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What changed in PIPER SANDLER COMPANIES's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PIPER SANDLER COMPANIES's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+290 added−320 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-26)

Top changes in PIPER SANDLER COMPANIES's 2024 10-K

290 paragraphs added · 320 removed · 233 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe provide employees with competitive compensation packages that include base salary, annual incentive bonuses, length of service awards, and equity awards. For further information on the restricted shares we grant to employees as part of year-end compensation, see Note 19 to our consolidated financial statements in Part II, Item 8 of this Form 10-K.
Biggest changeFor further information on the restricted shares we grant to employees as part of year-end compensation, see Note 18 to our consolidated financial statements in Part II, Item 8 of this Form 10-K. We also offer benefits such as life and health (medical, dental and vision) insurance, paid time off, tuition reimbursement and a 401(k) plan with matching employer contributions.
PSC Capital Partners LLC, Piper Sandler Advisors LLC, Piper Heartland Healthcare Capital LLC and Piper Sandler Finance Management LLC are asset management subsidiaries and registered investment advisors.
PSC Capital Partners LLC, Piper Heartland Healthcare Capital LLC and Piper Sandler Finance Management LLC are asset management subsidiaries and registered investment advisors.
As part of these efforts, we strive to offer a competitive compensation and benefits program; provide training and development opportunities; foster a community where everyone feels included and empowered to do their best work; and give employees the opportunity to give back to their communities.
As part of these efforts, we strive to foster a community where everyone feels included and empowered to do their best work; provide training, mentorship and development opportunities; offer a competitive compensation and benefits program; and give employees the opportunity to give back to their communities.
Among the rules that apply to Piper Sandler & Co. are the uniform net capital rule of the SEC (Rule 15c3-1) and the net capital rule of FINRA. Both rules set a minimum level of net capital a broker dealer must maintain and also require that a portion of the broker dealer's assets be relatively liquid.
Among the rules that apply to Piper Sandler & Co. are the uniform net capital rule of the SEC (Rule 15c3-1) and the net capital rule of FINRA. Both rules set a minimum level of net capital a broker dealer must maintain and require that a portion of the broker dealer's assets be relatively liquid.
Our entities in Hong Kong, the U.K. and Guernsey are subject to similar anti-money laundering laws and regulations in those jurisdictions. We are also subject to the U.S. Foreign Corrupt Practices Act as well as other anti-bribery and anti-corruption laws in the jurisdictions in which we operate.
Our entities in Hong Kong, the U.K., Germany and Guernsey are subject to similar anti-money laundering laws and regulations in those jurisdictions. We are also subject to the U.S. Foreign Corrupt Practices Act as well as other anti-bribery and anti-corruption laws in the jurisdictions in which we operate.
Alternative Asset Management Funds We have created alternative asset management funds in merchant banking and healthcare in order to invest firm capital and to manage capital from outside investors. FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS As of December 31, 2023, the substantial majority of our net revenues and long-lived assets were located in the U.S.
Alternative Asset Management Funds We have created alternative asset management funds in merchant banking and healthcare in order to invest firm capital and to manage capital from outside investors. FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS As of December 31, 2024, the substantial majority of our net revenues and long-lived assets were located in the U.S.
Our headquarters are located in Minneapolis, Minnesota and we have offices across the U.S. and international locations in London, Aberdeen and Hong Kong. OUR BUSINESS We operate in one reportable segment providing investment banking services, institutional sales and trading services for various equity and fixed income products, and research services.
Our headquarters are located in Minneapolis, Minnesota and we have offices across the U.S. and international locations in London, Aberdeen, Munich, Paris, Zurich and Hong Kong. OUR BUSINESS We operate in one reportable segment providing investment banking services, institutional sales and trading services for various equity and fixed income products, and research services.
Integral to our capital markets efforts, we have equity sales and trading relationships with institutional investors in North America and Europe that invest in our core sectors. Our fundamental equity research analysts provide investment ideas and support to our trading clients on approximately 1,000 companies.
Integral to our capital markets efforts, we have equity sales and trading relationships with institutional investors in North America and Europe that invest in our core sectors. Our fundamental equity research analysts provide investment ideas and support to our trading clients on approximately 950 companies.
The Piper Sandler logo and the other trademarks, tradenames and service marks of Piper Sandler Companies mentioned in this report or elsewhere, including, but not limited to, PIPER SANDLER ® , PIPER JAFFRAY ® , REALIZE THE POWER OF PARTNERSHIP ® , CORNERSTONE MACRO ® , SIMMONS ENERGY | A DIVISION OF PIPER SANDLER ® , SIMMONS ENERGY | A DIVISION OF PIPER JAFFRAY ® , SIMMONS ENERGY ® , SIMMONS & COMPANY INTERNATIONAL ® , SIMMONSCO-INTL ® , PIPER SANDLER FINANCE SM , BIOINSIGHTS ® , TAKING STOCK WITH TEENS ® , HEALTHY ACTIVE AND SUSTAINABLE LIVING ® and GUIDES FOR THE JOURNEY ® , are the property of Piper Sandler & Co., a subsidiary of Piper Sandler Companies.
The Piper Sandler logo and the other trademarks, tradenames and service marks of Piper Sandler Companies mentioned in this report or elsewhere, including, but not limited to, PIPER SANDLER ® , PIPER JAFFRAY ® , REALIZE THE POWER OF PARTNERSHIP ® , CORNERSTONE MACRO ® , SIMMONS ENERGY A DIVISION OF PIPER SANDLER ® , SIMMONS ENERGY A DIVISION OF PIPER JAFFRAY ® , SIMMONS ENERGY ® , SIMMONS & COMPANY INTERNATIONAL ® , SIMMONSCO-INTL ® , PIPER SANDLER FINANCE SM , BIOINSIGHTS ® , TAKING STOCK WITH TEENS ® , Aviditi ® , Aviditi Advisors ® and GUIDES FOR THE JOURNEY ® , are the property of Piper Sandler & Co., a subsidiary of Piper Sandler Companies.
Baker 56 Global Co-Head of Investment Banking and Capital Markets Michael R. Dillahunt 55 Global Co-Head of Investment Banking and Capital Markets Jonathan J. Doyle 58 Vice Chairman and Head of Financial Services Group John W. Geelan 48 General Counsel and Secretary Chad R. Abraham is our chief executive officer, a position he has held since January 2018.
Baker 57 Global Co-Head of Investment Banking and Capital Markets Michael R. Dillahunt 56 Global Co-Head of Investment Banking and Capital Markets Jonathan J. Doyle 59 Vice Chairman and Head of Financial Services Group John W. Geelan 49 General Counsel and Secretary Chad R. Abraham is our chief executive officer, a position he has held since January 2018.
Piper Sandler Companies | 6 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information regarding our executive officers and their ages as of February 20, 2024, are as follows: Name Age Position(s) Chad R. Abraham 55 Chief Executive Officer Debbra L. Schoneman 55 President Katherine P. Clune 43 Chief Financial Officer James P.
Piper Sandler Companies | 6 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information regarding our executive officers and their ages as of February 20, 2025, are as follows: Name Age Position(s) Chad R. Abraham 56 Chief Executive Officer Debbra L. Schoneman 56 President Katherine P. Clune 44 Chief Financial Officer James P.
As of December 31, 2023, we had 1,725 full-time employees, of which 1,632 were employed in the U.S. and 93 in the United Kingdom ("U.K.") and Hong Kong. Approximately 1,330 of our employees were registered with the Financial Industry Regulatory Authority, Inc. ("FINRA") as of December 31, 2023.
As of December 31, 2024, we had 1,805 full-time employees, of which 1,700 were employed in the U.S. and 105 in the United Kingdom ("U.K."), Germany, France, Switzerland and Hong Kong. Approximately 1,370 of our employees were registered with the Financial Industry Regulatory Authority, Inc. ("FINRA") as of December 31, 2024.
In 2023, we donated a total of $7.1 million through employee donations, our corporate matching gifts programs and corporate grants. Our employees supported 1,885 causes in 2023 through our Annual Charitable Giving Campaign, a two-week campaign when Piper Sandler Companies matches each employee's donations up to $5,000.
In 2024, we donated a total of $8.0 million through employee donations, our corporate matching gifts programs and corporate grants. Piper Sandler Companies matches each employee's donations up to $5,000. In 2024, our employees supported over 1,850 causes.
We maintain several programs and partnerships to help us attract a diverse array of great talent, including the Career Exploration Program, the Piper Sandler MBA Fellowship Program and community partnerships with organizations that focus on coaching, training and mentorship to help close the career opportunity gaps for underrepresented college students.
We maintain several programs and partnerships to help us broaden the pipeline to attract great talent, including summer internships, the Career Exploration Program, the Piper Sandler MBA Fellowship Program and community partnerships with organizations that focus on coaching, training and mentoring college students with varied backgrounds and experiences.
The regulatory framework of the financial services industry is designed primarily to safeguard the integrity of the capital markets and to protect customers, not creditors or shareholders.
The regulatory framework of the financial services industry is designed primarily to safeguard the integrity of the capital markets and to protect customers, not creditors or shareholders. The laws, rules and regulations comprising this regulatory framework can (and do) change frequently, as can the interpretation and enforcement of existing laws, rules and regulations.
Our public finance investment banking capabilities focus on state and local governments, cultural and social service non-profit entities, special districts, project finance, and the education, healthcare, hospitality, senior living, housing and transportation sectors.
