.0			100.0			631,495			582,956		8.3			100.0			100.0
Non-interest expenses:
Compensation and benefits		277,903			261,681		6.2			52.7			49.0			336,721			298,370		12.9			53.3			51.2
Occupancy and equipment rental		29,791			29,382		1.4			5.7			5.5			34,077			30,252		12.6			5.4			5.2
Communication and office supplies		13,706			14,084		(2.7	)		2.6			2.6			14,402			15,320		(6.0	)		2.3			2.6
Commissions and floor brokerage		5,742			5,049		13.7			1.1			0.9			6,462			5,250		23.1			1.0			0.9
Provision for credit losses		(1,353	)		929	n/m				(0.3	)		0.2			(5,252	)		16,068		(132.7	)		(0.8	)		2.8
Other operating expenses		22,117			20,623		7.2			4.2			3.9			21,854			23,529		(7.1	)		3.5			4.0
Total non-interest expenses		347,906			331,748		4.9			66.0			62.1			408,264			388,789		5.0			64.7			66.7
Income before income taxes	$	178,930		$	202,823		(11.8	)		34.0	%		37.9	%	$	223,231		$	194,167		15.0			35.3	%		33.3	%

~~Nine months ended September 30, 2020 Compared with Nine months ended September 30, 2019~~

~~The following table presents consolidated financial information for the Global Wealth Management segment for the periods indicated~~ ~~(in thousands, except percentages)~~:

Nine Months Ended September 30,

As a Percentage of Net Revenues For the Nine Months Ended September 30,

2020

2019

%
Change

2020

2019

Revenues:

Commissions

$
373,653

$
348,272

7.3

23.1
%

22.1
%
Principal transactions

127,976

127,427

0.4

7.9

8.1

Brokerage revenues

501,629

475,699

5.5

31.0

30.2

Asset management and service fees

667,446

624,025

7.0

41.3

39.6

Investment banking

26,462

28,637

(7.6
)

1.6

1.8

Interest

400,092

523,686

(23.6
)

24.8

33.2

Other income

51,610

28,422

81.6

3.3

1.7

Total revenues

1,647,239

1,680,469

(2.0
)

102.0

106.5

Interest expense

31,665

102,855

(69.2
)

2.0

6.5

Net revenues

1,615,574

1,577,614

2.4

100.0

100.0

Non-interest expenses:

Compensation and benefits

834,564

771,475

8.2

51.7

48.9

Occupancy and equipment rental

90,237

89,620

0.7

5.6

5.7

Communication and office supplies

44,059

42,824

2.9

2.7

2.7

Commissions and floor brokerage

16,828

15,095

11.5

1.0

1.0

Provision for credit losses

33,925

5,565

509.6

2.1

0.4

Other operating expenses

66,539

63,370

5.0

4.1

3.9

Total non-interest expenses

1,086,152

987,949

9.9

67.2

62.6

Income before income taxes

$
529,422

$
589,665

(10.2
)

32.8
%

37.4
%

	March 31,
	2021		2020
Branch offices		389		384
Financial advisors		2,182		2,130
Independent contractors		92		94
Total financial advisors		2,274		2,224

For the three months ended ~~September 30, 2020,~~March 31, 2021, Global Wealth Management net revenues ~~decreased 1.4%~~increased 8.3% to ~~$526.8~~a record $631.5 million from ~~$534.6~~$583.0 million for the comparable period in 2019. The decrease in net revenues over the comparable period in 2019 is primarily attributable to decreases in net interest income and investment banking, partially offset by increases in other income, asset management and service fee revenues, and commission revenues.

~~For the nine months ended September 30, 2020, Global Wealth Management net revenues increased 2.4% to $1.62 billion from $1.58 billion for the comparable period in 2019.~~2020. The increase in net revenues over the comparable period in ~~2019~~2020 is primarily attributable to ~~the growth~~increases in asset management and service fee revenues and ~~higher~~ brokerage revenues, ~~and other income,~~ partially offset by a decrease in net interest ~~income and investment banking.~~income.

Commissions – For the three months ended ~~September 30, 2020,~~March 31, 2021, commission revenues increased ~~2.2%~~7.7% to ~~$120.6~~$147.5 million from ~~$118.1~~$136.9 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, commission revenues increased 7.3%~~2020. The increase is primarily attributable to ~~$373.7 million from $348.3 million~~an increase in equities trading over the comparable period in ~~2019.~~2020.

Principal transactions – For the three months ended ~~September 30, 2020,~~March 31, 2021, principal transactions revenues ~~decreased 0.1%~~increased 24.7% to ~~$42.0~~$53.6 million from ~~$42.1~~$43.0 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, principal transactions revenues increased 0.4%~~2020. The increase is primarily attributable to ~~$128.0 million from $127.4 million in the comparable period in 2019.~~strong client engagement and market volatility.

Brokerage revenues - For the three months ended ~~September 30, 2020,~~March 31, 2021, brokerage revenues increased ~~1.6%~~11.8% to ~~$162.6~~$201.1 million from ~~$160.1~~$179.9 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, brokerage revenues increased 5.5%~~2020. The increase is primarily attributable to ~~$501.6 million from $475.7 million in~~higher trading volumes over the comparable period in ~~2019.~~2020, driven by market volatility.

Asset management and service fees – For the three months ended ~~September 30, 2020,~~March 31, 2021, asset management and service fees increased ~~6.0%~~17.0% to ~~$230.8~~$278.1 million from ~~$217.6~~$237.8 million in the comparable period in ~~2019.~~2020. The increase ~~from the comparative period in 2019~~ is primarily attributable to higher asset values and strong fee-based asset flows.

~~For the nine months ended September 30, 2020,~~ Fee-based account revenues are primarily billed based on asset ~~management and service fees increased 7.0% to $667.4 million from $624.0 million in the comparable period in 2019. The increase is primarily due to higher asset levels and strong fee-based asset flows~~values at the end ~~of fiscal 2019 and our continued expansion in~~ the ~~asset management business.~~prior quarter.

Client asset metrics as of the periods indicated (in thousands, except number of accounts and percentages):

	9/30/20		9/30/19		% Change		6/30/20		% Change		3/31/21		3/31/20		% Change		12/31/20		% Change
Client assets	$	325,159,000	$	311,819,000		4.3	$	306,235,000		6.2	$	378,615,000	$	276,627,000		36.9	$	357,429,000		5.9
Fee-based client assets	$	115,162,000	$	108,138,000		6.5	$	106,218,000		8.4	$	137,804,000	$	93,633,000		47.2	$	129,372,000		6.5
Number of client accounts		1,059,000		1,009,000		5.0		1,038,000		2.0		1,088,000		1,031,000		5.5		1,075,000		1.2
Number of fee-based client accounts		252,000		223,000		13.0		241,000		4.6		273,000		237,000		15.2		262,000		4.2

The increase in the value of our client assets and fee-based ~~client~~ assets ~~at September 30, 2020 continued~~was primarily attributable to ~~rebound from~~ the ~~lows experienced at~~rise in the ~~end of the first quarter of 2020 when macroeconomic concerns~~markets, as well as asset growth resulting from ~~the challenging operating environment lead to decreased global equity prices, wider credit spreads, and uncertainty in the economic outlook drove asset values down.~~strong recruiting efforts.

Investment banking – Investment banking, which represents sales credits for investment banking underwritings, ~~decreased 17.7%~~increased 31.1% to ~~$8.1~~$13.5 million for the three months ended ~~September 30, 2020~~March 31, 2021 from ~~$9.9~~$10.3 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, investment banking revenues decreased 7.6% to $26.5 million from $28.6 million during the comparable period in 2019.~~2020. See “Investment banking” in the Institutional Group segment discussion for information on the changes in net revenues.

Interest revenue – For the three months ended ~~September 30, 2020,~~March 31, 2021, interest revenue decreased ~~32.0%~~20.3% to ~~$114.9~~$124.4 million from ~~$168.9~~$156.2 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, interest revenue decreased 23.6% to $400.1 million from $523.7 million during the comparable period in 2019.~~2020. The decrease is primarily ~~due~~driven by the impact of lower interest rates. ~~See~~Please refer to “Net Interest Income – Stifel Bancorp” below for a further discussion of the changes in net interest revenues.

Other income – For the three months ended ~~September 30, 2020,~~March 31, 2021, other income increased ~~89.6%~~28.6% to ~~$17.2~~$21.0 million from ~~$9.0~~$16.3 million in the comparable period in ~~2019.~~2020. The increase is primarily attributable to improved investment ~~gains. For the nine months ended September 30, 2020, other income increased 81.6% to $51.6 million from $28.4 million during the comparable period~~gains and an increase in ~~2019. The increase is primarily attributable to the gain recognized on the sale of Ziegler Capital Management, LLC in the first quarter of 2020, partially offset by investment losses.~~loan origination fees.

Interest expense – For the three months ended ~~September 30, 2020,~~March 31, 2021, interest expense decreased ~~78.4%~~62.2% to ~~$6.7~~$6.6 million from ~~$31.0~~$17.5 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, interest expense decreased 69.2% to $31.7 million from $102.9 million during the comparable period in 2019.~~2020. The decrease in interest expense is primarily attributable to lower interest rates over the comparable period in ~~2019.~~2020.

The following tables present average balance data and operating interest revenue and expense data for Stifel Bancorp, as well as related interest yields for the periods indicated (in thousands, except rates):

