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• Overall Financial and Operational Results

  • Q2 2026 net revenue hit $1.45 billion, up 13% YoY, marking the second highest Q2 result in firm history. Non-GAAP EPS was $1.42, up 25% YoY.
  • H1 2026 delivered record net revenue of $2.9 billion (15% above the prior all-time record) and record EPS of $2.87 (up 28% from the prior record). Return on tangible common equity hit ~24% for both the quarter and H1, and tangible book value per share increased 15% YoY.
  • The loan book grew $2.6 billion in Q2, putting the firm on track to hit its full year 2026 loan growth target of up to $4 billion. Net interest income came in at the higher end of guidance, driven by growth in interest-earning assets.
  • Expenses were well controlled: the compensation ratio hit 57%, 60 basis points below consensus and down from 57.5% in Q1. Non-compensation expense growth was tied to business expansion, and the effective tax rate of 24.4% was within guidance.
  • Capital deployment reached over $500 million in Q2 across business reinvestment, share repurchases, and dividend payments. The firm ended Q2 with ~$480 million in excess capital after funding loan growth and share repurchases, with a Tier 1 leverage ratio of 11.2%.

• Core Business Strategy Differentiation

  • The "put advisors first" strategy has resulted in Stifel ranking #1 in employee advisor satisfaction from J.D. Power for four consecutive years, with top rankings in leadership/culture, operational support, and products/marketing. Recruiting for experienced advisors remains highly competitive, with large industry players continuing to invest heavily in the advisory business.
  • 2025 efficiency initiatives have delivered significant profitability improvements, especially in the institutional segment.

• Artificial Intelligence Perspective

  • Management views AI as a productivity accelerator, not a replacement for human financial advice and judgment. AI increases the abundance of information, which raises the value of trusted human judgment, relationships, and client service.
  • AI expands the capabilities of talented employees: it enables bankers to evaluate more opportunities, research analysts to uncover more insights, advisors to spend more time with clients, and staff to focus on higher-value work. Management sees AI as a major secular investment opportunity that runs directly through the middle market, where Stifel operates, creating new client advisory and capital formation opportunities.

• Capital Allocation Priorities

  • Priorities (measured by risk-adjusted return on invested capital) are unchanged: 1) organic reinvestment in the business, 2) opportunistic share repurchases when the stock price disconnects from business fundamentals, 3) disciplined strategic acquisitions. Given current market valuations for acquisition targets, management views reinvestment in the business and share repurchases as the most attractive uses of excess capital currently.

• Full year 2026 loan growth guidance is maintained at up to $4 billion, and management remains highly confident in hitting this target with ample existing funding flexibility.
  • Q3 2026 net interest income is guided to a range of $290 million to $300 million, based on incremental loan growth and a stable net interest margin.
  • The 2026 full-year non-compensation operating ratio guidance is maintained at 18% to 20%, and Q2 2026 came in at 19.6% within this range.
  • Management expects the full-year 2026 compensation ratio to land in the midpoint to lower half of the guided 56.5% to 57.5% range if operating conditions hold.
  • Institutional investment banking pipelines remain strong, and management continues to anticipate a strong full year 2026 for the segment, with material upside if financial sponsor activity recovers from current below-historical levels.
  • Management expects additional quarterly growth of ~$1 billion in venture deposits, supporting ongoing loan growth funding.

