SEC Comment Letter for STIFEL FINANCIAL CORP (SF, SFB, SF-PB, SF-PC, SF-PD) (CIK 0000720672) (SF) — Dec 24, 2008
STIFEL FINANCIAL CORP (SF, SFB, SF-PB, SF-PC, SF-PD) (CIK 0000720672)
Date: Dec. 24, 2008 · CIK: 0000720672 · Accession: 0000000000-08-063529
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-09305
Letter
Mail Stop 4561
December 24, 2008
VIA USMAIL and FAX (314) 342 - 2115 Mr. James M. Zemlyak Chief Financial Officer Stifel Financial Corporation 501 N. Broadway St. Louis, Missouri 63102 - 2188 Re: Stifel Financial Corporation Form 10-K for the year ended 12/31/2007 Filed on 3/4/2008 File No. 001-09305 Dear Mr. James M. Zemlyak: We have reviewed your filing and have the following comments. Where indicated, we think you should re vise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your explanation. In some of our comments, we may ask you to provi de us with information so we may better understand your disclosure. After reviewing th is information, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 2 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007
Financial Statements and Notes
Note A – Summary of Significant Accounting and Reporting Policies
Investments, page 71
1. We note Investments represent marketable and non-marketable securities not included in the broker-dealer trading inventory and ar e investments in private equity partnerships, startup companies and other venture capital investments. We also note your disclosure th at these amounts are carried at fair value and some at accreted cost. Please tell us if thes e investments are accounted for under SFAS 115 or APB 18 to clarify the basis for the recorded value of thes e assets. Lastly, we note the Investments asset is comp rised of various items including amounts related to your deferred compensation pl ans, investments in qualified Missouri businesses, etc. Tell us what consideration was given to providing a tabular presentation showing the different com ponents of this asset with appropriate references to the relevant footnotes.
Note B – Acquisitions
Significant Acquisiti ons, pages 78 – 81 2. We note that as part of the Ryan Beck acquisition, you agreed to contingent earn- out payments based on revenues genera ted by specified individuals in the acquired divisions. Tell us how you considered the guidance in paragraph 34 of SFAS 141 and EITF 95-8 in determining whether these contingent considerations should be accounted for as an adjustment to the purchase price or as compensation. Note P – Stock-Based Compensation Plans
Stock Units, pages 94 – 95
3. Clarify how you are accounting for the issuance of rest ricted stock units under your 2007 Incentive Stock Plan pursuant to SFAS 123(R). In this regard, to the extent that stock-based comp ensation is classified as a liability, include in your response a description of your re-meas urement policy consistent with the guidance in paragraph 37 of SFAS 123(R). In addition, clarify how fair value is determined and any assumptions in making that determination.
James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 3 Note T – Segment Reporting, pages 100 – 101
4. Please tell us what consideration was gi ven to disclosing the reportable segments’ assets and reconcile them to the enterprise ’s consolidated assets. Reference is made to paragraph 32(c) of SFAS 131. Proxy Statement on Schedule 14A
Compensation Discussion and Analysis
Annual Incentive Compensation, page 26
5. We note the factors the compensation committee weighed in determining the annual incentive compensation for your na med executive officers. In future filings, please expand your disclosure to discuss how the committee applied these factors to each named executive officer a nd determined the level of compensation payable for such named executive officer. To the extent compensation decisions are based on achieving certain target levels, please quan tify those target levels. Please tell us how you intend to comply with this comment. Long-Term Incentive Awards, page 29
6. We note your disclosure that long-te rm incentive awards are based upon the creation of shareholder value and an incr ease to your stock price. Please expand your discussion and analysis of th e factors the compensation committee considered in determining the amoun t of long-term incentive compensation awarded to each named executive officer. To the extent long-term incentives are based on achieving certain target levels, please quantify those target levels. In addition, we note that the compensation co mmittee has discretionary authority to set long-term incentive awards. Please di sclose if the committee exercised its discretionary authority. Provi de this information in futu re filings and tell us how you intend to comply.
James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 4 Executive Compensation in the Last Fiscal Year
Nonqualified Deferred Compensation, page 40
7. In future filings, please include a footnote to your Nonqualified Deferred Compensation Table quantifying the extent to which the amounts reported in the “Aggregate Earnings” column are repor ted as compensation in your Summary Compensation Table. Refer to the Instru ction to Item 402(i)(2) of Regulation S- K.
FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2008 Financial Statements and Notes
Note C – Fair Value Measurements, pages 24 – 25
8. For the amount of unrealized losses incl uded in net income for your Level 3 assets, please tell us and disclose the amount attributable to assets still held at the reporting date and a description of wh ere these amounts are reported in the statement of income. Reference is made to paragraph 32(d) of SFAS 157.
Certifications
9. We note that your certifications were not filed in the exact form as outlined in Item 601(B)(31)(i) of Regulation S-K. The discrepancy involves modifying the wording in paragraph 4(d). Please confir m that in future filings, you will file certifications in the exact form as outlin ed in Item 601(B)(31)(i) of Regulation S- K.
As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your responses to our comments and provides a ny requested information. Detailed letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments. We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 5 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
You may contact Wilson K. Lee at (2 02) 551 – 3468 or Cicely LaMothe at (202) 551 – 3413 if you have questions regarding co mments on the financial statements and related matters. Please c ontact Kristina Aberg at (202) 551 - 3404 or me at (202) 551 – 3233 with any other questions.