	Three Months Ended September 30, 2020							Three Months Ended September 30, 2019							Three Months Ended March 31, 2021							Three Months Ended March 31, 2020
	Average Balance		Interest Income/ Expense		Average Interest Rate			Average Balance		Interest Income/ Expense		Average Interest Rate			Average Balance		Interest Income/ Expense		Average Interest Rate			Average Balance		Interest Income/ Expense		Average Interest Rate
Assets:
Interest-bearing cash and federal funds sold	$	785,969	$	275		0.14	%	$	540,767	$	3,194		2.36	%	$	962,258	$	291		0.12	%	$	445,987	$	1,225		1.10	%
U.S. government agencies		4,862		25		2.07			4,546		68		5.98			4,002		21		2.10			3,863		21		2.17
State and municipal securities (tax-exempt) ⁽¹⁾		2,405		12		1.97			34,306		195		2.27			2,393		12		1.97			18,424		98		2.13
Mortgage-backed securities		824,040		3,185		1.55			1,253,362		6,584		2.10			905,906		3,266		1.44			1,094,197		5,964		2.18
Corporate fixed income securities		551,785		3,453		2.50			743,704		5,696		3.06			639,813		5,398		3.37			732,826		5,050		2.76
Asset-backed securities		4,838,748		25,291		2.09			4,367,773		42,402		3.88			4,724,638		21,255		1.80			4,538,494		37,004		3.26
Federal Home Loan Bank ("FHLB") and other capital stock		42,927		306		2.86			46,706		355		3.04
Federal Home Loan Bank and other capital stock																40,730		227		2.23			59,649		599		4.02
Loans ⁽²⁾
Securities-based loans		1,787,092		9,168		2.05			1,959,281		19,870		4.06			2,002,319		9,733		1.94			2,063,781		16,463		3.19
Commercial and industrial		4,036,326		30,101		2.98			3,330,231		39,700		4.77			4,573,558		39,500		3.45			3,560,337		37,976		4.27
Residential real estate		3,711,243		26,103		2.81			3,003,776		23,163		3.08			3,994,511		27,038		2.71			3,416,067		25,307		2.96
Commercial real estate		399,986		3,762		3.76			377,157		5,206		5.52			371,029		3,258		3.51			445,025		5,806		5.22
Home equity lines of credit		66,664		475		2.85			51,330		614		4.78			74,855		505		2.70			54,340		588		4.33
Construction and land		496,729		3,850		3.10			258,307		3,446		5.34			526,882		4,189		3.18			416,455		4,716		4.53
Other		39,442		232		2.35			135,301		1,756		5.19			38,171		219		2.30			29,289		275		3.75
Loans held for sale		460,107		2,590		2.25			209,737		1,681		3.21			534,383		2,797		2.09			374,539		3,989		4.26
Total interest-earning assets ⁽³⁾	$	18,048,325	$	108,828		2.41	%	$	16,316,284	$	153,930		3.77	%	$	19,395,448	$	117,709		2.43	%	$	17,253,273	$	145,081		3.36	%
Cash and due from banks		18,289							49,493							19,442							15,573
Other non interest-earning assets		273,792							366,596							439,722							292,103
Total assets	$	18,340,406						$	16,732,373						$	19,854,612						$	17,560,949
Liabilities and stockholder's equity:
Deposits:
Money market	$	15,636,513	$	599		0.02	%	$	12,773,765	$	12,713		0.40	%	$	16,897,826	$	743		0.02	%	$	13,729,080	$	3,429		0.10	%
Time deposits		137,633		720		2.09			1,074,433		6,792		2.53			93,447		444		1.90			449,862		2,637		2.35
Demand deposits		566,898		122		0.09			578,067		2,212		1.53			637,544		96		0.06			1,148,628		3,325		1.16
Savings		38,190		37		0.39			499,912		3,098		2.48			788		—		0.05			50,289		178		1.41
FHLB advances		157,098		515		1.31			270,092		1,146		1.70
Federal Home Loan Bank advances																15,778		11		0.29			590,549		2,353		1.59
Other borrowings		1,490		23		6.08			1,663		27		6.49			1,400		28		7.92			1,578		28		7.09
Total interest-bearing liabilities ⁽³⁾		16,537,822		2,016		0.05	%		15,197,932		25,988		0.68	%		17,646,783		1,322		0.03	%		15,969,986		11,950		0.30	%
Non-interest-bearing liabilities		272,328							123,924							510,437							206,365
Other non-interest bearing liabilities		121,322							83,133							260,957							103,987
Total liabilities		16,931,472							15,404,989							18,418,177							16,280,338
Stockholder's equity		1,408,934							1,327,384							1,436,435							1,280,611
Total liabilities and stockholder's equity	$	18,340,406						$	16,732,373						$	19,854,612						$	17,560,949
Net interest income/spread			$	106,812		2.36	%			$	127,942		3.09	%			$	116,387		2.40	%			$	133,131		3.06	%
Net interest margin						2.37	%						3.14	%						2.40	%						3.09	%

~~The following tables present average balance data and operating interest revenue and expense data for Stifel Bancorp, as well as related interest yields for the periods indicated~~ ~~(in thousands, except rates)~~:

Nine Months Ended September 30, 2020

Nine Months Ended September 30, 2019

Average Balance

Interest Income/ Expense

Average Interest Rate

Average Balance

Interest Income/ Expense

Average Interest Rate

Assets:

Interest-bearing cash and federal funds sold

$
734,239

$
1,804

0.33
%

$
532,074

$
9,525

2.39
%
U.S. government agencies

5,181

73

1.88

3,161

68

2.87

State and municipal securities (tax-exempt) ⁽¹⁾

10,988

177

2.14

44,104

716

2.16

Mortgage-backed securities

931,403

13,731

1.97

1,416,057

24,170

2.28

Corporate fixed income securities

644,187

12,705

2.63

870,183

19,771

3.03

Asset-backed securities

4,740,112

94,944

2.67

4,523,805

137,402

4.05

Federal Home Loan Bank ("FHLB") and other capital stock

49,718

1,192

3.20

52,328

2,085

5.31

Loans ⁽²⁾

Securities-based loans

1,879,672

35,571

2.52

1,892,268

59,154

4.17

Commercial and industrial

3,897,859

99,863

3.42

3,361,206

121,833

4.83

Residential real estate

3,572,673

77,001

2.87

2,959,501

68,176

3.07

Commercial real estate

415,808

13,570

4.35

356,161

14,900

5.58

Home equity lines of credit

60,207

1,471

3.26

46,732

1,725

4.92

Construction and land

454,119

12,514

3.67

203,386

8,329

5.46

Other

35,623

741

2.77

130,939

5,121

5.21

Loans held for sale

440,535

9,834

2.98

192,731

5,303

3.67

Total interest-earning assets ⁽³⁾

$
17,872,324

$
375,191

2.80
%

$
16,584,636

$
478,278

3.85
%
Cash and due from banks

15,317

46,521

Other non interest-earning assets

273,642

395,158

Total assets

$
18,161,283

$
17,026,315

Liabilities and stockholder's equity:

Deposits:

Money market

$
15,069,691

$
4,940

0.04
%

$
12,722,788

$
44,627

0.47
%
Time deposits

261,729

4,472

2.28

1,336,471

24,174

2.41

Demand deposits

764,695

3,629

0.63

636,131

8,120

1.70

Savings

49,271

283

0.76

283,393

5,307

2.50

FHLB advances

332,175

3,550

1.43

426,535

5,735

1.79

Other borrowings

1,519

76

6.60

1,691

95

7.49

Total interest-bearing liabilities ⁽³⁾

16,479,080

16,950

0.14
%

15,407,009

88,058

0.76
%
Non-interest-bearing liabilities

246,046

135,336

Other non-interest bearing liabilities

107,658

167,746

Total liabilities

16,832,784

15,710,091

Stockholder's equity

1,328,499

1,316,224

Total liabilities and stockholder's equity

$
18,161,283

$
17,026,315

Net interest income/spread

$
358,241

2.66
%

$
390,220

3.09
%
Net interest margin

2.67
%

3.14
%

The following table sets forth an analysis of the effect on net interest income of volume and rate changes for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2020~~March 31, 2021 compared to the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2019~~ March 31, 2020 (in thousands):

	Three Months Ended September 30, 2020 Compared to Three Months Ended September 30, 2019									Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019									Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020
	Increase/(decrease) due to:									Increase/(decrease) due to:									Increase/(decrease) due to:
	Volume			Rate			Total			Volume			Rate			Total			Volume			Rate			Total
Interest income:
Interest-bearing cash and federal funds sold	$	15,483		$	(18,402	)	$	(2,919	)	$	4,339		$	(12,060	)	$	(7,721	)	$	10,892		$	(11,826	)	$	(934	)
U.S. government agencies		30			(73	)		(43	)		10			(5	)		5			3			(3	)		—
State and municipal securities (tax-exempt) ⁽¹⁾		(160	)		(23	)		(183	)		(527	)		(12	)		(539	)		(80	)		(6	)		(86	)
Mortgage-backed securities		(1,919	)		(1,480	)		(3,399	)		(7,466	)		(2,973	)		(10,439	)		(909	)		(1,789	)		(2,698	)
Corporate fixed income securities		(1,312	)		(931	)		(2,243	)		(4,685	)		(2,381	)		(7,066	)		(453	)		801			348
Asset-backed securities		5,215			(22,326	)		(17,111	)		6,935			(49,393	)		(42,458	)		1,586			(17,335	)		(15,749	)
FHLB and other capital stock		(28	)		(21	)		(49	)		(100	)		(793	)		(893	)
Federal Home Loan Bank and other capital stock																				(155	)		(217	)		(372	)
Loans
Securities-based loans		(1,616	)		(9,086	)		(10,702	)		(391	)		(23,192	)		(23,583	)		(476	)		(6,254	)		(6,730	)
Commercial and industrial		12,532			(22,131	)		(9,599	)		26,271			(48,241	)		(21,970	)		4,600			(3,076	)		1,524
Residential real estate		4,690			(1,750	)		2,940			12,806			(3,981	)		8,825			3,530			(1,799	)		1,731
Commercial real estate		339			(1,783	)		(1,444	)		4,248			(5,578	)		(1,330	)		(859	)		(1,689	)		(2,548	)
Home equity lines of credit		393			(532	)		(139	)		1,467			(1,721	)		(254	)		28,824			(28,907	)		(83	)
Construction and land		740			(336	)		404			5,696			(1,511	)		4,185			4,267			(4,794	)		(527	)
Other		(860	)		(664	)		(1,524	)		(2,666	)		(1,714	)		(4,380	)		198			(254	)		(56	)
Loans held for sale		1,211			(302	)		909			6,278			(1,747	)		4,531			6,218			(7,410	)		(1,192	)
	$	34,738		$	(79,840	)	$	(45,102	)	$	52,215		$	(155,302	)	$	(103,087	)	$	57,186		$	(84,558	)	$	(27,372	)
Interest expense:
Deposits:
Money market	$	3,681		$	(15,795	)	$	(12,114	)	$	10,138		$	(49,825	)	$	(39,687	)	$	1,044		$	(3,730	)	$	(2,686	)
Time deposits		(5,068	)		(1,004	)		(6,072	)		(18,431	)		(1,271	)		(19,702	)		(1,770	)		(423	)		(2,193	)
Demand deposits		(42	)		(2,048	)		(2,090	)		2,129			(6,620	)		(4,491	)		(1,031	)		(2,198	)		(3,229	)
Savings		(1,599	)		(1,462	)		(3,061	)		(2,730	)		(2,294	)		(5,024	)		(90	)		(88	)		(178	)
FHLB advances		(409	)		(222	)		(631	)		(1,134	)		(1,051	)		(2,185	)
Federal Home Loan Bank advances																				(1,271	)		(1,071	)		(2,342	)
Other borrowings		(3	)		(1	)		(4	)		(9	)		(10	)		(19	)		(9	)		9			—
	$	(3,440	)	$	(20,532	)	$	(23,972	)	$	(10,037	)	$	(61,071	)	$	(71,108	)	$	(3,127	)	$	(7,501	)	$	(10,628	)

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.

For the three months ended ~~September 30, 2020,~~March 31, 2021, interest revenue of ~~$108.8~~$117.7 million was generated from average interest-earning assets of ~~$18.0~~$19.4 billion at an average interest rate of ~~2.41%~~2.43%. Interest revenue of ~~$153.9~~$145.1 million for the comparable period in ~~2019~~2020 was generated from average interest-earning assets of ~~$16.3~~$17.3 billion at an average interest rate of ~~3.77%.~~

For the nine months ended September 30, 2020, interest revenue of $375.2 million was generated from average interest-earning assets of $17.9 billion at an average interest rate of 2.80%. Interest revenue of $478.3 million for the comparable period in 2019 was generated from average interest-earning assets of $16.6 billion at an average interest rate of 3.85%3.36%.