1. Global Wealth Management: Generated record net revenue of $957 million, up 13% year-on-year. This segment contributed 66% of total Q2 2026 net revenue. The segment ended the quarter with record total client assets of $580 billion (up 12% YoY, 14% organic growth excluding the SIA asset sale) and fee-based assets of $240 billion (up 16% YoY, 19% organic growth excluding SIA).
2. Institutional Group: Posted Q2 revenue of $481 million, up 15% year-on-year, marking the second strongest Q2 in firm history. This segment contributed 33% of total Q2 2026 net revenue. First half 2026 institutional revenue was up 21% YoY, led by 43% growth in investment banking. Within institutional:
   • Full firm investment banking revenue totaled $332 million, up 42% YoY: Advisory revenue up 24% to $157 million, capital raising revenue up 121% to $102 million, fixed income underwriting revenue up 18% to $64 million.
   • Transactional revenue declined 19% YoY, driven by a $30 million aircraft business gain in Q2 2025; excluding that gain, results were comparable to the prior year. Equity transactional revenue was down 4% due to European restructuring.
   • The institutional segment pre-tax margin reached 19.5% in H1 2026, an 850 basis point improvement YoY.

• Broader market volatility remains likely, and geopolitical uncertainty creates ongoing operating environment uncertainty that could change market conditions quickly.
  • Current acquisition valuations are at the high end of the historical range, creating a disconnect between acquisition price expectations and Stifel's required return hurdles, limiting attractive M&A opportunities at present.
  • AI technology is still in early stages of adoption, and token (computing resource) costs for AI development are currently incremental, though management expects these costs to decline over time due to competitive pressures.
  • Bank and depository M&A activity remains relatively muted, with most current active dialogue expected to close in 2027 rather than 2026, near-term revenue upside from this segment is limited.

Q: How do you reconcile your strong institutional backlog commentary with broader industry reports of subdued bank M&A and sidelined middle market sponsors, and what is your outlook for these segments in H2? / A: While bank depository M&A is currently muted (in a "buyer strike" amid market uncertainty), Stifel's diversified institutional platform has strength across healthcare, industrials, technology, and energy outside of financial services M&A, which is driving backlog momentum. Capital raising activity outside of financials is particularly strong. There is upside potential for both bank M&A and sponsor activity as conditions improve, and management is optimistic overall with upside to current base expectations. Most active bank M&A dialogue will close in 2027 rather than 2026. A 2026 presidential election is creating urgency around the current open regulatory window, supporting ongoing active dialogue.

Q: Given market fears of AI displacing advisors, do you expect advisor recruitment competition to ease, and how will AI-driven productivity gains translate to higher sales growth without increasing fee pressure? / A: AI acts as an amplifier of talent: it makes good advisors more valuable, and recruitment competition remains as intense as ever, with major firms still increasing recruitment packages despite public AI disruption fears. Stifel's incentivized, entrepreneurial culture lets advisors independently redeploy freed-up time to higher-value client work naturally, so management is confident productivity gains will translate to growth. Fee pressure has been constant in the industry since 1975, and while product-level fees have compressed, holistic personal advice faces far less pressure, so net fee trends are expected to remain positive over time.

Q: Is the recent 39% incremental margin you achieved sustainable, and how does AI impact your operating leverage outlook? / A: Incremental margins vary by segment: over 20% for institutional, over 20% for private client wealth, and higher for the bank business. The strong incremental margin in H1 2026 came from 80 basis points of comp ratio reduction driven by the SIA sale and European restructuring, plus higher net interest income that comes with very high incremental margins. If operating conditions hold, management expects to maintain strong incremental operating leverage and end the year in the lower half of the guided comp ratio range. Contrary to initial expectations that AI would reduce headcount needs, AI is actually accelerating business growth, enabling Stifel to gain market share and requiring more talented staff to capture new opportunities, rather than cutting headcount.

Q: Where do you see M&A opportunities currently, and why are you prioritizing share repurchases over acquisitions right now? / A: Most potential acquisition targets in financial services are priced at 15-18x adjusted EBITDA, while Stifel trades at only 8x, creating a clear disconnect that makes buying back Stifel's own stock the highest return use of capital. Stifel generates a 24% return on tangible equity, and management will not do dilutive deals with sub-10% returns just to hit revenue growth targets. The firm remains actively looking at opportunities and will pursue deals that meet return hurdles, but current valuations are too high for most attractive opportunities.