For our government and non-profit clients, we underwrite municipal issuances, provide municipal financial advisory and loan placement services, and offer various over-the-counter derivative products. Our public finance investment banking capabilities focus on state and local governments, cultural and social service non-profit entities, special districts and development infrastructure, project finance, and the education, healthcare, hospitality, senior living, housing and transportation sectors.
Our U.S. broker dealer subsidiary (Piper Sandler & Co.) is registered as a securities broker dealer with the SEC and is a member of various SROs and securities exchanges. FINRA serves as the primary SRO of Piper Sandler & Co., and the New York Stock Exchange ("NYSE") has oversight over NYSE-related market activities.
FINRA serves as the primary SRO of Piper Sandler & Co., and the New York Stock Exchange ("NYSE") has oversight over NYSE-related market activities.
One key metric we use to benchmark our firm to industry peer companies is the number of investment banking managing directors. At December 31, 2023, we had 169 corporate investment banking managing directors.
One key metric we use to benchmark our firm to industry peer companies is the number of investment banking managing directors. At December 31, 2024, we had 183 corporate investment banking managing directors. Recruitment and Talent Development A core tenet of our talent system is to develop talent from within our company and to supplement with external candidates.
The Career Exploration Program and the Piper Sandler MBA Fellowship Program are designed to attract talented undergraduate students and MBA students, respectively, whose life experiences, demonstrated interests, and achievements will contribute to our commitment to DEI.
The Career Exploration Program and the Piper Sandler MBA Fellowship Program are designed to attract talented undergraduate students and MBA students, respectively, whose life experiences, demonstrated interests, and achievements will contribute to our culture. These programs serve as a direct pipeline for summer internship opportunities that have the potential to convert to full-time positions.
Investment Banking For our corporate clients and financial sponsors, we provide advisory services, which includes mergers and acquisitions ("M&A"); equity and debt private placements; and debt and restructuring advisory. We also help raise capital through equity and debt financings.
Investment Banking For our corporate clients and financial sponsors, we provide advisory services, which includes mergers and acquisitions ("M&A"); equity and debt financings; equity and debt private placements; and debt, restructuring and private capital advisory. We operate in the following focus sectors: healthcare; financial services; energy and power; consumer; services and industrials; technology; and chemicals, primarily focusing on middle-market clients.
Piper Sandler Companies | 4 Table of Contents Compensation and Benefits Program Our compensation program is designed to attract, reward and retain employees who possess the skills necessary to support our business objectives and assist in the achievement of our strategic goals.
Compensation and Benefits Program Our compensation program is designed to attract, reward and retain employees who possess the skills necessary to support our business objectives and assist in the achievement of our strategic goals. We provide employees with competitive compensation packages that include base salary, annual incentive bonuses, restricted share awards, and length of service awards.
We also have a talent and succession planning process, which is reviewed annually with our board of directors. Diversity, Equity and Inclusion ("DEI") We believe that diverse teams with unique backgrounds, skills and experiences yield more innovative solutions.
We also have a talent and succession planning process, which is reviewed annually with our board of directors.
Entities in the jurisdictions identified above are also subject to anti-money laundering regulations.
These authorities regulate these entities (in their respective jurisdictions) in areas of capital adequacy, customer protection and business conduct, among others. Entities in the jurisdictions identified above are also subject to anti-money laundering regulations.
The Financial Conduct Authority of the U.K. and the Hong Kong Securities and Futures Commission regulate these entities (in their respective jurisdictions) in areas of capital adequacy, customer protection and business conduct, among others. We also have a subsidiary organized in Guernsey and regulated by the Guernsey Financial Services Commission ("GFSC").
We also operate entities in various international jurisdictions, and these entities are subject to regulation by the relevant international authorities, including the Financial Conduct Authority of the U.K., the Hong Kong Securities and Futures Commission, the German Federal Financial Supervisory Authority, and the Guernsey Financial Services Commission ("GFSC").
In addition to cash and equity compensation, we offer benefits such as life and health (medical, dental and vision) insurance, paid time off, tuition reimbursement and a 401(k) plan. We also offer family support services, such as paid parental leave, fertility benefits and adoption assistance, as well as various health and wellness programs.
We also offer family support services, such as paid parental leave, fertility benefits and adoption assistance, as well as various health and wellness programs. We believe our programs align both individual employees and long-term company performance with shareholder interests.
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We operate in the following focus sectors: healthcare; financial services; energy and power; services and industrials; consumer; technology; and chemicals, primarily focusing on middle-market clients. For our government and non-profit clients, we underwrite municipal issuances, provide municipal financial advisory and loan placement services, and offer various over-the-counter derivative products.
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We believe that diverse teams with unique backgrounds, skills and experiences yield more innovative solutions. This is reflected in our commitment to engage, hire and retain bright, committed people to work in partnership in an environment that allows each person to achieve personal success and add value to our teams and communities.
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We believe our programs align both individual employees and long-term company performance with shareholder interests. Training and Development A core tenet of our talent system is to develop talent from within our company and to supplement with external candidates. We provide opportunities for employees to grow and build their careers through various training and development programs.
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Piper Sandler Companies | 4 Table of Contents We provide opportunities for employees to grow and build their careers through various training, mentorship and development programs. Additionally, our employee resource groups, which are open to all employees, help develop connections, build community and create opportunities for engagement.
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This is reflected in our commitment to engage, attract, retain and develop a diverse and talented workforce in a high-quality, equitable and inclusive environment.
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We launched a volunteer rewards program during 2024 that provides up to $1,000 of financial support to the causes where our employees volunteer their time.
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These programs, which consider all aspects of diversity during the selection process, serve as a direct pipeline for summer internship opportunities that have the potential to convert to full-time positions. We are focused on building an inclusive culture through a variety of initiatives supported by our DEI council, including mentorship and training.
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Piper Sandler Companies | 5 Table of Contents Our U.S. broker dealer subsidiary (Piper Sandler & Co.) is registered as a securities broker dealer with the SEC and is a member of various SROs and securities exchanges.
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Our employee resource groups also serve as a source of inclusion and engagement for our employees, in addition to supporting our efforts to recruit a diverse workforce.
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Our employee resource groups consist of Multicultural, Pride, Veterans, Women's, and Young Professionals networks, and each employee resource group is open to all employees and is sponsored and supported by senior leaders across the firm.
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Piper Sandler Companies | 5 Table of Contents The laws, rules and regulations comprising this regulatory framework can (and do) change frequently, as can the interpretation and enforcement of existing laws, rules and regulations.
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We also operate one entity that is authorized, licensed and regulated by the Financial Conduct Authority of the U.K. and registered under the laws of England and Wales, as well as an entity that is authorized, licensed and regulated by the Hong Kong Securities and Futures Commission and registered under the laws of Hong Kong.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the future, we may need to incur debt or issue equity in order to fund our working capital requirements, as well as to execute our growth initiatives that may include acquisitions and other investments. Similarly, our access to funding sources may be contingent upon terms and conditions that may limit or restrict our business activities and growth initiatives.
Biggest changeOur liquidity also could be impacted by the activities resulting in concentration of risk, including investments in specific markets or products without liquidity. In the future, we may need to incur debt or issue equity in order to fund our working capital requirements, as well as to execute our growth initiatives that may include acquisitions and other investments.
If, in connection with that test, we determine that a reporting unit's fair value is less than its carrying value, we would be required to recognize an impairment to the goodwill associated with that reporting unit. More generally, any difficulties that we experience could disrupt our ongoing business, increase our expenses and adversely affect our operating results and financial condition.
If, in connection with that test, we determine that a reporting unit's fair value is less than its carrying value, we would be required to recognize an impairment to the goodwill associated with the reporting unit. More generally, any difficulties that we experience could disrupt our ongoing business, increase our expenses and adversely affect our operating results and financial condition.
In addition, our asset management subsidiaries, PSC Capital Partners LLC, Piper Sandler Advisors LLC, Piper Heartland Healthcare Capital LLC and Piper Sandler Finance Management LLC, as well as Piper Sandler & Co., are registered as investment advisors with the SEC and are subject to the regulation and oversight by the SEC, and we have an additional asset management subsidiary subject to regulation in Guernsey.
In addition, our asset management subsidiaries, PSC Capital Partners LLC, Piper Heartland Healthcare Capital LLC and Piper Sandler Finance Management LLC, as well as Piper Sandler & Co., are registered as investment advisors with the SEC and are subject to the regulation and oversight by the SEC, and we have an additional asset management subsidiary subject to regulation in Guernsey.
Federal Reserve with respect to interest rates, or the efficacy or adequacy of government measures enacted to support the U.S. and global economy, could erode the outlook for macroeconomic conditions, economic growth, and business confidence, which would negatively impact our businesses. • Our equities investment banking revenues from our advisory and equity capital markets businesses are directly related to macroeconomic conditions and corresponding financial market activity.
Federal Reserve with respect to interest rates, or the efficacy or adequacy of government measures enacted to support the U.S. and global economy, could erode the outlook for macroeconomic conditions, economic growth, and business confidence, which would negatively impact our businesses. • Our investment banking revenues from our advisory and equity capital markets businesses are directly related to macroeconomic conditions and corresponding financial market activity.
For example: • Our equities investment banking business focuses on specific sectors, including healthcare, financial services, energy and power, services and industrials, consumer, technology, and chemicals. Volatility, uncertainty, or slowdowns in any of these sectors may adversely affect our business, sometimes disproportionately, and may cause volatility in the net revenues we receive from our corporate advisory and capital markets activities.