Interest expense represents interest on customer money market accounts, interest on time deposits, Federal Home Loan Bank advances, and other interest expense. For the three months ended ~~September 30, 2020,~~March 31, 2021, interest expense of ~~$2.0~~$1.3 million was incurred from average interest-bearing liabilities of ~~$16.5~~$17.6 billion at an average interest rate of ~~0.05%~~0.03%. Interest expense of ~~$26.0~~$12.0 million for the comparable period in ~~2019~~2020 was incurred from average interest-bearing liabilities of ~~$15.2~~$16.0 billion at an average interest rate of ~~0.68%~~0.30%.

For the nine months ended September 30, 2020, interest expense of $17.0 million was incurred from average interest-bearing liabilities of $16.5 billion at an average interest rate of 0.14%. Interest expense of $88.1 million for the comparable period in 2019 was incurred from average interest-bearing liabilities of $15.4 billion at an average interest rate of 0.76%.

~~Decreases in short-term interest rates have had a negative impact on our results, in particular on our net interest income. The Federal Reserve significantly further lowered interest rates in response~~Please refer to ~~COVID-19 pandemic concerns.~~

~~See~~ “Net Interest Income – Stifel Bancorp” above for more information regarding average balances, interest income and expense, and average interest rate yields.

For the three months ended ~~September 30, 2020,~~March 31, 2021, Global Wealth Management non-interest expenses increased ~~4.9%~~5.0% to ~~$347.9~~$408.3 million from ~~$331.7~~$388.8 million for the comparable period in ~~2019. For the nine months ended September 30, 2020, Global Wealth Management non-interest expenses increased 9.9% to $1.1 billion from $987.9 million for the comparable period in 2019.~~2020.

Compensation and benefits – For the three months ended ~~September 30, 2020,~~March 31, 2021, compensation and benefits expense increased ~~6.2%~~12.9% to ~~$277.9~~$336.7 million from ~~$261.7~~$298.4 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, compensation and benefits expense increased 8.2% to $834.6 million from $771.5 million during the comparable period in 2019.~~2020. The increase over the comparable period in ~~2019~~2020 is principally due to increased variable ~~compensation.~~compensation as a result of strong revenue growth. Compensation and benefits expense as a percentage of net revenues was ~~52.7% and 51.7%~~53.3% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~49.0% and 48.9%~~51.2% for the comparable ~~periods~~period in ~~2019, respectively.~~2020.

Occupancy and equipment rental – For the three months ended ~~September 30, 2020,~~March 31, 2021, occupancy and equipment rental expense increased ~~1.4%~~12.6% to ~~$29.8~~$34.1 million from ~~$29.4~~$30.3 million during the comparable period in ~~2019.~~2020. The increase is primarily attributable to ~~increases in rent expense and~~higher data processing ~~costs. For the nine months ended September 30, 2020,~~costs associated with an increase in business activity and higher occupancy ~~and equipment rental expense increased 0.7% to $90.2 million from $89.6 million during the comparable period~~costs as a result of an increase in ~~2019.~~locations.

Communications and office supplies – For the three months ended ~~September 30, 2020,~~March 31, 2021, communications and office supplies expense decreased ~~2.7%~~6.0% to ~~$13.7~~$14.4 million from ~~$14.1~~$15.3 million during the comparable period in ~~2019.~~2020. The decrease is primarily attributable to a decrease in shipping costs, partially offset by higher communication and quote expenses. For the nine months ended September 30, 2020, communications and office supplies expense increased 2.9% to $44.1 million from $42.8 million during the comparable period in 2019. The increase is primarily attributable to higher shipping costs and communication and quote equipment expenses.lower telecommunication costs.

Commissions and floor brokerage – For the three months ended ~~September 30, 2020,~~March 31, 2021, commissions and floor brokerage expense increased ~~13.7%~~23.1% to ~~$5.7~~$6.5 million from ~~$5.0~~$5.3 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, commissions and floor brokerage expense increased 11.5% to $16.8 million from $15.1 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher volume-related expenses, including brokerage trading ~~and clearing expenses.~~costs, reflecting an increase in activity levels.

Other operating expenses – For the three months ended ~~September 30, 2020,~~March 31, 2021, other operating expenses ~~increased 7.2%~~decreased 7.1% to ~~$22.1~~$21.9 million from ~~$20.6~~$23.5 million during the comparable period in ~~2019.~~2020. The ~~increase~~decrease is primarily attributable to ~~increases~~a decrease in settlement costs, ~~insurance expense, advertising,~~as well as lower travel, entertainment, and ~~professional fees,~~conference-related expenses. These decreases were partially offset by lower travel and conference expenses. For the nine months ended September 30, 2020, other operating expenses increased 5.0% to $66.5 million from $63.4 million during the comparable period in 2019. The increase is primarily attributable to increases in settlement costs, insurance expense, andhigher professional fees ~~partially offset by lower travel~~ and ~~conference expenses.~~insurance costs.

For the three months ended ~~September 30, 2020,~~March 31, 2021, income before income taxes ~~decreased 11.8%~~increased 15.0% to ~~$178.9~~$223.2 million from ~~$202.8~~$194.2 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, income before income taxes decreased 10.2% to $529.4 million from $589.7 million during the comparable period in 2019.~~2020.

For the three months ended ~~September 30, 2020,~~March 31, 2021, profit margins (income before income taxes as a percent of net revenues) have ~~decreased~~increased to ~~34.0%~~35.3% from ~~37.9%~~33.3% during the comparable period in ~~2019. For the nine months ended September 30, 2020, profit margins decreased to 32.8% from 37.4% during the comparable period in 2019.~~2020.

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared with Three Months Ended ~~September 30, 2019~~March 31, 2020

The following table presents consolidated financial information for the Institutional Group segment for the periods indicated (in thousands, except percentages):

	Three Months Ended September 30,								As a Percentage of Net Revenues For the Three Months Ended September 30,						Three Months Ended March 31,								As a Percentage of Net Revenues For the Three Months Ended March 31,
	2020		2019			% Change			2020			2019			2021		2020			% Change			2021			2020
Revenues:
Commissions	$	52,054	$	45,859			13.5			14.3	%		15.8	%	$	66,109	$	74,198			(10.9	)		13.1	%		22.3	%
Principal transactions		98,856		55,791			77.2			27.2			19.2			111,407		95,685			16.4			22.0			28.8
Brokerage revenues		150,910		101,650			48.5			41.5			35.0			177,516		169,883			4.5			35.1			51.1
Capital raising																195,257		93,082			109.8			38.6			28.0
Advisory fees		80,842		104,847			(22.9	)		22.2			36.1			130,482		76,053			71.6			25.8			22.9
Capital raising		129,179		84,088			53.6			35.6			29.0
Investment banking		210,021		188,935			11.2			57.8			65.1			325,739		169,135			92.6			64.4			50.9
Interest		3,351		5,938			(43.6	)		0.9			2.0			3,815		5,013			(23.9	)		0.8			1.5
Other income		1,765		(407	)	n/m				0.5			(0.1	)		1,851		(7,470	)	n/m				0.3			(2.2	)
Total revenues		366,047		296,116			23.6			100.7			102.0			508,921		336,561			51.2			100.6			101.3
Interest expense		2,682		5,894			(54.5	)		0.7			2.0			2,840		4,323			(34.3	)		0.6			1.3
Net revenues		363,365		290,222			25.2			100.0			100.0			506,081		332,238			52.3			100.0			100.0
Non-interest expenses:
Compensation and benefits		210,754		171,534			22.9			58.0			59.1			301,624		205,988			46.4			59.6			62.0
Occupancy and equipment rental		17,803		12,427			43.3			4.9			4.3			16,846		16,690			0.9			3.3			5.0
Communication and office supplies		21,800		19,053			14.4			6.0			6.6			22,985		21,304			7.9			4.5			6.4
Commissions and floor brokerage		7,512		5,503			36.5			2.1			1.9			9,242		9,592			(3.6	)		1.8			2.9
Other operating expenses		28,655		33,082			(13.4	)		7.9			11.3			38,196		36,924			3.4			7.6			11.1
Total non-interest expenses		286,524		241,599			18.6			78.9			83.2			388,893		290,498			33.9			76.8			87.4
Income before income taxes	$	76,841	$	48,623			58.0			21.1	%		16.8	%	$	117,188	$	41,740			180.8			23.2	%		12.6	%

~~Nine months ended September 30, 2020 Compared with Nine months ended September 30, 2019~~

~~The following table presents consolidated financial information for the Institutional Group segment for the periods indicated~~ ~~(in thousands, except percentages)~~:

Nine Months Ended September 30,

As a Percentage of Net Revenues For the Nine Months Ended September 30,

2020

2019

%
Change

2020

2019

Revenues:

Commissions

$
187,127

$
136,078

37.5

17.1
%

16.6
%
Principal transactions

317,590

170,916

85.8

29.0

20.8

Brokerage revenues

504,717

306,994

64.4

46.1

37.4

Advisory fees

254,733

292,647

(13.0
)

23.3

35.6

Capital raising

333,442

218,963

52.3

30.5

26.6

Investment banking

588,175

511,610

15.0

53.8

62.2

Interest

11,903

18,171

(34.5
)

1.1

2.2

Other income

(1,640
)

3,888

(142.2
)

(0.1
)

0.5

Total revenues

1,103,155

840,663

31.2

100.9

102.3

Interest expense

9,456

18,553

(49.0
)

0.9

2.3

Net revenues

1,093,699

822,110

33.0

100.0

100.0

Non-interest expenses:

Compensation and benefits

658,162

486,724

35.2

60.2

59.2

Occupancy and equipment rental

50,501

38,287

31.9

4.6

4.7

Communication and office supplies

66,105

53,802

22.9

6.0

6.5

Commissions and floor brokerage

26,445

17,420

51.8

2.4

2.1

Other operating expenses

90,856

105,748

(14.1
)

8.4

12.9

Total non-interest expenses

892,069

701,981

27.1

81.6

85.4

Income before income taxes

$
201,630

$
120,129

67.8

18.4
%

14.6
%

For the three months ended ~~September 30, 2020,~~March 31, 2021, Institutional Group net revenues increased ~~25.2%~~52.3% to ~~$363.4~~a record $506.1 million from ~~$290.2~~$332.2 million for the comparable period in ~~2019.~~2020. The increase in net revenues was primarily attributable to an increase in ~~brokerage~~investment banking revenues and ~~capital raising~~principal transaction revenues, partially offset by a decrease in ~~advisory fees.~~

~~For the nine months ended September 30, 2020, Institutional Group net revenues increased 33.0%~~commission revenues. The segment’s performance continues to ~~$1.1 billion~~benefit from ~~$822.1 million during the comparable period~~strong market activity, recent investments in ~~2019. The increase in net revenues was primarily attributable to an increase in brokerage revenues~~our business, and ~~capital raising revenues, partially offset by a decrease in advisory fees~~contributions from Canada and ~~other income.~~Europe.

