STIFEL FINANCIAL CORP Income Taxes Disclosure

NOTE 25 – Income Taxes

As discussed in Note 2 – Summary of Significant Accounting Policies, we adopted ASU 2023-09 on January 1, 2025, on a prospective basis. As a result, our rate reconciliation for the year ended December 31, 2025, is presented in accordance with the new disclosure requirements, while the reconciliations for the years ended December 31, 2024 and 2023, respectively, continue to be presented under disclosure requirements in effect for those periods.

Our net deferred tax asset at December 31, 2025, includes net operating loss carryforwards of $120.7 million that expire between 2025 and 2044. Certain of our net operating loss carryforwards do not expire. A valuation allowance is recorded to the extent that it is more likely than not that any portion of the deferred tax asset will not be realized. The valuation allowance was increased by $2.7 million. We believe the realization of the remaining net deferred tax asset of $151.2 million is more likely than not based on the ability to carry back certain tax attributes against prior year taxable income for tax years before 2025 and to carry forward net operating losses indefinitely after 2025, and expectations of future taxable income, which is supported by a history of cumulative income.

The material amount of the deferred tax asset valuation allowance relates to the net operating loss carryforwards in our foreign jurisdictions, primarily in the U.K., Germany, and Canada. These foreign net operating loss carryforwards total $51.9 million of the deferred tax asset valuation allowance. The negative evidence considered was the three-year cumulative loss analysis at the entity and jurisdictional level. We could not identify enough positive evidence, through forecasts, the reversal of deferred tax liabilities, or tax planning strategies, to overcome the negative evidence from the three-year cumulative loss.

We have $3.9 million of the deferred tax asset valuation allowance related to other foreign components of the deferred tax asset, mainly deferred compensation from restricted stock units and cash debentures. The negative evidence considered here was the three-year cumulative loss analysis as well. We have an additional $2.7 million of state net operating loss carryforwards included in the deferred tax asset valuation allowance. The negative evidence considered was a three-year cumulative loss analysis for a separate entity filing state returns. We have approximately $9.2 million of net operating loss carryforwards that do not require a valuation allowance.

At December 31, 2025, the Company’s current income tax payable, included in accounts payable and accrued expenses, was a debit balance of $29.0 million and will be used to reduce future income tax payments. At December 31, 2024, the Company’s current income tax payable, included in accounts payable and accrued expenses, was $5.8 million. The current tax receivable, included in other assets, is $64.5 million and $30.1 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2025, we considered all undistributed earnings of non-U.S. subsidiaries to be permanently reinvested. Therefore, we have not provided for any U.S. deferred income taxes. Because the time or manner of repatriation is uncertain, we cannot determine the impact of local taxes, withholding taxes and foreign tax credits associated with the future repatriation of such earnings, and therefore cannot quantify the tax liability that would be payable in the event all such foreign earnings are repatriated.

Uncertain Tax Positions

As of December 31, 2025 and 2024, we had $5.5 million and $5.5 million, respectively, of gross unrecognized tax benefits, all of which, if recognized, would impact the effective tax rate. We recognize interest and penalties related to uncertain tax positions in provision for income taxes in the consolidated statements of operations. As of December 31, 2025 and 2024, we had accrued interest and penalties of $0.4 million and $0.3 million, respectively, before benefit of federal tax deduction, included in accounts payable and accrued expenses in our consolidated statements of financial condition. The amount of interest and penalties recognized in our consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023, was not significant.

We file income tax returns with the U.S. federal jurisdiction, various states, and certain foreign jurisdictions. We are not subject to U.S. federal examination for taxable years before 2022. We are not subject to certain state and local, or non-U.S. income tax examinations for taxable years before 2015.

On July 4, 2025, the reconciliation bill, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law in the U.S., which includes a broad range of tax reform provisions. Beginning in 2025, the OBBBA provides an elective deduction for domestic research and development expenses, a reinstatement of elective 100% first-year bonus depreciation, and repeal of non-U.S. corporations’ fiscal year-end. We elected to expense its domestic research and development expenditures and take 100% bonus depreciation for qualified assets for U.S. tax purposes. We will continue to monitor the impact of the OBBBA and the range of potential outcomes, which will depend on our facts in each year and anticipated guidance from the U.S. Department of the Treasury.