For example: • Our investment banking business focuses on specific sectors, including healthcare, financial services, energy and power, consumer, services and industrials, technology, and chemicals. Volatility, uncertainty, or slowdowns in any of these sectors may adversely affect our business, sometimes disproportionately, and may cause volatility in the net revenues we receive from our corporate advisory and capital markets activities.
Both the healthcare and financial services sectors are significant contributors to our overall results, and negative developments in either of these sectors, including negative developments that result from legislative or regulatory actions, would materially and disproportionately impact our equities investment banking results, even if general economic conditions were strong.
Both the healthcare and financial services sectors are significant contributors to our overall results, and negative developments in either of these sectors, including negative developments that result from legislative or regulatory actions, would materially and disproportionately impact our investment banking results, even if general economic conditions were strong.
As an example, a significant portion of our equities investment banking revenues in recent years has been derived from advisory and capital markets engagements in our focus sectors and from financial sponsor clients, and activity in these areas is highly correlated to market conditions and the macroeconomic environment.
As an example, a significant portion of our investment banking revenues in recent years has been derived from advisory and capital markets engagements in our focus sectors and from financial sponsor clients, and activity in these areas is highly correlated to market conditions and the macroeconomic environment.
Specifically, our operating subsidiaries include broker dealer and related securities entities organized in the U.S., the U.K., and Hong Kong. Each of these entities is registered or licensed with the applicable local regulator and is subject to all the applicable rules and regulations promulgated by those authorities.
Specifically, our operating subsidiaries include broker dealer and related securities entities organized in the U.S., the U.K., Germany, and Hong Kong. Each of these entities is registered or licensed with the applicable local regulator and is subject to all the applicable rules and regulations promulgated by those authorities.
Our operating results for our fixed income institutional business may not correlate with the results of other firms or the fixed income market generally because we do not participate in significant segments of the fixed income markets such as credit default swaps, corporate high-yield bonds, currencies or commodities.
Our operating results for our fixed income institutional brokerage business may not correlate with the results of other firms or the fixed income market generally because we do not participate in significant segments of the fixed income markets such as credit default swaps, corporate high-yield bonds, currencies or commodities.
More generally, because our business is closely correlated to the macroeconomic outlook, a significant deterioration in that outlook or an exogenous shock would likely have an immediate and significant negative impact on our equities investment banking business and our overall results of operations.
More generally, because our business is closely correlated to the macroeconomic outlook, a significant deterioration in that outlook or an exogenous shock would likely have an immediate and significant negative impact on our investment banking business and our overall results of operations.
In addition, market volatility or uncertainty related to a decline in the U.S. or global macroeconomic outlook could cause financial market activity to decrease, which would also negatively affect our equities investment banking revenues.
In addition, market volatility or uncertainty related to a decline in the U.S. or global macroeconomic outlook could cause financial market activity to decrease, which would also negatively affect our investment banking revenues.
Our client activity in the fixed income institutional business is currently concentrated in the depositories sector. Financing and advisory services engagements are transactional in nature and do not generally provide for subsequent engagements.
Our client activity in the fixed income institutional brokerage business is currently concentrated in the depositories sector. Financing and advisory services engagements are transactional in nature and do not generally provide for subsequent engagements.
Therefore, actual results could differ from our estimates and that difference could have a material effect on our consolidated financial statements. With respect to accounting for goodwill and intangible assets, we complete our annual goodwill and intangible asset impairment testing in the fourth quarter of each year (or earlier if impairment indicators are present).
Therefore, actual results could differ from our estimates and that difference could have a material effect on our consolidated financial statements. With respect to accounting for goodwill and intangible assets, we complete our annual goodwill and indefinite-lived intangible asset impairment testing in the fourth quarter of each year (or earlier if impairment indicators are present).
It is difficult to predict the economic and market conditions for 2024, which are dependent upon global and U.S. economic conditions and geopolitical events globally. Our smaller scale and the cyclical nature of the economy and the financial services industry leads to volatility in our financial results, including our operating margins, compensation ratios, business mix, and revenue and expense levels.
It is difficult to predict the economic and market conditions for 2025, which are dependent upon global and U.S. economic conditions and geopolitical events globally. Our smaller scale and the cyclical nature of the economy and the financial services industry leads to volatility in our financial results, including our operating margins, compensation ratios, business mix, and revenue and expense levels.
It focuses on investment banking activity in sectors that include state and local governments, cultural and social service non-profit entities, special districts, project finance, and the education, healthcare, hospitality, senior living, housing and transportation sectors, with an emphasis on transactions with a par value of $500 million or less.
It focuses on investment banking activity in sectors that include state and local governments, cultural and social service non-profit entities, special districts and development infrastructure, project finance, and the education, healthcare, hospitality, senior living, housing and transportation sectors, with an emphasis on transactions with a par value of $500 million or less.
Our equities investment banking business overall, but especially our capital markets business, benefits from cycles of strong financial market activity and company valuations.
Our investment banking business overall, but especially our capital markets business, benefits from cycles of strong financial market activity and company valuations.
Widespread concern or doubts in the market about U.S. or global economic conditions, the potential for financial contagion or widespread corporate or government defaults, the U.S. presidential election, the possibility of the broader outbreak of armed conflict in the Middle East or Eastern Europe, geopolitical tensions concerning Taiwan, or the pace, impact, or effectiveness of the actions by the U.S.
Widespread concern or doubts in the market about U.S. or global economic conditions, the potential for financial contagion or widespread corporate or government defaults, the possibility of the broader outbreak of armed conflict in the Middle East or Eastern Europe, geopolitical tensions concerning Taiwan, or the pace, impact, or effectiveness of the actions by the U.S.
With respect to risk management, we enter into derivative contracts to hedge interest rate and market value risks associated with our security positions, including fixed income inventory positions that we hold for facilitating client activity. Generally, we do not hedge all of our interest rate risk.
With respect to risk management, we enter into derivative contracts to hedge interest rate, market value and credit spread risks associated with our security positions, including fixed income inventory positions that we hold for facilitating client activity. Generally, we do not hedge all of our interest rate risk.
In addition, our public finance banking business is currently concentrated in the middle market, and to the extent that market conditions for our clients results in lower activity as compared to larger issuers, our results of operations will be negatively impacted. • Our fixed income institutional business derives its revenue from sales and trading activity in the municipal and taxable markets and from hybrid preferreds and U.S. government agency products.
In addition, our public finance banking business is currently concentrated in the middle market, and to the extent that market conditions for our clients results in lower activity as compared to larger issuers, our results of operations will be negatively impacted. • Our fixed income institutional brokerage business derives its revenue from sales and trading activity in the municipal and taxable markets and from U.S. government agency products.
We have an ongoing need to upgrade and improve our various technology systems, including our data and transaction processing, financial, accounting, risk management, compliance, and trading systems. This need could present operational issues or require significant capital spending.
We have an ongoing need to upgrade and improve our various technology systems, including our data and transaction processing, financial, risk management, human capital, compliance, and trading systems. This need could present operational issues or require significant capital spending.
In addition, when we acquire a business, a substantial portion of the purchase price is often allocated to goodwill and other identifiable intangible assets. Our goodwill and intangible assets are tested at least annually for impairment.
In addition, when we acquire a business, a substantial portion of the purchase price is often allocated to goodwill and other identifiable intangible assets. Our goodwill and indefinite-lived intangible assets are tested at least annually for impairment.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2023.
We are in compliance with Section 404 of the Sarbanes-Oxley Act as of December 31, 2024.
A failure to protect our computer systems, networks and information, and our clients' information, against cyber attacks, data breaches, and similar threats could impair our ability to conduct our businesses, result in the disclosure, theft or destruction of confidential information, damage our reputation and cause significant financial and legal exposure.
Piper Sandler Companies | 17 Table of Contents A failure to protect our computer systems, networks and information, and our clients' information, against cyber attacks, data breaches, and similar threats could impair our ability to conduct our businesses, result in the disclosure, theft or destruction of confidential information, damage our reputation and cause significant financial and legal exposure.
In addition, there is a risk that encryption and other protective measures, despite their sophistication, may be defeated, particularly to the extent that new computing technologies vastly increase the speed and computing power available. Risk management processes may not fully mitigate exposure to the various risks that we face.
In addition, there is a risk that encryption and other protective measures, despite their sophistication, may be defeated, particularly to the extent that new computing technologies vastly increase the speed and computing power available. Piper Sandler Companies | 18 Table of Contents Risk management processes may not fully mitigate exposure to the various risks that we face.
Piper Sandler Companies | 19 Table of Contents LEGAL AND REGULATORY RISK Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and the loss to our reputation we may suffer as a result of failure to comply with laws, regulations, rules, related SRO standards and codes of conduct applicable to our business activities.
LEGAL AND REGULATORY RISK Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and the loss to our reputation we may suffer as a result of failure to comply with laws, regulations, rules, related SRO standards and codes of conduct applicable to our business activities.
Piper Sandler Companies | 18 Table of Contents Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks have been and may be vulnerable to unauthorized access, misuse, computer viruses or other malicious code and other events that could have a security impact.
Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks have been and may be vulnerable to unauthorized access, misuse, computer viruses or other malicious code and other events that could have a security impact.
Our business is subject to extensive regulation in the jurisdictions in which we operate, and a significant regulatory action against our company may have a material adverse financial effect on, cause significant reputational harm to, or result in other collateral consequences for our company.