Commissions – For the three months ended ~~September 30, 2020,~~March 31, 2021, commission revenues ~~increased 13.5%~~decreased 10.9% to ~~$52.1~~$66.1 million from ~~$45.9~~$74.2 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, commission revenues increased 37.5% to $187.1 million from $136.1 million in the comparable period in 2019.~~2020.

Principal transactions – For the three months ended ~~September 30, 2020,~~March 31, 2021, principal transactions revenues increased ~~77.2%~~16.4% to ~~$98.9~~$111.4 million from ~~$55.8~~$95.7 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, principal transaction revenues increased 85.8%~~2020. The increase is primarily attributable to ~~$317.6 million from $170.9 million~~strong client engagement and market volatility, as well as an increase in ~~the comparable period in 2019.~~trading gains.

Brokerage revenues – For the three months ended ~~September 30, 2020,~~March 31, 2021, institutional brokerage revenues increased ~~48.5%~~4.5% to ~~$150.9~~$177.5 million from ~~$101.7~~$169.9 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, institutional brokerage revenues increased 64.4% to $504.7 million from $307.0 million in the comparable period in 2019.~~2020.

Brokerage revenues were impacted by higher trading volumes due to market ~~volatility as a result of the risks from the COVID-19 pandemic. In addition, brokerage revenues were negatively impacted by the continued migration from active to passive management strategies.~~volatility.

For the three months ended September 30, 2020, fixed income institutional brokerage revenues increased 59.5% to $96.7 million from $60.6 million in the comparable period in 2019. For the nine months ended September 30, 2020, fixed income brokerage revenues

~~increased 70.1% to $317.1 million from $186.4 million in the comparable period in 2019. The increase is primarily attributable to strong client engagement and market volatility.~~

~~For the three months ended September 30, 2020,~~March 31, 2021, equity institutional brokerage revenues increased ~~32.1%~~12.7% to ~~$54.2~~$79.1 million from ~~$41.0~~$70.2 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, equity brokerage revenues increased 55.6% to $187.6 million from $120.6 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher trading volumes due to market volatility, partially offset by a continued migration from active to passive management strategies.

For the three months ended March 31, 2021, fixed income institutional brokerage revenues decreased 1.3% to $98.4 million from $99.7 million in the comparable period in 2020.

Investment banking – For the three months ended ~~September 30, 2020,~~March 31, 2021, investment banking revenues increased ~~11.2%~~92.6% to ~~$210.0~~$325.7 million from ~~$188.9~~$169.1 million during the comparable period in ~~2019.~~2020. The increase is primarily attributable to increases in fixed income and equity capital raising revenues partially offset by a decrease in advisory fees. For the nine months ended September 30, 2020, investment banking revenues increased 15.0% to $588.2 million from $511.6 million during the comparable period in 2019. The increase is primarily attributable to an increase in fixed income and ~~equity capital raising revenues, partially offset by a decrease in~~ advisory fees.

For the three months ended ~~September 30, 2020, advisory fee~~March 31, 2021, capital raising revenues ~~decreased 22.9%~~increased 109.8% to ~~$80.8~~$195.3 million from ~~$104.8~~$93.1 million in the comparable period in 2019. For the nine months ended September 30, 2020, advisory fees decreased 13.0% to $254.7 million from $292.6 million in the comparable period in 2019. Advisory fee revenues were negatively impacted by a decrease in industry-wide completed mergers and acquisitions transactions.2020.

For the three months ended ~~September 30, 2020,~~March 31, 2021, equity capital raising revenues increased ~~53.6%~~144.9% to ~~$129.2~~$147.4 million from $84.1 million in the comparable period in 2019. For the nine months ended September 30, 2020, capital raising revenues increased 52.3% to $333.4 million from $219.0 million in the comparable period in 2019.

~~For the three months ended September 30, 2020, fixed income capital raising revenues increased 63.2% to $50.7 million from $31.1~~$60.2 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, fixed income capital raising revenues increased 66.6% to $131.5 million from $78.9 million during the comparable period in 2019.~~2020. The increase is primarily attributable to an increase in the municipal bond origination business. Fixed income capital raising revenues increased from a year ago as clients accessed the market to benefit from the lower rate environment and to raise additional liquidity.

For the three months ended September 30, 2020, equity capital raising revenues increased 48.0% to $78.5 million from $53.0 million during the comparable period in 2019. For the nine months ended September 30, 2020, equity capital raising revenues increased 44.2% to $201.9 million from $140.0 million during the comparable period in 2019. The increase in equity capital raising revenues increase is primarily attributable to an increase in deals compared to the prior year.

For the three months ended March 31, 2021, fixed income capital raising revenues increased 45.5% to $47.8 million from $32.9 million during the comparable period in 2020. The increase is primarily attributable to an increase in the municipal bond origination business, which has rebounded from the challenging market conditions in the first quarter of 2020. In addition, there has been an increase in our corporate debt issuance business.

For the three months ended March 31, 2021, advisory fee revenues increased 71.6% to $130.5 million from $76.1 million in the comparable period in 2020. The growth is primarily attributable to an increase in completed advisory transactions during the first quarter of 2021 compared with lower volumes during the comparable period in 2020 as a result of the economic slow-down due to the pandemic.

Interest income – For the three months ended ~~September 30, 2020,~~March 31, 2021, interest decreased ~~43.6%~~23.9% to ~~$3.4~~$3.8 million from ~~$5.9~~$5.0 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, interest decreased 34.5% to $11.9 million from $18.2 million during the comparable period in 2019.~~2020. The decrease is primarily attributable to lower interest rates and lower inventory levels.

Other income – For the three months ended ~~September 30, 2020,~~March 31, 2021, other income increased to ~~$1.8~~$1.9 million from a loss of ~~$0.4~~$7.5 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, other income decreased 142.2%~~2020. The increase is primarily attributable to ~~a loss of $1.6 million from $3.9 million during~~improved investment gains over the comparable period in ~~2019.~~2020.

Interest expense – For the three months ended ~~September 30, 2020,~~March 31, 2021, interest expense decreased ~~54.5%~~34.3% to ~~$2.7~~$2.8 million from ~~$5.9~~$4.3 million in the comparable period in ~~2019. For the nine months ended September 30, 2020, interest expense decreased 49.0% to $9.5 million from $18.6 million in the comparable period in 2019.~~2020. The decrease is primarily attributable to lower interest rates and a decrease in inventory levels.

For the three months ended ~~September 30, 2020,~~March 31, 2021, Institutional Group non-interest expenses increased ~~18.6%~~33.9% to ~~$286.5~~$388.9 million from ~~$241.6~~$290.5 million for the comparable period in ~~2019. For the nine months ended September 30, 2020, Institutional Group non-interest expenses increased 27.1% to $892.1 million from $702.0 million during the comparable period in 2019.~~2020.

Compensation and benefits – For the three months ended ~~September 30, 2020,~~March 31, 2021, compensation and benefits expense increased ~~22.9%~~46.4% to ~~$210.8~~$301.6 million from ~~$171.5~~$206.0 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, compensation and benefits expense increased 35.2% to $658.2 million from $486.7 million during the comparable period in 2019.~~2020.

Compensation and benefits expense as a percentage of net revenues was ~~58.0% and 60.2%~~59.6% for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021, compared to ~~59.1% and 59.2%~~62.0% for the comparable ~~periods~~period in ~~2019, respectively.~~2020.

Occupancy and equipment rental – For the three months ended ~~September 30, 2020,~~March 31, 2021, occupancy and equipment rental expense increased ~~43.3%~~0.9% to ~~$17.8~~$16.8 million from ~~$12.4~~$16.7 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, occupancy and equipment rental expense increased 31.9% to $50.5 million from $38.3 million during the comparable period in 2019.~~2020. The increase is ~~primarily~~ attributable to higher ~~rent expense.~~data processing costs, partially offset by lower occupancy costs.

Communications and office supplies – For the three months ended ~~September 30, 2020,~~March 31, 2021, communications and office supplies expense increased ~~14.4%~~7.9% to ~~$21.8~~$23.0 million from ~~$19.1~~$21.3 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, communications and office supplies expense increased 22.9% to $66.1 million from $53.8 million during the comparable period in 2019.~~2020. The increase is primarily attributable to higher communication and quote equipment ~~expenses.~~expenses associated with the continued growth of our business.

Commissions and floor brokerage – For the three months ended ~~September 30, 2020,~~March 31, 2021, commissions and floor brokerage expense ~~increased 36.5%~~decreased 3.6% to ~~$7.5~~$9.2 million from ~~$5.5~~$9.6 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, commissions and floor brokerage expense increased 51.8% to $26.4 million from $17.4 million during the comparable period in 2019.~~2020. The ~~increase~~decrease is primarily attributable to ~~higher volumes.~~lower ECN trading costs.

Other operating expenses – For the three months ended ~~September 30, 2020,~~March 31, 2021, other operating expenses ~~decreased 13.4%~~increased 3.4% to ~~$28.7~~$38.2 million from ~~$33.1~~$36.9 million during the comparable period in ~~2019. For the nine months ended September 30, 2020, other operating expenses decreased 14.1% to $90.9 million from $105.7 million during the comparable period in 2019.~~2020. The ~~decrease was~~increase is primarily attributable to ~~a decrease in conference and travel costs, partially offset by increases in settlement and legal costs and~~ higher investment banking gross-up costs, which is attributable to an increase in investment banking ~~revenues.~~revenues, partially offset by partially offset by lower travel, entertainment, and conference-related expenses.

For the three months ended ~~September 30, 2020,~~March 31, 2021, income before income taxes for the Institutional Group segment increased ~~58.0%~~180.8% to ~~$76.8~~$117.2 million from ~~$48.6~~$41.7 million during the comparable period in 2019. For the nine months ended September 30, 2020, income before income taxes for the Institutional Group segment increased 67.8% to $201.6 million from $120.1 million during the comparable period in 2019.2020.

Profit margins (income before income taxes as a percentage of net revenues) have increased to ~~21.1%~~23.2% for the three months ended ~~September 30, 2020~~March 31, 2021 from ~~16.8%~~12.6% during the comparable period in ~~2019~~2020 as a result of ~~higher revenues, partially offset by an increase in expenses.~~

Profit margins (income before income taxes as a percentage of net revenues) have increased to 18.4% for the nine months ended September 30, 2020 from 14.6% during the comparable period in 2019 as a result of higher revenues,strong revenue growth, partially offset by an increase in expenses.