Sincerely,
Tom Kluck Branch Chief
Show Raw Text
Mail Stop 4561 December 24, 2008 VIA USMAIL and FAX (314) 342 - 2115 Mr. James M. Zemlyak Chief Financial Officer Stifel Financial Corporation 501 N. Broadway St. Louis, Missouri 63102 - 2188 Re: Stifel Financial Corporation Form 10-K for the year ended 12/31/2007 Filed on 3/4/2008 File No. 001-09305 Dear Mr. James M. Zemlyak: We have reviewed your filing and have the following comments. Where indicated, we think you should re vise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your explanation. In some of our comments, we may ask you to provi de us with information so we may better understand your disclosure. After reviewing th is information, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 2 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2007 Financial Statements and Notes Note A – Summary of Significant Accounting and Reporting Policies Investments, page 71 1. We note Investments represent marketable and non-marketable securities not included in the broker-dealer trading inventory and ar e investments in private equity partnerships, startup companies and other venture capital investments. We also note your disclosure th at these amounts are carried at fair value and some at accreted cost. Please tell us if thes e investments are accounted for under SFAS 115 or APB 18 to clarify the basis for the recorded value of thes e assets. Lastly, we note the Investments asset is comp rised of various items including amounts related to your deferred compensation pl ans, investments in qualified Missouri businesses, etc. Tell us what consideration was given to providing a tabular presentation showing the different com ponents of this asset with appropriate references to the relevant footnotes. Note B – Acquisitions Significant Acquisiti ons, pages 78 – 81 2. We note that as part of the Ryan Beck acquisition, you agreed to contingent earn- out payments based on revenues genera ted by specified individuals in the acquired divisions. Tell us how you considered the guidance in paragraph 34 of SFAS 141 and EITF 95-8 in determining whether these contingent considerations should be accounted for as an adjustment to the purchase price or as compensation. Note P – Stock-Based Compensation Plans Stock Units, pages 94 – 95 3. Clarify how you are accounting for the issuance of rest ricted stock units under your 2007 Incentive Stock Plan pursuant to SFAS 123(R). In this regard, to the extent that stock-based comp ensation is classified as a liability, include in your response a description of your re-meas urement policy consistent with the guidance in paragraph 37 of SFAS 123(R). In addition, clarify how fair value is determined and any assumptions in making that determination. James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 3 Note T – Segment Reporting, pages 100 – 101 4. Please tell us what consideration was gi ven to disclosing the reportable segments’ assets and reconcile them to the enterprise ’s consolidated assets. Reference is made to paragraph 32(c) of SFAS 131. Proxy Statement on Schedule 14A Compensation Discussion and Analysis Annual Incentive Compensation, page 26 5. We note the factors the compensation committee weighed in determining the annual incentive compensation for your na med executive officers. In future filings, please expand your disclosure to discuss how the committee applied these factors to each named executive officer a nd determined the level of compensation payable for such named executive officer. To the extent compensation decisions are based on achieving certain target levels, please quan tify those target levels. Please tell us how you intend to comply with this comment. Long-Term Incentive Awards, page 29 6. We note your disclosure that long-te rm incentive awards are based upon the creation of shareholder value and an incr ease to your stock price. Please expand your discussion and analysis of th e factors the compensation committee considered in determining the amoun t of long-term incentive compensation awarded to each named executive officer. To the extent long-term incentives are based on achieving certain target levels, please quantify those target levels. In addition, we note that the compensation co mmittee has discretionary authority to set long-term incentive awards. Please di sclose if the committee exercised its discretionary authority. Provi de this information in futu re filings and tell us how you intend to comply. James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 4 Executive Compensation in the Last Fiscal Year Nonqualified Deferred Compensation, page 40 7. In future filings, please include a footnote to your Nonqualified Deferred Compensation Table quantifying the extent to which the amounts reported in the “Aggregate Earnings” column are repor ted as compensation in your Summary Compensation Table. Refer to the Instru ction to Item 402(i)(2) of Regulation S- K. FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2008 Financial Statements and Notes Note C – Fair Value Measurements, pages 24 – 25 8. For the amount of unrealized losses incl uded in net income for your Level 3 assets, please tell us and disclose the amount attributable to assets still held at the reporting date and a description of wh ere these amounts are reported in the statement of income. Reference is made to paragraph 32(d) of SFAS 157. Certifications 9. We note that your certifications were not filed in the exact form as outlined in Item 601(B)(31)(i) of Regulation S-K. The discrepancy involves modifying the wording in paragraph 4(d). Please confir m that in future filings, you will file certifications in the exact form as outlin ed in Item 601(B)(31)(i) of Regulation S- K. As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your responses to our comments and provides a ny requested information. Detailed letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments. We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. James M. Zemlyak Stifel Financial Corporation December 24, 2008 Page 5 In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact Wilson K. Lee at (2 02) 551 – 3468 or Cicely LaMothe at (202) 551 – 3413 if you have questions regarding co mments on the financial statements and related matters. Please c ontact Kristina Aberg at (202) 551 - 3404 or me at (202) 551 – 3233 with any other questions. Sincerely, Tom Kluck Branch Chief