Piper Sandler Companies | 19 Table of Contents Our business is subject to extensive regulation in the jurisdictions in which we operate, and a significant regulatory action against our company may have a material adverse financial effect on, cause significant reputational harm to, or result in other collateral consequences for our company.
Concentration of risk may result in losses to us even when economic and market conditions are generally favorable for others in our industry. Piper Sandler Companies | 15 Table of Contents An inability to readily divest trading positions may result in financial losses to our business.
Concentration of risk may result in losses to us even when economic and market conditions are generally favorable for others in our industry. An inability to readily divest trading positions may result in financial losses to our business.
Our liquidity may also be impacted if we choose to facilitate liquidity for specific products and voluntarily increase our inventory positions in order to do so, exposing ourselves to greater market risk and potential financial losses from the reduction in value of illiquid positions. Our underwriting and alternative asset management activities expose us to risk of loss.
Our liquidity may also be impacted if we choose to facilitate liquidity for specific products and voluntarily increase our inventory positions in order to do so, exposing ourselves to greater market risk and potential financial losses from the reduction in value of illiquid positions.
Piper Sandler Companies | 17 Table of Contents Protection of our sensitive and confidential information is critical to our operations, and failure of those systems may disrupt our business, damage our reputation, and cause financial losses. Our clients routinely provide us with sensitive and confidential information.
Protection of our sensitive and confidential information is critical to our operations, and failure of those systems may disrupt our business, damage our reputation, and cause financial losses. Our clients routinely provide us with sensitive and confidential information.
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 economic conditions and financial market activity. For example: • In 2023, our business continued to be impacted by the U.S.
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 economic conditions and financial market activity.
Particular activities or products within our business expose us to increased credit risk, including inventory positions, nonstandard settlements, interest rate swap contracts with customer credit exposure, counterparty risk with one major financial institution related to customer interest rate swap contracts without customer credit exposure, investment banking and advisory fee receivables, liquidity providers on variable rate demand notes we remarket, and similar activities.
Particular activities or products within our business expose us to increased credit risk, including inventory positions, non-standard settlements, interest rate swap contracts with customer credit exposure, investment banking and advisory fee receivables, installment fee receivables related to private fund placement services, liquidity providers on variable rate demand notes we remarket, and similar activities.
However, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our company and our shareholders. Item 1B. Unresolved Staff Comments. None. Piper Sandler Companies | 22 Table of Contents
However, these provisions apply even if the offer may be considered beneficial by some shareholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our company and our shareholders.
We operate under a fully disclosed model for all of our client clearing activities and for all of our securities inventories with the exception of convertible securities. In a fully disclosed model, we act as an introducing broker for most customer transactions and rely on a clearing broker dealer to handle clearance and settlement of our customers' securities transactions.
In a fully disclosed model, we act as an introducing broker for most customer transactions and rely on a clearing broker dealer to handle clearance and settlement of our customers' securities transactions.
Piper Sandler Companies | 16 Table of Contents OPERATIONAL RISK Operational risk is the risk of loss, or damage to our reputation, resulting from inadequate or failed processes, people and systems or from external events. Such loss or reputational damage could negatively impact our future financial condition and results of operations.
OPERATIONAL RISK Operational risk is the risk of loss, or damage to our reputation, resulting from inadequate or failed processes, people and systems or from external events. Such loss or reputational damage could negatively impact our future financial condition and results of operations. The following are material operational risk factors that could pose a risk to us.
We believe that the trajectory of market conditions in 2024 will be dependent on several factors, including a continued moderation of the pace of inflation, whether the U.S.
Federal Reserve policy and the potential for a resurgence of inflation. We believe that the trajectory of market conditions in 2025 will be dependent on several factors, including a continued moderation of the pace of inflation, the ability of the U.S.
These laws generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments to foreign officials for the purpose of obtaining or retaining business or gaining an unfair business advantage.
In addition, our international operations require compliance with anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. These laws generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments to foreign officials for the purpose of obtaining or retaining business or gaining an unfair business advantage.
We engage in a variety of activities in which we commit or invest our own capital, including underwriting and alternative asset management.
Piper Sandler Companies | 15 Table of Contents Our underwriting and alternative asset management activities expose us to risk of loss. We engage in a variety of activities in which we commit or invest our own capital, including underwriting and alternative asset management.
The following are material operational risk factors that could pose a risk to us. Our information and technology systems, including outsourced systems, are critical components of our operations, and failure of those systems or other aspects of our operations infrastructure may disrupt our business, cause financial loss and constrain our growth.
Our information and technology systems, including outsourced systems, are critical components of our operations, and failure of those systems or other aspects of our operations infrastructure may disrupt our business, cause financial loss and constrain our growth. We typically transact thousands of securities trades on a daily basis across multiple markets.
We typically transact thousands of securities trades on a daily basis across multiple markets. Our data and transaction processing, financial, accounting and other technology and operating systems are essential to this task.
Our data and transaction processing, financial, accounting and other technology and operating systems are essential to this task.
If the outlook for macroeconomic conditions in 2024 were to remain depressed, or deteriorate further, the level of financial market activity could continue to decrease, which would reduce our equities investment banking revenues more generally.
During periods of heightened economic uncertainty, financial market activity can significantly decline, and our business may suffer reduced revenues as a result. If the outlook for macroeconomic conditions in 2025 were to deteriorate, the level of financial market activity could significantly decrease, which would reduce our investment banking revenues more generally.
Federal Reserve is able to cut interest rates, whether the U.S. economy enters a recession and its magnitude and duration, and the effects of macroeconomic or political uncertainty in the U.S. or abroad.
Federal Reserve to continue to cut interest rates, the effects of, or market uncertainty concerning the effects of tariffs, tax, regulatory and other policies of the new U.S. presidential administration, and the effects of macroeconomic or political uncertainty in the U.S. or abroad.
In December 2023, we renewed our unsecured revolving credit facility and increased the size from $75 million to $100 million to use for working capital and general corporate purposes. We also renewed our committed line in December 2023 for an additional twelve months and decreased the size from $80 million to $50 million.
In 2024, we renewed our unsecured revolving credit facility and increased the size from $100 million to $120 million to use for working capital and general corporate purposes. On August 23, 2024, we entered into a $30 million secured revolving credit facility related to our private capital advisory business.
For example, in 2023, we disclosed ongoing investigations by the SEC and the Commodity Futures Trading Commission (the "CFTC") regarding our compliance with recordkeeping requirements for business-related communications sent over unapproved electronic messaging channels. In addition, we and our employees could be fined or otherwise disciplined for violations or prohibited from engaging in some of our business activities.
In addition, we and our employees could be fined or otherwise disciplined for violations or prohibited from engaging in some of our business activities.
Removed
Federal Reserve's efforts to reduce inflation. Although market volatility trended lower, equity indices saw a significant rally as the pace of inflation fell, and the U.S. economy remained relatively resilient, overall financial market activity remained subdued compared to historical levels. During the first half of the year, the U.S.
Added
For example: • In 2024, our business generally benefited from continued U.S. economic strength and moderation in the pace of inflation, which led to an increase in business and client activity. Nevertheless, overall financial market activity continued to remain somewhat subdued compared to historical levels due to uncertainty concerning future U.S.
Removed
Federal Reserve raised rates four times, which brought the fed funds rate to a 22-year high. These higher interest rates, persistent inflation, and tightened lending standards following two high-profile bank failures in the first quarter of 2023 contributed to macroeconomic uncertainty and muted client activity across our businesses, including advisory, equity capital markets, fixed income institutional brokerage, and public finance.
Added
Challenging market conditions for these sectors that are disproportionately worse than those impacting the broader economy or municipal markets generally may adversely impact our business.
Removed
During periods of heightened economic uncertainty, financial market activity can significantly decline, as we experienced in 2023, and our business may suffer reduced revenues as a result.
Added
Further, the enactment, or the threat of enactment, of any legislation that alters the financing alternatives available to local or state governments or tax-exempt organizations through the elimination or reduction of tax-exempt bonds could have a negative impact on our results of operations in these businesses.
Removed
In 2023, the financial services sector suffered a significant decline in activity following two high-profile bank failures, which negatively impacted our results of operations.
Added
We elected not to renew our one-year $50 million committed revolving secured credit facility, which terminated on December 6, 2024.
Removed
Both refunding and specialty high-yield new issuances have contributed a significant portion of our public finance investment banking revenues in recent years. During 2023, higher nominal rates and interest rate volatility had a disproportionately negative impact on the level of refunding issuances and investor demand for high-yield products as compared to other municipal issuances, which impacted our results of operations.
Added
Similarly, our access to funding sources may be contingent upon terms and conditions that may limit or restrict our business activities and growth initiatives.
Removed
To the extent that those conditions continue or worsen in 2024, and to the extent that there is concern about U.S. economic growth, refunding activity and high-yield sectors may continue to be disproportionately affected, which would impact our results of operations.
Added
Piper Sandler Companies | 16 Table of Contents We operate under a fully disclosed model for all of our client clearing activities and for all of our securities inventories with the exception of convertible securities.
Removed
Our liquidity also could be impacted by the activities resulting in concentration of risk, including investments in specific markets or products without liquidity. Our access to funds also may be impaired if regulatory authorities take significant action against us, or if we discover that one of our employees has engaged in serious unauthorized or illegal activity.