Three ~~and Nine~~ months ended ~~September 30, 2020~~March 31, 2021 Compared with Three ~~and Nine~~ months ended ~~September 30, 2019~~March 31, 2020

The following table presents consolidated financial information for the Other segment for the periods presented (in thousands, except percentages):

	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended March 31,
	2020			2019			% Change			2020			2019			% Change			2021			2020			% Change
Net revenues	$	(6,901	)	$	(3,221	)		(114.3	)	$	(17,122	)	$	(6,945	)		(146.5	)	$	(2,787	)	$	(2,160	)		(29.0	)
Non-interest expenses:
Compensation and benefits		44,983			52,945			(15.0	)		165,266			152,936			8.1			59,569			72,821			(18.2	)
Other operating expenses		45,494			44,526			2.2			132,205			113,368			16.6			50,171			45,820			9.5
Total non-interest expenses		90,477			97,471			(7.2	)		297,471			266,304			11.7			109,740			118,641			(7.5	)
Loss before income taxes	$	(97,378	)	$	(100,692	)		(3.3	)%	$	(314,593	)	$	(273,249	)		15.1	%	$	(112,527	)	$	(120,801	)		(6.8	)%

The other segment includes expenses related to the Company’s acquisition strategy and the investments made in the Company’s infrastructure and control environment.

The expenses relating to the Company’s acquisition strategy, which are included in the other segment, consists of stock-based compensation and operating costs from our various acquisitions. The following shows the expenses that are part of the other segment related to acquisitions.

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change
Non-interest expenses:
Compensation and benefits	$	6,770	$	8,827		(23.3	)	$	22,907	$	16,063		42.6		$	6,174	$	6,427		(3.9	)
Other operating expenses		6,219		6,024		3.2			19,672		17,206		14.3			9,064		6,905		31.3
Total non-interest expenses	$	12,989	$	14,851		(12.5	)%	$	42,579	$	33,269		28.0	%	$	15,238	$	13,332		14.3	%

The expenses not associated with acquisition-related activities in the other segment are as follows:

	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended March 31,
	2020		2019		% Change			2020		2019		% Change			2021		2020		% Change
Non-interest expenses:
Compensation and benefits	$	38,213	$	44,118		(13.4	)	$	142,359	$	136,873		4.0		$	53,395	$	66,394		(19.6	)
Other operating expenses		39,275		38,502		2.0			112,533		96,162		17.0			41,107		38,915		5.6
Total non-interest expenses	$	77,488	$	82,620		(6.2	)%	$	254,892	$	233,035		9.4	%	$	94,502	$	105,309		(10.3	)%

Non-interest expenses for the three months ended ~~September 30, 2020~~March 31, 2021 decreased ~~6.2%~~10.3% from the comparable period in ~~2019.~~2020. The decrease consisted of a ~~13.4%~~19.6% decrease in compensation and benefits and a 2.0% increase in other operating expenses. Non-interest expenses for the nine months ended September 30, 2020 increased 9.4% from the comparable period in 2019. The increase consisted of a 4.0% increase in compensation and benefits and a 17.0%5.6% increase in other operating expenses.

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. As of ~~September 30, 2020,~~March 31, 2021, our total assets increased ~~3.8%~~5.8% to ~~$25.5~~$28.1 billion from ~~$24.6~~$26.6 billion at December 31, ~~2019.~~2020. 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 ~~September 30, 2020,~~March 31, 2021, our liabilities were comprised primarily of deposits of ~~$16.4~~$18.7 billion at Stifel Bancorp, accounts payable and accrued expenses of $1.4 billion, senior notes, net of debt issuance costs, of ~~$1.4~~$1.1 billion, payables to customers of ~~$1.0 billion~~$885.7 million at our broker-dealer subsidiaries, ~~accounts payable~~ and ~~accrued expenses of $1.1 billion,~~ accrued employee compensation of ~~$476.8 million, and trust preferred securities of $60.0~~$399.0 million. To meet our obligations to clients and

operating needs, we had ~~$1.7~~$1.4 billion in cash and cash equivalents at ~~September 30, 2020.~~March 31, 2021. We also had highly liquid assets consisting of held-to-maturity securities of ~~$3.4~~$4.8 billion, available-for-sale securities of ~~$2.8~~$2.2 billion, client brokerage receivables of ~~$1.1~~$1.2 billion, and financial instruments of ~~$819.7~~$981.3 million.

Cash, cash equivalents, and restricted cash ~~increased $574.0~~decreased $853.8 million to ~~$1.7~~$1.4 billion at ~~September 30, 2020,~~March 31, 2021, from ~~$1.1~~$2.3 billion at December 31, ~~2019.~~2020. Operating activities ~~provided~~used cash of ~~$1.3 billion.~~$520.2 million. Investing activities used cash of ~~$1.2~~$1.7 billion due to the growth of the loan portfolio, investment securities purchases, and fixed asset purchases, partially offset by proceeds from the sale and maturity of securities in our investment ~~portfolio and the proceeds received from the sale of ZCM.~~portfolio. Financing activities provided cash of ~~$468.6 million~~$1.3 billion principally due to an increase in bank deposits and ~~proceeds received from the issuance of senior notes and preferred stock,~~securities loaned, partially offset by ~~a decrease~~an increase in ~~securities loaned, repayments of Federal Home Loan Bank advances,~~tax payments related to shares withheld for stock-based compensation, share repurchases, and dividends paid on our common and preferred stock.

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, 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, retained loans, 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 ~~September 30, 2020,~~March 31, 2021, we had ~~$25.5~~$28.1 billion in assets, ~~$9.7~~$10.4 billion of which consisted of cash or assets readily convertible into cash as follows (in thousands, except average days to conversion):

	September 30, 2020		December 31, 2019		Average Conversion	March 31, 2021		December 31, 2020		Average Conversion
Cash and cash equivalents	$	1,716,570	$	1,142,596		$	1,425,511	$	2,279,274
Receivables from brokers, dealers, and clearing organizations		444,685		627,790	5 days		562,432		549,492	5 days
Securities purchased under agreements to resell		436,860		385,008	1 day		470,025		217,930	1 day
Financial instruments owned at fair value		814,205		963,606	3 days		967,005		682,744	3 days
Available-for-sale securities at fair value		2,824,258		3,254,737	3 days		2,190,128		2,230,297	3 days
Held-to-maturity securities at amortized cost		3,397,713		2,856,219	4 days		4,761,401		4,117,384	4 days
Investments		37,723		49,980	10 days		48,477		42,429	10 days
Total cash and assets readily convertible to cash	$	9,672,014	$	9,279,936		$	10,424,979	$	10,119,550

As of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the amount of collateral by asset class is as follows (in thousands):

	September 30, 2020				December 31, 2019				March 31, 2021				December 31, 2020
	Contractual		Contingent		Contractual		Contingent		Contractual		Contingent		Contractual		Contingent
Cash and cash equivalents	$	166,152	$	—	$	98,250	$	—	$	139,794	$	—	$	155,081	$	—
Financial instruments owned at fair value		182,272		182,272		391,634		391,634		208,228		208,228		190,955		190,955
Investment portfolio (AFS & HTM)		—		1,655,394		—		1,617,688		—		1,562,306		—		1,764,421
	$	348,424	$	1,837,666	$	489,884	$	2,009,322	$	348,022	$	1,770,534	$	346,036	$	1,955,376

We have an ongoing authorization from the Board of Directors to repurchase our common stock in the open market or in negotiated transactions. ~~In January 2020, the Board of Directors approved the increase of an additional 4.9 million shares, bringing the authorized share repurchase amount to 10.0 million shares.~~ At ~~September 30, 2020,~~March 31, 2021, the maximum number of shares that may yet be purchased under this plan was ~~8.9~~13.0 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. ~~There were no share repurchases during the three months ended September 30, 2020.~~

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. These liquidity risk management practices have allowed us to effectively manage the market stress ~~that began in the first quarter of 2020~~ from the COVID-19 pandemic. For more information on the effects of the pandemic, see Executive Summary - COVID-19 Pandemic on page ~~53.~~44.

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 (Firm-wide) –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:

At ~~September 30, 2020,~~March 31, 2021, 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 their 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 their 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 ~~September 30, 2020,~~March 31, 2021, available cash and highly liquid investments comprised approximately ~~25%~~22% 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 banking subsidiaries have not violated any internal liquidity policy limits.

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.

Cash and Cash Equivalents – We held ~~$1.7~~$1.4 billion of cash and cash equivalents at ~~September 30, 2020,~~March 31, 2021, compared to ~~$1.1~~$2.3 billion at December 31, ~~2019.~~2020. Cash and cash equivalents provide immediate sources of funds to meet our liquidity needs.

Securities Available-for-Sale – We held ~~$2.8~~$2.2 billion in available-for-sale investment securities at ~~September 30, 2020,~~March 31, 2021, compared to ~~$3.3~~$2.2 billion at December 31, ~~2019.~~2020. As of ~~September 30, 2020,~~March 31, 2021, the weighted-average life of the investment securities portfolio was approximately ~~0.9~~1.3 years. 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 ~~one of~~ our largest funding sources. Deposits provide a stable, low-cost source of funds that we utilize to fund ~~loan and~~ 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”).

As of ~~September 30, 2020,~~March 31, 2021, we had ~~$16.4~~$18.7 billion in deposits compared to ~~$15.3~~$17.4 billion at December 31, ~~2019.~~2020. Our core deposits are primarily comprised of ~~non-interest-bearing deposits,~~ money market deposit accounts, ~~savings accounts,~~non-interest-bearing deposits, and CDs.

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 and customer securities pledged as collateral. The value of customer-owned securities used as collateral is not reflected in the consolidated statements of financial condition. We also have unsecured, committed bank lines available.

Our uncommitted secured lines of credit at ~~September 30, 2020,~~March 31, 2021, totaled ~~$915.0~~$880.0 million with ~~five~~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 ~~$490.0~~$50.0 million during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. 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 ~~September 30, 2020,~~March 31, 2021, 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 three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 on these advances ~~is 1.31% and 1.43%, respectively.~~was 0.29%. 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 ~~September 30, 2020,~~March 31, 2021, there were no Federal Home Loan advances.

Unsecured borrowings – On March 5, 2019, we amended our existing Credit Agreement, which now expires in March 2024. The applicable interest rate under the revolving credit facility is calculated as a per annum rate equal to LIBOR plus 1.75%, as defined.

We can draw upon this line as long as certain restrictive covenants are maintained. Under our amended and restatement Credit Agreement, we 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, our broker-dealer subsidiary, 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.

Our revolving credit facility 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, and judgment defaults. At ~~September 30, 2020,~~March 31, 2021, we had no advances on the $200.0 million revolving credit facility and were in compliance with all covenants and currently do not expect any covenant violations due to the impacts of the COVID-19 pandemic.

Stifel, our broker-dealer subsidiary, has a 364-day Credit Agreement (“Stifel Credit Facility”) with a maturity date of June 2021 in which the lenders are a number of financial institutions. This committed unsecured borrowing facility provides for maximum borrowings of up to $300.0 million at variable rates of interest. At ~~September 30, 2020,~~March 31, 2021, we had no advances on the Stifel Credit Facility and were in compliance with all covenants and currently do not expect any covenant violations due to the impacts of the COVID-19 pandemic.