Removed
With respect to interest rate swap contracts with customer credit exposure, we have retained the credit exposure with four non-publicly rated counterparties totaling $6.7 million at December 31, 2023 as part of our matched-book interest rate swap program. In the event of a termination of the contract, the counterparty would owe us the applicable amount of the credit exposure.
Removed
If our counterparty is unable to make its payment to us, we would still be obligated to pay our hedging counterparty, resulting in credit losses.
Removed
For example, the effect of Brexit is still developing and could require us to obtain additional regulatory licenses or impose additional restrictions on our ability to conduct business in Europe. In addition, our international operations require compliance with anti-bribery and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeExamples of our engagement with consultants include external penetration testing, application security assessment and cybersecurity incident response tabletop exercises. Our third-party vendor management program has a tiered approach to assess vendors based on risk profile. We review each third-party vendor’s architectures, security practices and data flows, and integrate stringent contractual terms encompassing breach notifications and other security requirements.
Biggest changeOur third-party vendor management program has a tiered approach to assess vendors based on risk profile. We review each third-party vendor’s architectures, security practices and data flows, and integrate stringent contractual terms encompassing breach notifications and other security requirements. The risk profiles associated with our service level agreements are monitored by senior employees in our information security and technology departments.
Our chief information and operations officer is a member of our leadership team and has been in this role for 15 years. With more than 25 years of experience in information technology in the investment banking industry, he is responsible for overseeing more than 100 employees in our information security and technology departments who possess relevant educational and industry experience.
Our chief information and operations officer is a member of our leadership team and has been in this role since 2008. With more than 25 years of experience in information technology in the investment banking industry, he is responsible for overseeing more than 100 employees in our information security and technology departments who possess relevant educational and industry experience.
In addition, to promote a company-wide culture of cybersecurity risk management, we conduct regular phishing email simulations for employees to enhance awareness and responsiveness to possible threats and other kinds of preparedness training. We also require all employees to complete an annual cybersecurity and privacy awareness training.
In 2024, our board of directors also participated in the cybersecurity incident response tabletop exercise. In addition, to promote a company-wide culture of cybersecurity risk management, we conduct regular phishing email simulations for employees to enhance awareness and responsiveness to possible threats and other kinds of preparedness training.
Our information and cybersecurity program utilizes the National Institute of Standards and Technology ("NIST") Cybersecurity Framework, and our security controls are mapped to the NIST Cybersecurity Framework to ensure alignment with recognized industry best practices. Annually, we engage a third-party consultant to conduct an assessment of the effectiveness of our information and cybersecurity program against the NIST Cybersecurity Framework.
Our information and cybersecurity program utilizes the National Institute of Standards and Technology ("NIST") Cybersecurity Framework 2.0, and our security controls are mapped to the NIST Cybersecurity Framework 2.0 to ensure alignment with recognized industry best practices.
The risk profiles associated with our service level agreements are monitored by senior employees in our information security and technology departments. Our vendor management program also includes an annual reassessment of the risk profile of each vendor and interim vendor reviews are completed if service alterations occur.
Our vendor management program also includes an annual reassessment of the risk profile of each vendor and interim vendor reviews are completed if service alterations occur.
This assessment is reviewed with the audit committee, and opportunities for further maturation are incorporated into our information and cybersecurity roadmap. Additionally, we regularly engage consultants and other third parties to evaluate specific priority areas of our information and cybersecurity program based on our assessment of the current cybersecurity threat landscape.
Additionally, we regularly engage consultants and other third parties to evaluate specific priority areas of our information and cybersecurity program based on our assessment of the current cybersecurity threat landscape. Examples of our engagement with consultants include external penetration testing, application security assessment and cybersecurity incident response tabletop exercises.
Added
Annually, we engage a third-party consultant to conduct an assessment of the effectiveness of our information and cybersecurity program against the NIST Cybersecurity Framework 2.0. This assessment is reviewed with the audit committee, and opportunities for further maturation are incorporated into our information and cybersecurity roadmap.
Added
We also require all employees to complete an annual cybersecurity and privacy awareness training.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. As of February 20, 2024, we conducted our operations through 59 principal offices in 31 states, and the District of Columbia, and in London, Aberdeen and Hong Kong. All of our offices are leased.
Biggest changeItem 2. Properties. As of February 20, 2025, we conducted our operations through 53 principal offices in 30 states, and the District of Columbia, and in London, Aberdeen, Munich, Paris, Zurich and Hong Kong. All of our offices are leased.
Our principal executive office is located at 800 Nicollet Mall, Suite 900, Minneapolis, Minnesota 55402 and, as of February 20, 2024 , comprises approximately 124,000 square feet of space under a lease which expires November 30, 2025.
Our principal executive office is located at 800 Nicollet Mall, Suite 900, Minneapolis, Minnesota 55402 and, as of February 20, 2025, comprises approximately 124,000 square feet of space under a lease which expires November 30, 2025.
In December 2022, we entered into a 15-year lease agreement which comprises approximately 113,000 square feet of space for our future principal executive office located at 350 N. 5th Street, Minneapolis, Minnesota 55401. Item 3. Legal Proceedings.
In December 2022, we entered into a 15-year lease agreement which comprises approximately 120,000 square feet of space for our future principal executive office located at 350 N. 5th Street, Minneapolis, Minnesota 55401.
Removed
The discussion of our legal proceedings contained in Note 16 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. Piper Sandler Companies | 24 Table of Contents Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. M ine S af ety D isclos ures 24 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 27 Item 7. M anagement ' s D iscussion and A nalysis of F inancial C ondition and R esu lts of O perations 28
Biggest changeItem 4. Mine Safety Disclosures 24 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 27 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 54 Item 8.
Added
Financial Statements and Supplementary Data 55 Management's Report on Internal Control Over Financial Reporting 55 Reports of Independent Registered Public Accounting Firm (PCAOB ID 42 ) 56 Consolidated Financial Statements 59 Notes to the Consolidated Financial Statements 64 Supplementary Data 108

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePiper Sandler Companies | 25 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The table below sets forth the information with respect to purchases made by or on behalf of Piper Sandler Companies or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the quarter ended December 31, 2023: Total Number of Shares Approximate Dollar Purchased as Part of Value of Shares Yet to be Total Number of Average Price Publicly Announced Purchased Under the Period Shares Purchased Paid per Share Plans or Programs Plans or Programs (1) Month #1 October 1, 2023 to October 31, 2023 14,088 $ 144.13 — $ 138 million Month #2 November 1, 2023 to November 30, 2023 1,787 $ 152.51 — $ 138 million Month #3 December 1, 2023 to December 31, 2023 4,326 $ 174.87 — $ 138 million Total 20,201 $ 151.45 — $ 138 million (1) Effective May 6, 2022, our board of directors authorized the repurchase of up to $150.0 million of common stock through December 31, 2024.
Biggest changePiper Sandler Companies | 25 Table of Contents ISSUER PURCHASES OF EQUITY SECURITIES The table below sets forth the information with respect to purchases made by or on behalf of Piper Sandler Companies or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the quarter ended December 31, 2024: Total Number of Shares Approximate Dollar Purchased as Part of Value of Shares Yet to be Total Number of Average Price Publicly Announced Purchased Under the Period Shares Purchased Paid per Share Plans or Programs Plans or Programs (1) Month #1 October 1, 2024 to October 31, 2024 17,253 $ 286.34 — $ 138 million Month #2 November 1, 2024 to November 30, 2024 2,913 $ 336.32 — $ 138 million Month #3 December 1, 2024 to December 31, 2024 1,787 $ 299.95 — $ 138 million Total 21,953 $ 294.08 — $ 138 million (1) Effective May 6, 2022, our board of directors authorized the repurchase of up to $150.0 million of common stock, which expired on December 31, 2024.
Restrictions on our U.S. broker dealer subsidiary's ability to pay dividends are described in Note 24 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Restrictions on our U.S. broker dealer subsidiary's ability to pay dividends are described in Note 23 to the consolidated financial statements included in Part II, Item 8 of this Form 10-K.
DIVIDEND POLICY Our board of directors has approved a dividend policy with the intention of returning between 30 percent and 50 percent of our fiscal year adjusted net income to shareholders. Our board of directors has declared a special cash dividend on our common stock of $1.00 per share related to 2023 adjusted net income.
DIVIDEND POLICY Our board of directors has approved a dividend policy with the intention of returning between 30 percent and 50 percent of our fiscal year adjusted net income to shareholders. Our board of directors has declared a special cash dividend on our common stock of $3.00 per share related to 2024 adjusted net income.
In addition, our board of directors has declared a quarterly cash dividend on our common stock of $0.60 per share to be paid on March 15, 2024, to shareholders of record as of the close of business on March 4, 2024. Our board of directors is free to change our dividend policy at any time.
In addition, our board of directors has declared a quarterly cash dividend on our common stock of $0.65 per share to be paid on March 14, 2025, to shareholders of record as of the close of business on March 4, 2025. Our board of directors is free to change our dividend policy at any time.
The graph assumes $100 was invested on December 31, 2018 in each of our common stock, the S&P 500 Index and the S&P 500 Diversified Financials Index, and that all dividends were reinvested on the date of payment without payment of any commissions.
The graph assumes $100 was invested on December 31, 2019 in each of our common stock, the S&P 500 Index and the S&P 500 Financial Services Index, and that all dividends were reinvested on the date of payment without payment of any commissions.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION Our common stock is listed on the New York Stock Exchange under the symbol "PIPR." SHAREHOLDERS We had 8,473 shareholders of record and approximately 47,559 beneficial owners of our common stock as of February 20, 2024.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION Our common stock is listed on the New York Stock Exchange under the symbol "PIPR." SHAREHOLDERS We had 8,078 shareholders of record and approximately 64,372 beneficial owners of our common stock as of February 20, 2025.
This special dividend will be paid on March 15, 2024, to shareholders of record as of the close of business on March 4, 2024. Including this special cash dividend, we will have returned $3.40 per share, or approximately 37 percent of our fiscal year 2023 adjusted net income to shareholders.
This special dividend will be paid on March 14, 2025, to shareholders of record as of the close of business on March 4, 2025. Including this special cash dividend, we will have returned $5.50 per share, or approximately 43 percent of our fiscal year 2024 adjusted net income to shareholders.
The following graph compares the performance of an investment in our common stock from December 31, 2018 through December 31, 2023, with the S&P 500 Index and the S&P 500 Diversified Financials Index.
The following graph compares the performance of an investment in our common stock from December 31, 2019 through December 31, 2024, with the S&P 500 Index and the S&P 500 Financial Services Index.
Removed
Five Year Total Return Company/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Piper Sandler Companies $ 100 $ 123.88 $ 160.60 $ 297.64 $ 227.96 $ 314.08 S&P 500 Index 100 131.49 155.68 200.37 164.08 207.21 S&P 500 Diversified Financials 100 124.57 138.73 188.49 167.25 193.24
Added
Effective February 5, 2025 , our board of directors authorized the repurchase of up to $150.0 million in common shares through December 31, 2026 .
Added
Five Year Total Return Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Piper Sandler Companies $ 100 $ 129.64 $ 240.26 $ 184.02 $ 253.53 $ 441.76 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 S&P 500 Financial Services Index 100 111.36 151.31 134.26 155.12 199.14

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

146 edited+41 added−65 removed105 unchanged
Biggest changeGAAP basis and the results of our operations as a percentage of net revenues for the periods indicated: As a Percentage of Net Revenues for the Year Ended December 31, Year Ended December 31, 2023 2022 (Amounts in thousands) 2023 2022 2021 v2022 v2021 2023 2022 2021 Revenues Investment banking $ 923,812 $ 1,009,509 $ 1,553,219 (8.5) % (35.0) % 68.5 % 70.8 % 76.5 % Institutional brokerage 377,539 405,267 387,577 (6.8) 4.6 28.0 28.4 19.1 Interest income 26,723 20,365 6,967 31.2 192.3 2.0 1.4 0.3 Investment income/(loss) 30,039 (23) 94,032 N/M N/M 2.2 0.0 4.6 Total revenues 1,358,113 1,435,118 2,041,795 (5.4) (29.7) 100.8 100.7 100.5 Interest expense 10,146 9,480 10,734 7.0 (11.7) 0.8 0.7 0.5 Net revenues 1,347,967 1,425,638 2,031,061 (5.4) (29.8) 100.0 100.0 100.0 Non-interest expenses Compensation and benefits 897,034 983,524 1,305,166 (8.8) (24.6) 66.5 69.0 64.3 Outside services 51,754 53,189 45,942 (2.7) 15.8 3.8 3.7 2.3 Occupancy and equipment 64,356 64,252 56,946 0.2 12.8 4.8 4.5 2.8 Communications 52,718 50,565 44,008 4.3 14.9 3.9 3.5 2.2 Marketing and business development 37,734 42,849 20,902 (11.9) 105.0 2.8 3.0 1.0 Deal-related expenses 28,189 31,874 42,921 (11.6) (25.7) 2.1 2.2 2.1 Trade execution and clearance 19,972 20,185 16,533 (1.1) 22.1 1.5 1.4 0.8 Restructuring and integration costs 7,749 11,440 4,724 (32.3) 142.2 0.6 0.8 0.2 Intangible asset amortization 19,440 15,375 30,080 26.4 (48.9) 1.4 1.1 1.5 Other operating expenses 46,435 18,016 22,327 157.7 (19.3) 3.4 1.3 1.1 Total non-interest expenses 1,225,381 1,291,269 1,589,549 (5.1) (18.8) 90.9 90.6 78.3 Income before income tax expense 122,586 134,369 441,512 (8.8) (69.6) 9.1 9.4 21.7 Income tax expense 23,613 33,189 111,144 (28.9) (70.1) 1.8 2.3 5.5 Net income 98,973 101,180 330,368 (2.2) (69.4) 7.3 7.1 16.3 Net income/(loss) attributable to noncontrolling interests 13,482 (9,494) 51,854 N/M N/M 1.0 (0.7) 2.6 Net income attributable to Piper Sandler Companies $ 85,491 $ 110,674 $ 278,514 (22.8) (60.3) 6.3 7.8 13.7 N/M — Not meaningful Piper Sandler Companies | 35 Table of Contents For the year ended December 31, 2023, we recorded net income attributable to Piper Sandler Companies of $85.5 million.
Biggest changePiper Sandler Companies | 32 Table of Contents RESULTS OF OPERATIONS The following table provides a summary of the results of our operations and the results of our operations as a percentage of net revenues for the periods indicated: As a Percentage of Net Revenues for the Year Ended December 31, Year Ended December 31, 2024 2023 (Amounts in thousands) 2024 2023 2022 v2023 v2022 2024 2023 2022 Revenues Investment banking: Advisory services $ 808,746 $ 709,316 $ 776,428 14.0 % (8.6) % 53.0 % 52.6 % 54.5 % Corporate financing 173,876 131,077 125,342 32.7 4.6 11.4 9.7 8.8 Municipal financing 122,513 83,419 107,739 46.9 (22.6) 8.0 6.2 7.6 Total investment banking 1,105,135 923,812 1,009,509 19.6 (8.5) 72.4 68.5 70.8 Institutional brokerage: Equity brokerage 215,275 209,512 210,314 2.8 (0.4) 14.1 15.5 14.8 Fixed income services 186,167 168,027 194,953 10.8 (13.8) 12.2 12.5 13.7 Total institutional brokerage 401,442 377,539 405,267 6.3 (6.8) 26.3 28.0 28.4 Interest income 32,908 26,723 20,365 23.1 31.2 2.2 2.0 1.4 Investment income/(loss) (7,890) 30,039 (23) N/M N/M (0.5) 2.2 0.0 Total revenues 1,531,595 1,358,113 1,435,118 12.8 (5.4) 100.4 100.8 100.7 Interest expense 5,681 10,146 9,480 (44.0) 7.0 0.4 0.8 0.7 Net revenues 1,525,914 1,347,967 1,425,638 13.2 (5.4) 100.0 100.0 100.0 Non-interest expenses Compensation and benefits 1,004,173 897,034 983,524 11.9 (8.8) 65.8 66.5 69.0 Outside services 55,756 51,754 53,189 7.7 (2.7) 3.7 3.8 3.7 Occupancy and equipment 66,530 64,356 64,252 3.4 0.2 4.4 4.8 4.5 Communications 54,917 52,718 50,565 4.2 4.3 3.6 3.9 3.5 Marketing and business development 42,239 37,734 42,849 11.9 (11.9) 2.8 2.8 3.0 Deal-related expenses 30,491 28,189 31,874 8.2 (11.6) 2.0 2.1 2.2 Trade execution and clearance 19,836 19,972 20,185 (0.7) (1.1) 1.3 1.5 1.4 Restructuring and integration costs 2,586 7,749 11,440 (66.6) (32.3) 0.2 0.6 0.8 Intangible asset amortization 10,288 19,440 15,375 (47.1) 26.4 0.7 1.4 1.1 Other operating expenses 20,686 46,435 18,016 (55.5) 157.7 1.4 3.4 1.3 Total non-interest expenses 1,307,502 1,225,381 1,291,269 6.7 (5.1) 85.7 90.9 90.6 Income before income tax expense 218,412 122,586 134,369 78.2 (8.8) 14.3 9.1 9.4 Income tax expense 60,972 23,613 33,189 158.2 (28.9) 4.0 1.8 2.3 Net income 157,440 98,973 101,180 59.1 (2.2) 10.3 7.3 7.1 Net income/(loss) attributable to noncontrolling interests (23,674) 13,482 (9,494) N/M N/M (1.6) 1.0 (0.7) Net income attributable to Piper Sandler Companies $ 181,114 $ 85,491 $ 110,674 111.9 (22.8) 11.9 6.3 7.8 N/M — Not meaningful Piper Sandler Companies | 33 Table of Contents Net Revenues Net revenues on a U.S.
Income Taxes For the year ended December 31, 2023, our provision for income taxes was $23.6 million, which included $16.6 million of tax benefits related to stock-based compensation awards vesting at values greater than the grant price and accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
For the year ended December 31, 2023, our provision for income taxes was $23.6 million, which included $16.6 million of tax benefits related to stock-based compensation awards vesting at values greater than the grant price and accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
Conversely, if deductions reported on our tax return for stock-based compensation are less than the cumulative cost of those instruments recognized for financial reporting, the deficiency is recorded as income tax expense. Additionally, we record a tax benefit related to accrued forfeitable dividends paid on restricted stock upon vesting.
Conversely, if deductions reported on our tax return for stock-based compensation are less than the cumulative cost of those instruments recognized for financial reporting, the deficiency is recorded as an income tax expense. Additionally, we record a tax benefit related to accrued forfeitable dividends paid on restricted stock upon vesting.