Federal Home Loan Bank Advances and other secured financing – Stifel Bancorp has borrowing capacity with the Federal Home Loan Bank of ~~$2.9~~$3.4 billion at ~~September 30, 2020~~March 31, 2021 and ~~$59.5~~$64.5 million in federal funds agreements, for the purpose of purchasing short-term funds should additional liquidity be needed. At ~~September 30, 2020,~~March 31, 2021, there were no outstanding FHLB advances. Stifel Bancorp is eligible to participate in the Fed’s discount window program; however, Stifel Bancorp does not view borrowings from the Fed 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 Fed, and is secured by securities. Stifel Bancorp has borrowing capacity of ~~$1.5~~$1.0 billion with the Fed’s discount window at ~~September 30, 2020.~~March 31, 2021. Stifel Bancorp receives overnight funds from excess cash held in Stifel brokerage accounts, which are deposited into a money market account. These balances totaled ~~$15.4~~$16.8 billion at ~~September 30, 2020.~~March 31, 2021.

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 due July 2024 (the “2014 Notes”). Interest on the 2014 Notes is payable semi-annually in arrears. We may redeem the 2014 Notes in whole or in part, at our option, at a redemption price equal to 100% of their principal amount, plus a “make-whole” premium and accrued and unpaid interest, if any, to the date of redemption. In July 2016, we issued an additional $200.0 million in aggregate principal amount of 4.25% senior notes due 2024. In July 2014, we received a BBB- rating on the 2014 Notes.

On December 1, 2015, we sold in a registered underwritten public offering, $300.0 million in aggregate principal amount of 3.50% senior notes due December 2020 (the “December 2015 Notes”). Interest on the December 2015 Notes is payable semi-annually in arrears in December and June. We may redeem the December 2015 Notes in whole or in part, at our option, at a redemption price equal to 100% of their principal amount, plus a “make-whole” premium and accrued and unpaid interest, if any, to the date of redemption. In December 2015, we received a BBB- rating on the 2015 Notes.

On July 11, 2016, the Company completed the pricing of an additional $200.0 million in aggregate principal amount of the Company’s 2014 Notes. The 2014 Notes mature in July 2024 and bear interest at 4.25%, payable semi-annually in arrears in January and July.

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. On or after October 15, 2022, 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 2017 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.

Preferred Stock Offerings – In July 2016, the Company completed an underwritten registered public offering of $150 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series A.

In February 2019, the Company completed an underwritten registered public offering of $150 million 6.25% Non-Cumulative Perpetual Preferred Stock, Series B (“Series B Preferred”). In March 2019, we completed a public offering of an additional $10.0 million of Series B Preferred, pursuant to the over-allotment option.

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, most 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.

We have paid ~~$138.0~~$30.7 million in the form of upfront notes to financial advisors for transition pay during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. 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 ten-year period based on production. The future estimated amortization expense of the upfront notes, assuming current-year production levels and static growth for the remaining ~~three~~nine months in ~~2020,~~2021, and the years ended December 31, ~~2021,~~ 2022, 2023, 2024, 2025, and thereafter are ~~$43.7~~$98.7 million, ~~$102.9~~$100.8 million, ~~$92.4~~$91.0 million, ~~$81.9~~$77.2 million, ~~$68.8~~$57.5 million, and ~~$192.4~~$175.4 million, respectively. These estimates could change if we continue to grow our business through expansion or experience increased production levels.

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 common stock from our company at a designated time in the future without cash payment by the employee and is issued in lieu of cash incentive, principally for deferred compensation and employee retention plans. The restricted stock units or restricted stock awards generally vest over the next one to ten years after issuance and are distributed at predetermined future payable dates once vesting occurs. At ~~September 30, 2020,~~March 31, 2021, the total number of restricted stock units, PRSUs, and restricted stock awards outstanding was ~~14.5~~19.5 million, of which ~~12.5~~16.8 million were unvested. At ~~September 30, 2020,~~March 31, 2021, there was unrecognized compensation cost for deferred awards of approximately ~~$514.4~~$666.1 million, which is expected to be recognized over a weighted-average period of ~~2.7~~2.8 years.

The future estimated compensation expense of the deferred awards, assuming current year forfeiture levels and static growth for the remaining ~~three~~nine months in ~~2020,~~2021, and the years ended December 31, ~~2021,~~ 2022, 2023, 2024, 2025, and thereafter are ~~$39.9~~$135.9 million, ~~$141.1~~$166.2 million, ~~$125.4~~$135.3 million, ~~$94.0~~$107.1 million, ~~$65.6~~$69.0 million, and ~~$48.4~~$52.6 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, Stifel Nicolaus Canada Inc. (“SNC”), is subject to the regulatory supervision and requirements of IIROC.

At ~~September 30, 2020,~~March 31, 2021, Stifel had net capital of ~~$468.5~~$570.3 million, which was ~~37.8%~~39.8% of aggregate debit items and ~~$443.7~~$541.6 million in excess of its minimum required net capital. At ~~September 30, 2020,~~March 31, 2021, all of our other broker-dealer subsidiaries’ net capital exceeded the minimum net capital required under the SEC rule. At ~~September 30, 2020,~~March 31, 2021, SNEL’s capital and reserves were in excess of the financial resources requirement under the rules of the FCA. At ~~September 30, 2020,~~March 31, 2021, our banking subsidiaries were considered well capitalized under the regulatory framework for prompt corrective action. At ~~September 30, 2020,~~March 31, 2021, SNC’s net capital and reserves were in excess of the financial resources requirement under the rules of the IIROC. See Note 15 of the Notes to Consolidated Financial Statements for details of our regulatory capital requirements.

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 more information, see Note 2 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2019, as well as Note 2 of the Notes to Consolidated Financial Statements in this Form 10-Q. Except as noted below under Allowance for Credit Losses, there~~2020. There have not been any material updates to our critical accounting policies and estimates as disclosed in the MD&A of the Company's Annual Report on Form 10-K.

On January 1, 2020, we adopted the new accounting standard that requires the measurement of the allowance for credit losses, which includes the allowance for loan and lease losses and the reserve for unfunded lending commitments, to be based on management’s best estimate of lifetime expected credit losses inherent in the Company’s relevant financial assets.

We regularly review the loan portfolio and have established an allowance for loan losses for inherent losses estimated to have occurred in the loan portfolio through a provision for loan losses charged to income. For loans, the expected credit loss is typically estimated using quantitative methods that consider a variety of factors such as historical loss experience derived from proxy data, the current credit quality of the portfolio as well as an economic outlook over the life of the loan. The life of the loan for closed-ended products is based on the contractual maturity of the loan adjusted for any expected prepayments. The contractual maturity includes any extension options that are at the sole discretion of the borrower. For open-ended products (e.g., lines of credit), the expected credit loss is determined based on the maximum repayment term associated with future draws from credit lines.

In its loss forecasting framework, we incorporate forward-looking information through the use of macroeconomic scenarios applied over the forecasted life of the assets. 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. As any one economic 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, views of internal as well as third-party economists and industry trends.

Also included in the allowance for credit losses are qualitative reserves to cover losses that are expected but, in our company’s assessment, may not be adequately represented in the quantitative methods or the economic 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. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance for credit losses can also be impacted by unanticipated changes in asset quality of the portfolio. In addition, while we have incorporated our estimated impact of COVID-19 into our allowance for credit losses, the ultimate impact of COVID-19 is still unknown, including how long economic activities will be impacted and what effect the unprecedented levels of government fiscal and monetary actions will have on the economy and our credit losses.

As described above, the process to determine the allowance for credit losses requires numerous estimates and assumptions, some of which require a high degree of judgment and are often interrelated. Changes in the estimates and assumptions can result in significant changes in the allowance for credit losses. Our process for determining the allowance for credit losses is further discussed in Note 1 of the Notes to Consolidated Financial Statements.

See Note 2 of the Notes to Consolidated Financial Statements for information regarding the effect of new accounting pronouncements on our consolidated financial statements.

Information concerning our off-balance sheet arrangements is included in Note 20 of the Notes to Consolidated Financial Statements. Such information is hereby incorporated by reference.

Our contractual obligations have not materially changed from those reported in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

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 our business units 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, operational, and regulatory and legal.

We have been affected, and expect to continue to be affected, by market stress resulting from the COVID-19 pandemic that began in the first quarter of 2020. For more information on the effects of the pandemic, see Executive Summary - COVID-19 Pandemic on page ~~53.~~44.

We have adopted policies and procedures concerning Enterprise Risk Management. The Risk Management/Corporate Governance 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.

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.

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, FHLB 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.

Additionally, we monitor, on a daily basis, the Value-at-Risk (“VaR”) in our trading portfolios using a ten-day horizon and report VaR at a 99% confidence level. VaR is a statistical technique used to estimate the probability of portfolio losses based on the statistical analysis of historical price trends and volatility. This model assumes that 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.

The following table sets forth the high, low, and daily average VaR for our trading portfolios during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, and the daily VaR at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~ 2020 (in thousands):

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 margin, an analysis of net interest margin 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 margin at ~~September 30, 2020,~~March 31, 2021, 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			Projected change in net interest margin
+200		17.4	%		39.0	%
+100		8.8			19.3
0		—			—
-100		(5.5	)		(5.7	)
-200		(5.6	)		(6.9	)

The following GAP Analysis table indicates Stifel Bancorp’s interest rate sensitivity position at ~~September 30, 2020~~March 31, 2021 (in thousands):

	Repricing Opportunities										Repricing Opportunities
	0-6 Months			7-12 Months			1-5 Years		5+ Years		0-6 Months			7-12 Months			1-5 Years			5+ Years
Interest-earning assets:
Loans	$	7,220,618		$	547,173		$	2,293,730	$	1,070,471	$	7,800,233		$	910,476		$	2,577,952		$	1,392,043
Securities		5,029,394			226,433			626,832		343,196		5,061,450			387,410			822,605			692,343
Interest-bearing cash		386,912			—			—		—		583,693			—			—			—
	$	12,636,924		$	773,606		$	2,920,562	$	1,413,667	$	13,445,376		$	1,297,886		$	3,400,557		$	2,084,386
Interest-bearing liabilities:
Transaction accounts and savings	$	16,045,851		$	—		$	—	$	—	$	18,147,728		$	—		$	—		$	—
Certificates of deposit		59,683			17,657			34,619		—		24,721			12,960			27,291			—
	$	16,105,534		$	17,657		$	34,619	$	—	$	18,172,449		$	12,960		$	27,291		$	—
GAP		(3,468,610	)		755,949			2,885,943		1,413,667		(4,727,073	)		1,284,926			3,373,266			2,084,386
Cumulative GAP	$	(3,468,610	)	$	(2,712,661	)	$	173,282	$	1,586,949	$	(4,727,073	)	$	(3,442,147	)	$	(68,881	)	$	2,015,505

We maintain a risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings caused by interest rate volatility. Our goal is to manage sensitivity to changes in rates by hedging the maturity characteristics of Fed funds-based affiliated deposits, thereby limiting the impact on earnings. By using derivative instruments, we are exposed to credit and market risk on those derivative positions. We manage the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. 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.

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.