This proportionate share is reflected in net income/(loss) attributable to noncontrolling interests in the accompanying consolidated statements of operations, and has no effect on our overall financial performance, as ultimately, this income or loss is not income or loss for us.
This proportionate share is reflected in net income/(loss) attributable to noncontrolling interests in the accompanying consolidated statements of operations, and has no effect on our overall financial performance, as ultimately, this income/(loss) is not income/(loss) for us.
Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover). (f) Source: Dealogic and Piper Sandler & Co.
Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover). (e) Source: Dealogic and Piper Sandler & Co.
Piper Sandler Companies | 56 Table of Contents Legal and Regulatory Risk Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and loss to our reputation we may suffer as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities.
Piper Sandler Companies | 53 Table of Contents Legal and Regulatory Risk Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and loss to our reputation we may suffer as a result of failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities.
This may be reflected through issues such as settlement obligations or payment collections. Piper Sandler Companies | 54 Table of Contents A key tenet of our risk management procedures related to credit risk is the daily monitoring of the credit quality of our long fixed income securities inventory.
This may be reflected through issues such as settlement obligations or payment collections. Piper Sandler Companies | 51 Table of Contents A key tenet of our risk management procedures related to credit risk is the daily monitoring of the credit quality of our long fixed income securities inventory.
The restructuring and integration costs excluded from the adjusted financial results represent charges that resulted from severance benefits related to acquisitions or headcount reductions, as well as acquisition-related costs associated with contract termination, vacating redundant leased office space and professional fees related to the respective transaction.
The restructuring and integration costs excluded from the adjusted, non-GAAP financial results represent charges that resulted from severance benefits related to acquisitions or headcount reductions, as well as acquisition-related costs associated with contract termination, vacating redundant leased office space and professional fees related to the respective transaction.
See Note 6 to our consolidated financial statements for additional discussion of our assets and liabilities in the fair value hierarchy. Goodwill and Intangible Assets We record all assets acquired and liabilities assumed in acquisitions, including goodwill and other intangible assets, at fair value. Determining the fair value of assets and liabilities acquired requires certain management estimates.
See Note 6 to our consolidated financial statements for additional discussion of our assets and liabilities in the fair value hierarchy. Goodwill and Intangible Assets We record all assets acquired and liabilities assumed in acquisitions, including goodwill and other intangible assets, at fair value, which requires certain management estimates.
Our day-to-day funding and liquidity is obtained primarily through the use of cash from our operating activities, as well as through the use of a clearing arrangement with Pershing, a clearing arrangement with bank financing, and a bank line of credit, which are typically collateralized by our securities inventory.
Our day-to-day funding and liquidity is obtained primarily through the use of cash from our operating activities, as well as through the use of a clearing arrangement with Pershing and a clearing arrangement with bank financing, which are typically collateralized by our securities inventory.
At December 31, 2023, Piper Sandler Ltd., our broker dealer subsidiary registered in the U.K., was subject to, and was in compliance with, the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority pursuant to the Financial Services Act of 2012.
At December 31, 2024, Piper Sandler Ltd., our broker dealer subsidiary registered in the U.K., was subject to, and was in compliance with, the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority pursuant to the Financial Services Act of 2012.
Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million for sub-$5 billion market cap issuers; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover). (g) Source: Refinitiv (sole/senior negotiated and private placement transactions).
Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with deal values greater than $10 million and PIPEs/RDs greater than $5 million for sub-$5 billion market cap issuers; SPAC IPO fees are represented as the standard two percent upfront fee unless noted differently on the IPO cover). (f) Source: Refinitiv (sole/senior negotiated and private placement transactions for the overall market).
We also evaluated our indefinite-lived intangible assets and concluded there was no impairment in 2023. Stock-Based Compensation Plans As part of our compensation to employees and directors, we use stock-based compensation, consisting of restricted stock, restricted stock units and stock options.
We also evaluated our indefinite-lived intangible assets and concluded there was no impairment in 2024. Stock-Based Compensation Plans As part of our compensation to employees and directors, we use stock-based compensation, consisting of restricted stock, restricted stock units and stock options.
In 2023, investing activities used $10.1 million for the purchase of fixed assets. Cash of $249.6 million was used in financing activities, as we repaid the $125 million of Class B Notes upon maturity on October 15, 2023. In addition, we paid $84.4 million in dividends and repurchased $70.7 million of common stock during 2023.
In 2023, investing activities used $10.1 million for the purchase of fixed assets. Cash of $249.6 million was used in financing activities, as we repaid the $125 million of Class B unsecured fixed rate senior notes upon maturity on October 15, 2023. In addition, we paid $84.4 million in dividends and repurchased $70.7 million of common stock during 2023.
For a discussion of our activities related to derivative products, see Note 7 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
For further discussion of our activities related to derivative products, see Note 7 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
(2) We believe the fair value of these derivative contracts is a more relevant measure of the obligations because we believe the notional or contract amount overstates the expected payout. At December 31, 2023 and 2022, the net fair value of these derivative contracts approximated $6.9 million and $7.8 million, respectively. (3) The investment commitments have no specified call dates.
(2) We believe the fair value of these derivative contracts is a more relevant measure of the obligations because we believe the notional or contract amount overstates the expected payout. At December 31, 2024 and 2023, the net fair value of these derivative contracts approximated $3.3 million and $6.9 million, respectively. (3) The investment commitments have no specified call dates.
Clearing Arrangement with Bank Financing We have established a financing arrangement with a U.S. branch of Canadian Imperial Bank of Commerce ("CIBC") related to our convertible securities inventories. Under this arrangement, our convertible securities inventories are cleared through a broker dealer affiliate of CIBC and held by CIBC.
Clearing Arrangement with Bank Financing We have established a financing arrangement with a U.S. branch of CIBC related to our convertible securities inventories. Under this arrangement, our convertible securities inventories are cleared through a broker dealer affiliate of CIBC and held by CIBC.
Discussion of our 2021 results and the year-over-year comparisons between 2022 and 2021 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022 , filed with the SEC on February 24, 2023 .
Discussion of our 2022 results and the year-over-year comparisons between 2023 and 2022 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 , filed with the SEC on February 26, 2024 .
Interest expense on long-term financing includes interest on our Class B unsecured fixed rate senior notes ("Class B Notes"), and is an adjustment from net revenues as this arrangement was used to fund the acquisition of SOP Holdings, LLC and its subsidiaries, including Sandler O'Neill & Partners, L.P. (collectively, "Sandler O'Neill").
Piper Sandler Companies | 38 Table of Contents Interest expense on long-term financing includes interest on our Class B unsecured fixed rate senior notes, and is an adjustment from net revenues as this arrangement was used to fund the acquisition of SOP Holdings, LLC and its subsidiaries, including Sandler O'Neill & Partners, L.P. (collectively, "Sandler O'Neill").
The following relevant events and circumstances were evaluated in concluding that it was not more likely than not that goodwill was impaired: macroeconomic conditions, industry and market considerations and the overall financial performance of our reporting unit. Our annual goodwill impairment testing, performed as of October 31, 2023, resulted in no impairment.
The following relevant events and circumstances were evaluated in concluding that it was not more likely than not that goodwill was impaired: overall financial performance of our reporting unit, public market capitalization of the Company, macroeconomic conditions and industry and market considerations. Our annual goodwill impairment testing, performed as of October 31, 2024, resulted in no impairment.
As of December 31, 2023, we have a $1.8 million liability recorded for uncertain state income tax positions. LIQUIDITY, FUNDING AND CAPITAL RESOURCES We regularly monitor our liquidity position, which is of critical importance to our business.
As of December 31, 2024, we have a $1.9 million liability recorded for uncertain state income tax positions. LIQUIDITY, FUNDING AND CAPITAL RESOURCES We regularly monitor our liquidity position, which is of critical importance to our business.
Investment income/(loss) includes realized and unrealized gains and losses on investments, including amounts attributable to noncontrolling interests, in our alternative asset management funds, as well as management and performance fees generated from those funds. For the year ended December 31, 2023, we recorded investment income of $30.0 million, compared to an investment loss of $23 thousand in 2022.
Investment Income/(Loss) Investment income/(loss) includes realized and unrealized gains and losses on investments, including amounts attributable to noncontrolling interests, in our alternative asset management funds, as well as management and performance fees generated from those funds. For the year ended December 31, 2024, we recorded an investment loss of $7.9 million, compared to investment income of $30.0 million in 2023.
Our committed line and revolving credit facility include covenants requiring Piper Sandler & Co. to maintain a minimum regulatory net capital of $120 million. Our fully disclosed clearing agreement with Pershing includes a covenant requiring Piper Sandler & Co. to maintain excess net capital of $120 million.
Our unsecured revolving credit facility and secured revolving credit facility include covenants requiring Piper Sandler & Co. to maintain a minimum regulatory net capital of $120 million. Our fully disclosed clearing agreement with Pershing includes a covenant requiring Piper Sandler & Co. to maintain excess net capital of $120 million.
Piper Sandler Companies | 51 Table of Contents Investment Commitments We have investments, including those made as part of our alternative asset management activities, in limited partnerships or limited liability companies that make direct or indirect equity or debt investments in companies. We commit capital and/or act as the managing partner of these entities.