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 ~~September 30, 2020,~~March 31, 2021, the fair value of securities accepted as collateral where we are permitted to sell or repledge the securities was ~~$1.9~~$2.2 billion, and the fair value of the collateral that had been sold or repledged was ~~$182.3~~$208.2 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 is 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 generally refers to the risk of loss resulting from our operations, including, but not limited to, improper or unauthorized execution and processing of transactions, deficiencies in our technology or financial operating systems, and inadequacies or breaches in our control processes. 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 policies and procedures that are designed to identify and manage operational risk at appropriate levels throughout the organization and within such departments as Accounting, Operations, Information Technology, Legal, Compliance, and Internal Audit. 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.

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 further discussion on our legal reserves policy under “Critical Accounting Policies and Estimates” in Item 2, Part I and “Legal Proceedings” in Item 1, Part II of this report. 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 IIROC. 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. Particularly 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.

Our disclosure controls and procedures are designed to, among other things, provide reasonable assurance that material information, both financial and non-financial, and other information required under the securities laws to be disclosed is accumulated and communicated to senior management, including the Chief Executive Officer and Chief Financial Officer, on a timely basis. Under the direction of the Chief Executive Officer and Chief Financial Officer, management has evaluated our disclosure controls and procedures as of ~~September 30, 2020~~March 31, 2021 and has concluded that the disclosure controls and procedures were adequate and effective as of such date.

There have been no changes in our company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended ~~September 30, 2020,~~March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Please see our discussion set forth under Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and Item 1. “Financial Statements” in our Form 10-Q for the quarter ended ~~September 30, 2020.~~March 31, 2021.

~~In addition to the information set forth in this quarterly report on Form 10‑Q, one~~The discussion of our business and operations should ~~also carefully review and consider~~be read together with the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption “Item 1A. Risk Factors” in our annual report on Form 10‑K for the year ended December 31, ~~2019.~~2020. Those risk factors could materially affect our business, financial condition, and results of operations. The risks that we describe in our public filings are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition, and results of operations.

There have been no material changes in our risk factors from those disclosed under the caption “Item 1A. Risk Factors” to our annual report on Form 10-K for the year ended December 31, ~~2019, except for the following update:~~2020.

~~Our results of operations have been, and will likely continue to be, adversely affected by the COVID-19 pandemic.~~

The coronavirus disease (COVID-19) pandemic has, and will likely continue to, severely impact global economic conditions, resulting in substantial ongoing volatility in the global financial markets, prolonged levels of relatively high unemployment, and operational challenges such as the implementation of, or reinstitution of, measures to temporarily close businesses, sheltering-in-place directives and continuing remote work protocols. Governments and central banks around the world reacted to the economic crisis caused by the pandemic by implementing stimulus and liquidity programs and cutting interest rates, though it is unclear whether these or future actions will be successful in countering the economic disruption, or whether additional measures will be taken. If the pandemic continues as expected well in to 2021, or if the actions of governments and central banks are unsuccessful or are not extended or maintained, the adverse impact on the global economy could be prolonged or further deepen, and our results of operations and financial condition in future quarters will be adversely affected.

Towards the end of the first quarter of 2020 and continuing through the second and third quarters of 2020 and into the fourth quarter, the pandemic impacted each of our business segments and such impact will likely persist or increase in future quarters if current conditions persist or worsen (e.g., decline and volatility of asset prices, reduction in interest rates, widening of credit spreads, credit deterioration, market volatility and reduced investment banking advisory activity). This resulted in significant decreases, in the first half of 2020, in the valuation of loans and commitments, investments and certain classes of trading assets, an increase in the allowance

for credit losses, reduced net interest income, and reduced investment banking advisory fees. At the same time, increased revenues that we have realized for certain products related to high levels of client trading activity may not be replicated in future quarters.

Until the impact of the pandemic subsides, we could experience reduced client activity and demand for our products and services and higher credit and valuation losses in our loan, commitment and investment portfolios. Although we have had none to date, we could also experience impairments of other financial assets and other negative impacts on our financial position, including possible constraints on capital and liquidity and possible reductions in our regulatory capital and liquidity ratios, as well as a higher cost of capital, and possible changes or downgrades to our credit ratings. In addition, the sharp decline in interest rates has further, and we expect will continue to, decrease interest margins in our lending businesses. A continued slowdown of commercial activity would cause overall investment banking revenues to decline and the decline in assets under management and client balances will also further reduce asset management and service revenues.

Operationally, although we have initiated a remote working protocol and restricted business travel of our workforce, if significant portions of our associates, including key personnel, are unable to work effectively because of illness, government actions, or other restrictions in connection with the pandemic, the impact of the pandemic on our businesses could be exacerbated. In addition, cybersecurity and operational risks may be heightened as a result of work-from-home arrangements.

Our business is dependent on the willingness and ability of our customers to conduct financial transactions. The continued spread of COVID-19, or another highly infectious or contagious disease, have caused and may continue to cause severe disruptions in such activities, as well as other aspects of conducting our business. These effects include restrictions on our employees’ ability to travel, as well as temporary closures of our facilities or the facilities of our customers, suppliers, or other vendors. We often recruit skilled professionals and new clients by visiting their offices or having them visit our offices. Although we have successfully implemented a virtual recruiting strategy, travel restrictions or other disruptions that prevent us from meeting with professional prospects or potential new clients may adversely impact our ability to recruit such professional prospects or engage potential new clients over the long term.

While the COVID-19 pandemic negatively impacted our results of operations in the first nine months of 2020 and is likely to continue to do so, the extent to which it, and the related global economic crisis, affect our businesses, results of operations and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and any recovery period, future actions taken by governmental authorities, central banks and other third parties in response to the pandemic, and the effects on our customers, counterparties, employees and third-party service providers. Moreover, the effects of the COVID-19 pandemic will heighten the other risks described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. Even after the pandemic subsides, it is possible that the U.S. and other major economies will continue to experience a prolonged recession, which we expect would materially and adversely affect our businesses, results of operations and financial condition.

We have grown our asset management business in recent years, which has increased the risks associated with this business relative to our overall operations. The asset management fees we are paid are dependent upon the value of client assets in fee-based accounts in our Private Client Group segment, as well as AUM in our asset management business. Therefore, in periods of declining market values, the values of fee-based accounts and AUM could resultantly decline, which would negatively impact our revenues. In addition, below-market investment performance by our funds, portfolio managers, or financial advisors could result in reputational damage that might cause outflows or make it more difficult to attract new investors into our asset management products and thus further impact our business and financial condition.

Continued market volatility could also cause clients to move their investments to lower margin products, or withdraw them, which could have an adverse impact on our profitability. Although trading volume has increased in the first nine months of 2020 due primarily to market volatility as a result of the COVID-19 pandemic, such increased volume may not be replicated in future periods. Moreover, we could experience a material reduction in trading volume and lower securities prices in future periods, which would result in lower brokerage revenues, including losses on trading inventory. The fair values of certain of our investments have been and may continue to be negatively impacted, resulting in unrealized or realized losses on such investments.

We effect certain client securities transactions on either a cash or margin basis. We are subject to the risk of a further market decline, which could reduce the value of our collateral below the amount of the customers’ indebtedness. In addition, we offer securities-based lending through Stifel Bancorp. These security-based loans are also subject to the degree of concentrated or restricted positions, or, in the case of concentrated positions, appropriate liquidity of the underlying collateral or potential hedging strategies, which risks are heightened in an environment characterized by declining economic or market conditions as a result of COVID-19.

We are generally exposed to the risk that third parties that owe us money, securities, or other assets will fail to meet their obligations to us due to numerous causes, including bankruptcy, lack of liquidity, or operational failure, among others. We actively buy securities from and sell securities to clients and counterparties in the normal course of our broker-dealers’ market-making and underwriting businesses, which exposes us to credit risk. Our credit risk and credit losses may increase to the extent our loans or investments are to borrowers or issuers who as a group may be uniquely or disproportionately affected by declining economic or market conditions as a result of COVID-19 such as those operating in the hotel, leisure, entertainment and restaurant sector. The deterioration of an individually large exposure due to COVID-19 could lead to additional loan loss provisions and/or charges-offs, or credit impairment

~~of our investments, and subsequently have a material impact on our results of operations, financial condition, regulatory capital, and liquidity.~~

Decreases in short-term interest rates, such as those announced by the Federal Reserve late in our 2019 fiscal year and during the first fiscal quarter of 2020, have had a negative impact on our results, in particular on our net interest income, the difference between the interest earned on interest-earning assets and interest paid on funding sources. The Federal Reserve significantly further lowered interest rates in response to COVID-19 pandemic concerns. These market interest rate declines will negatively affect our results of operations.

Abrupt changes in market and general economic conditions have in the past adversely affected, and may in the future adversely affect, our business and profitability and cause volatility in our results of operations.

Economic and market conditions have had, and will continue to have, a direct and material impact on our results of operations and financial condition because performance in the financial services industry is heavily influenced by the overall strength of general economic conditions and financial market activity.

Our investment banking revenue, in the form of advisory services and underwriting, is directly related to general economic conditions and corresponding financial market activity. When the outlook for such economic conditions is uncertain or negative, financial market activity generally tends to decrease, which reduces our investment banking revenues. Reduced expectations for, or further declines in, the U.S. and global economic outlook could cause financial market activity to decrease and negatively affect our investment banking revenues.

In addition to the business risks set forth in the previous risk factor, global economic conditions and global financial markets remain vulnerable to the potential risks posed by certain events, including, among other things, challenges to global trade or travel due to the continued spread of COVID-19 and any widening of the effect of the pandemic associated therewith, political and financial uncertainty in the United States and the European Union, renewed concern about the U.S. and other major economies, domestic and international political or social unrest (including related protests or disturbances), the reduction in business activity leading to a decrease in global demand for oil and natural gas and the resulting historically low prices for these commodities and complications involving terrorism and armed conflicts around the world. In particular, as it relates to COVID-19 and the associated pandemic, the extent of such effects will depend on future developments which are highly uncertain and cannot be predicted, including the geographic spread of the virus, the overall severity of the disease, the duration of the outbreak, the measures that may be taken by various governmental authorities in response to the outbreak (such as quarantines and travel restrictions) and the possible further impacts on the global economy. More generally, because our business is closely correlated to the general economic outlook, a significant deterioration in that outlook or realization of certain events would likely have an immediate and significant negative impact on our business and overall results of operations.

There were no unregistered sales of equity securities during the quarter ended ~~September 30, 2020. There were also no~~March 31, 2021. The following table sets forth information with respect to purchases made by or on behalf of Stifel Financial Corp. or any “affiliated purchaser” (as defined in Rule 10b-10(a)(3) under the Securities Exchange Act of 1934, as amended), of our common stock during the quarter ended ~~September 30, 2020.~~March 31, 2021.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Delaware		43-1273600
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		43
Consolidated Statements of Financial Condition as of ~~September 30, 2020~~March 31, 2021 (unaudited) and December 31, ~~2019~~2020		43
Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ (unaudited)		65
Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ (unaudited) Consolidated Statements of Changes in Shareholders’ Equity for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ (unaudited)		76 87
Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and September 30, 2019~~ (unaudited)		108
Notes to Consolidated Financial Statements (unaudited)		1210
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		5243
Item 3. Quantitative and Qualitative Disclosures About Market Risk		8063
Item 4. Controls and Procedures		8466

PART II – OTHER INFORMATION
Item 1. Legal Proceedings		8466
Item 1A. Risk Factors		8466
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		8667
Item 6. Exhibits		8768
Signatures		8869

	Three Months Ended March 31,
($ in thousands)	2021			2020
Cash Flows From Operating Activities:
Net income	$	173,015		$	86,589
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		10,907			9,378
Amortization of loans and advances to financial advisors and other employees		26,961			27,729
Amortization of premium on investment portfolio		4,498			6,210
Provision for credit losses and allowance for loans and advances to financial advisors and other employees		(5,252	)		19,253
Amortization of intangible assets		4,268			5,032
Deferred income taxes		47,253			17,098
Stock-based compensation		32,029			30,762
(Gains)/losses on sale of investments		(4,284	)		31,043
Other, net		26,582			(5,464	)
Decrease/(increase) in operating assets, net of assets acquired:
Receivables:
Brokerage clients		(266,101	)		(117,920	)
Brokers, dealers, and clearing organizations		(12,940	)		(76,604	)
Securities purchased under agreements to resell		(252,095	)		(73,960	)
Financial instruments owned, including those pledged		(287,254	)		40,421
Loans originated as held for sale		(754,317	)		(474,824	)
Proceeds from mortgages held for sale		952,053			506,936
Loans and advances to financial advisors and other employees		(30,700	)		(40,554	)
Other assets		(238,950	)		(51,427	)
Increase/(decrease) in operating liabilities, net of liabilities assumed:
Payables:
Brokerage clients		(178,278	)		205,936
Brokers, dealers, and clearing organizations		44,423			106,196
Drafts		(39,591	)		(29,019	)
Financial instruments sold, but not yet purchased		206,784			5,943
Other liabilities and accrued expenses		20,804			(234,445	)
Net cash used in operating activities	$	(520,185	)	$	(5,691	)

	Nine Months Ended September 30,
($ in thousands)	2020			2019
Cash Flows From Operating Activities:
Net income	$	315,003		$	319,318
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,659			28,930
Amortization of loans and advances to financial advisors and other employees		76,728			69,286
Amortization of premium on investment portfolio		15,516			26,687
Provision for credit losses and allowance for loans and advances to financial advisors and other employees		35,066			5,837
Amortization of intangible assets		14,489			10,960
Deferred income taxes		(8,973	)		(13,573	)
Stock-based compensation		80,987			78,329
(Gains)/losses on sale of investments		22,828			(1,279	)
Other, net		(7,926	)		(32,062	)
Decrease/(increase) in operating assets, net of assets acquired:
Receivables:
Brokerage clients		297,127			(194,655	)
Brokers, dealers, and clearing organizations		183,105			(156,658	)
Securities purchased under agreements to resell		(51,852	)		75,851
Financial instruments owned, including those pledged		153,217			110,240
Loans originated as held for sale		(2,013,038	)		(1,293,650	)
Proceeds from mortgages held for sale		2,141,691			1,255,823
Loans and advances to financial advisors and other employees		(138,020	)		(147,144	)
Other assets		64,572			(41,002	)
Increase/(decrease) in operating liabilities, net of liabilities assumed:
Payables:
Brokerage clients		287,384			69,761
Brokers, dealers, and clearing organizations		(33,956	)		56,711
Drafts		(29,060	)		(20,072	)
Financial instruments sold, but not yet purchased		(62,918	)		(41,565	)
Other liabilities and accrued expenses		(37,105	)		(132,768	)
Net cash provided by operating activities	$	1,334,524		$	33,305

	Nine Months Ended September 30, 2019
	Beginning Balance		Provision			Charge-offs			Recoveries		Ending Balance
Commercial and industrial	$	68,367	$	(116	)	$	(79	)	$	—	$	68,172
Residential real estate		11,228		1,246			—			88		12,562
Securities-based loans		1,978		203			—			—		2,181
Commercial real estate		1,778		1,125			—			—		2,903
Construction and land		1,241		2,026			—			—		3,267
Home equity lines of credit		310		123			—			2		435
Other		88		156			(87	)		38		195
Unallocated		843		802			—			—		1,645
	$	85,833	$	5,565		$	(166	)	$	128	$	91,360

	September 30, 2020
	Unpaid Contractual Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
Commercial and industrial	$	13,084	$	—	$	13,084	$	13,084	$	8,158	$	13,085
Residential real estate		1,409		1,249		160		1,409		24		1,499
Home equity lines of credit		—		—		—		—		—		61
Other		150		—		—		—		—		—
Total	$	14,643	$	1,249	$	13,244	$	14,493	$	8,182	$	14,645

							Gross amounts not offset in the Statement of Financial Condition
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts Presented in the Statement of Financial Condition		Amounts available for offset			Available collateral			Net Amount
As of September 30, 2020:
Securities borrowing ⁽¹⁾	$	178,517	$	—	$	178,517	$	(31,528	)	$	(127,965	)	$	19,024
Reverse repurchase agreements ⁽²⁾		436,860		—		436,860		(48,594	)		(384,970	)		3,296
	$	615,377	$	—	$	615,377	$	(80,122	)	$	(512,935	)	$	22,320
As of December 31, 2019:
Securities borrowing ⁽¹⁾	$	135,373	$	—	$	135,373	$	(52,319	)	$	(74,760	)	$	8,294
Reverse repurchase agreements ⁽²⁾		385,008		—		385,008		(59,892	)		(325,096	)		20
Cash flow interest rate contracts		1,086		—		1,086		—			—			1,086
	$	521,467	$	—	$	521,467	$	(112,211	)	$	(399,856	)	$	9,400

									Gross amounts not offset in the Statement of Financial Condition
	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Statement of Financial Condition		Net Amounts Presented in the Statement of Financial Condition			Amounts available for offset		Collateral Pledged		Net Amount
As of September 30, 2020:
Securities lending ⁽³⁾	$	(87,352	)	$	—	$	(87,352	)	$	31,528	$	55,802	$	(22	)
Repurchase agreements ⁽⁴⁾		(182,271	)		—		(182,271	)		48,594		133,677		—
	$	(269,623	)	$	—	$	(269,623	)	$	80,122	$	189,479	$	(22	)
As of December 31, 2019:
Securities lending ⁽³⁾	$	(608,333	)	$	—	$	(608,333	)	$	52,319	$	555,782	$	(232	)
Repurchase agreements ⁽⁴⁾		(391,634	)		—		(391,634	)		59,892		331,742		—
	$	(999,967	)	$	—	$	(999,967	)	$	112,211	$	887,524	$	(232	)

	Nine Months Ended September 30, 2020⁽¹⁾
	Global Wealth Management		Institutional Group		Other		Total
Major business activity:
Commissions	$	373,653	$	187,127	$	—	$	560,780
Capital raising ⁽¹⁾		26,443		333,442		—		359,885
Advisory fees ⁽¹⁾		19		254,733		—		254,752
Investment banking		26,462		588,175		—		614,637
Asset management		667,446		50		—		667,496
Other		30,104		—		2,304		32,408
Total		1,097,665		775,352		2,304		1,875,321
Primary Geographic Region:
United States		1,097,665		609,328		2,304		1,709,297
United Kingdom		—		110,053		—		110,053
Other		—		55,971		—		55,971
	$	1,097,665	$	775,352	$	2,304	$	1,875,321

	Nine Months Ended September 30, 2019⁽¹⁾
	Global Wealth Management		Institutional Group		Other		Total
Major business activity:
Commissions	$	348,272	$	136,078	$	—	$	484,350
Capital raising ⁽¹⁾		28,637		218,962		—		247,599
Advisory fees ⁽¹⁾		—		292,648		—		292,648
Investment banking		28,637		511,610		—		540,247
Asset management		624,025		41		—		624,066
Other		10,619		—		2,160		12,779
Total		1,011,553		647,729		2,160		1,661,442
Primary Geographic Region:
United States		1,011,553		544,918		2,160		1,558,631
United Kingdom		—		99,020		—		99,020
Other		—		3,791		—		3,791
	$	1,011,553	$	647,729	$	2,160	$	1,661,442

	September 30,
	2020		2019
Branch offices		393		381
Financial advisors		2,177		2,097
Independent contractors		94		96
Total financial advisors		2,271		2,193

	Nine Months Ended September 30, 2020						VAR Calculation at
	High		Low		Daily Average		September 30, 2020		December 31, 2019
Daily VaR	$	16,723	$	1,482	$	6,375	$	7,764	$	2,162

	Total Number of Shares Purchased		Average Price Paid per share		Total Number of Shares Purchased as Part of Publically Announced Plans		Maximum Number of Shares That May Yet be Purchased Under the Plan or Program
January 1 - 31, 2021		—	$	—		—		13,253,067
February 1 - 28, 2021		98,618		59.25		98,618		13,154,449
March 1 - 31, 2021		106,200		64.38		106,200		13,048,249
		204,818	$	61.91		204,818

Exhibit No.		Description

3		~~Certificate of Designations of 6.125% Preferred Stock, Series C, incorporated by reference to Exhibit 7 of Stifel Financial Corp.’s Form 8-A filed on May 19, 2020.~~

~~4.1~~		~~Deposit Agreement, dated May 19, 2020, incorporated by reference to Exhibit 8 of Stifel Financial Corp.’s Form 8-A filed on May 19, 2020.~~

~~4.2~~10.1		Form of ~~depositary receipt representing~~restricted cash award agreement under the ~~Depositary Shares (included as Exhibit A to the Deposit Agreement dated May 19, 2020)~~Stifel Financial Corp. 2001 Incentive Stock Plan (2018 Restatement), incorporated herein by reference to Exhibit ~~4.3 of~~10.1 to Stifel Financial Corp.’s Current Report on Form ~~8-A~~8-K filed on ~~May 19, 2020.~~February 2, 2021.

11.1		Statement Re: Computation of per Share Earnings (The calculation of per share earnings is included in Part I, Item 1 in the Notes to Consolidated Financial Statements (Earnings Per Share) and is omitted here in accordance with Section (b)(11) of Item 601 of Regulation S-K).

31.1		Rule 13a-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a) Certification of Chief Financial Officer.

32.1		Section 1350 Certification of Chief Executive Officer.*

32.2		Section 1350 Certification of Chief Financial Officer.*

101 104		The following financial information, formatted in iXBRL (Inline Extensible Business Report Language), Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Statements of Financial Condition as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019;~~2020; (ii) Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019;~~2020; (iii) Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019;~~2020; (v) Consolidated Statements of Changes in Shareholders’ Equity for the three ~~and nine~~ months ended ~~September 30, 2020~~March 31, 2021 and ~~2019;~~2020; (vi) Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019;~~2020; and (vii) Notes to Consolidated Financial Statements. Cover Page Interactive Data File (embedded within the Inline XBRL document).