Investment Commitments We have investments, including those made as part of our alternative asset management activities, in limited partnerships or limited liability companies that make direct or indirect equity or debt investments in companies. We commit capital and/or act as the managing partner of these entities.
One derivative counterparty represented 87.5 percent, or $5.8 million, of this exposure. Credit exposure associated with our derivative counterparties is driven by uncollateralized market movements in the fair value of the interest rate swap contracts and is monitored regularly by our financial risk committee.
One derivative counterparty represented 86.1 percent, or $3.8 million, of this exposure. Credit exposure associated with our derivative counterparties is driven by uncollateralized market movements in the fair value of the interest rate swap contracts and is monitored regularly by our financial risk committee.
Deal-Related Expenses Deal-related expenses include costs we incurred over the course of a completed investment banking deal, which primarily consist of legal fees, offering expenses, and travel costs. For the year ended December 31, 2023, deal-related expenses were $28.2 million, compared with $31.9 million for the year ended December 31, 2022.
Deal-Related Expenses Deal-related expenses include costs we incurred over the course of a completed investment banking deal, which primarily consist of legal fees, offering expenses, and travel costs. For the year ended December 31, 2024, deal-related expenses were $30.5 million, compared with $28.2 million for the year ended December 31, 2023.
The funding is at the discretion of CIBC (i.e., uncommitted) and could be denied subject to a notice period. This arrangement is reported within receivables from or payables to brokers, dealers and clearing organizations, net of trading activity. At December 31, 2023, we had $80.6 million of financing outstanding under this arrangement.
The funding is at the discretion of CIBC (i.e., uncommitted) and could be denied subject to a notice period. This arrangement is reported within receivables from or payables to brokers, dealers and clearing organizations, net of trading activity. At December 31, 2024, we had $55.5 million of financing outstanding under this arrangement.
Consolidation of these funds results in the inclusion of the proportionate share of the income or loss attributable to the equity interests in consolidated funds that are not attributable, either directly or indirectly, to us (i.e., noncontrolling interests).
Consolidation of the alternative asset management funds results in the inclusion of the proportionate share of the income or loss attributable to the equity interests in consolidated funds that are not attributable, either directly or indirectly, to us (i.e., noncontrolling interests).
Piper Sandler Companies | 46 Table of Contents Certain market conditions can impact the liquidity of our inventory positions, requiring us to hold larger inventory positions for longer than expected or requiring us to take other actions that may adversely impact our results. A significant component of our employees' compensation is paid in annual discretionary incentive compensation.
Certain market conditions can impact the liquidity of our inventory positions, requiring us to hold larger inventory positions for longer than expected or requiring us to take other actions that may adversely impact our results. A significant component of our employees' compensation is paid in annual discretionary incentive compensation.
GAAP basis were $1.35 billion for the year ended December 31, 2023, compared with $1.43 billion in the prior-year period. For the year ended December 31, 2023, adjusted net revenues were $1.33 billion, compared with $1.43 billion for the year ended December 31, 2022. The variance explanations for net revenues and adjusted net revenues are consistent on both a U.S.
GAAP basis were $1.53 billion for the year ended December 31, 2024, compared with $1.35 billion in the prior-year period. For the year ended December 31, 2024, adjusted net revenues were $1.54 billion, compared with $1.33 billion for the year ended December 31, 2023. The variance explanations for net revenues and adjusted net revenues are consistent on both a U.S.
GAAP and conform to practices within the securities industry. The preparation of financial statements in compliance with U.S. GAAP and industry practices requires us to make estimates and assumptions that could materially affect amounts reported in our consolidated financial statements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our accounting and reporting policies comply with U.S. GAAP and conform to practices within the securities industry. The preparation of financial statements in compliance with U.S. GAAP and industry practices requires us to make estimates and assumptions that could materially affect amounts reported in our consolidated financial statements.
The timing of these incentive compensation payments, which is generally in February, has a significant impact on our cash position and liquidity. Our dividend policy is intended to return between 30 percent and 50 percent of our fiscal year adjusted net income to shareholders.
The timing of these incentive compensation payments, which is generally in February, has a significant impact on our cash position and liquidity. Piper Sandler Companies | 43 Table of Contents Our dividend policy is intended to return between 30 percent and 50 percent of our fiscal year adjusted net income to shareholders.
For the year ended December 31, 2023, we recorded $16.6 million of tax benefits related to stock-based compensation awards vesting at values greater than the grant date fair value and accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
For the year ended December 31, 2024, we recorded $14.5 million of tax benefits related to stock-based compensation awards vesting at values greater than the grant date fair value and accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
Our fully disclosed clearing agreement includes a covenant requiring Piper Sandler & Co., our U.S. broker dealer subsidiary, to maintain excess net capital of $120 million. At December 31, 2023, we had $0.2 million of financing outstanding under this arrangement.
Our fully disclosed clearing agreement includes a covenant requiring Piper Sandler & Co., our U.S. broker dealer subsidiary, to maintain excess net capital of $120 million. At December 31, 2024, we had less than $0.1 million of financing outstanding under this arrangement.
Our board of directors has declared a special cash dividend on our common stock of $1.00 per share related to 2023 adjusted net income. This special dividend will be paid on March 15, 2024, to shareholders of record as of the close of business on March 4, 2024.
Our board of directors has declared a special cash dividend on our common stock of $3.00 per share related to 2024 adjusted net income. This special dividend will be paid on March 14, 2025, to shareholders of record as of the close of business on March 4, 2025.
See "Cautionary Note Regarding Forward-Looking Statements" in this Form 10-K for additional information regarding such statements and related risks and uncertainties. Item 7 in this Form 10-K discusses our 2023 and 2022 results and the year-over-year comparisons between 2023 and 2022.
Certain statements in this Form 10-K may be considered forward-looking. See "Cautionary Note Regarding Forward-Looking Statements" in this Form 10-K for additional information regarding such statements and related risks and uncertainties. Item 7 in this Form 10-K discusses our 2024 and 2023 results and the year-over-year comparisons between 2024 and 2023.
As of February 20, 2024, approximately 726,000 shares have vested at share prices greater than the grant date fair values, resulting in an income tax benefit of $10.6 million recorded in the first quarter of 2024, including accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
As of February 20, 2025, approximately 653,000 shares have vested at share prices greater than the grant date fair values, resulting in an income tax benefit of $25.4 million recorded in the first quarter of 2025, including accrued forfeitable dividends paid on vested restricted stock related to acquisitions.
The timing of capital calls is based on market conditions and investment opportunities. Derivatives Derivatives' notional or contract amounts are not reflected as assets or liabilities on our consolidated statements of financial condition.
The timing of capital calls is based on market conditions and investment opportunities. Piper Sandler Companies | 48 Table of Contents Derivatives Derivatives' notional or contract amounts are not reflected as assets or liabilities on our consolidated statements of financial condition.
Institutional brokerage revenues comprise all of the revenues generated through trading activities, which principally consist of facilitating customer trades, as well as fees received for our research services and corporate access offerings.
Piper Sandler Companies | 34 Table of Contents Institutional Brokerage Revenues Institutional brokerage revenues comprise all of the revenues generated through trading activities, which principally consist of facilitating customer trades, as well as fees received for our research services and corporate access offerings.
Effective May 6, 2022, our board of directors authorized the repurchase of up to $150.0 million in common shares through December 31, 2024. In 2023, we did not repurchase any shares of our common stock related to this authorization. At December 31, 2023, we had $138.2 million remaining under this authorization.
Effective May 6, 2022, our board of directors authorized the repurchase of up to $150.0 million in common shares through December 31, 2024. In 2024, we did not repurchase any shares of our common stock related to this authorization.
The initial recognition of goodwill and other intangible assets and the subsequent quantitative impairment analysis involves significant judgment in determining the estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in acceptable valuation techniques, such as the market approach (e.g., earnings and/or transaction multiples) and/or the income approach (e.g., discounted cash flow method).
The initial recognition of goodwill and other intangible assets involves significant judgment in determining the estimates of future cash flows, discount rates, economic forecast and other assumptions which are then used in acceptable valuation techniques, such as the income approach (e.g., discounted cash flow method).
In 2023, we recorded gains on our investments and the noncontrolling interests in the alternative asset management funds that we manage. Excluding the impact of noncontrolling interests, adjusted investment income was $7.1 million in 2023, compared with $1.6 million in 2022.
In 2024, we recorded unrealized losses on our investments and the noncontrolling interests in the alternative asset management funds that we manage. Excluding the impact of noncontrolling interests, adjusted investment income was $7.2 million in 2024, compared with $7.1 million in 2023.
We have committed capital of $95.1 million to certain entities and these commitments generally have no specified call dates. For additional information on our activities related to these types of entities, see Note 9 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
We have committed capital of $72.7 million to certain entities and these commitments generally have no specified call dates. For additional information on our activities related to these types of entities, see Note 9 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K. RISK MANAGEMENT Risk is an inherent part of our business.
Collectively, debt advisory transactions and equity and debt private placements are referred to as capital advisory transactions. Investment banking revenues also include equity and debt corporate financing activities and municipal financings. In 2023, investment banking revenues were $923.8 million, down 8.5 percent compared to $1.01 billion in the prior-year period.
Collectively, debt advisory transactions and equity and debt private placements are referred to as capital advisory transactions. Investment banking revenues also include equity and debt corporate financing activities and municipal financings. In 2024, investment banking revenues were $1.11 billion, up 19.6 percent compared to $923.8 million in the prior-year period.
The uncollateralized amounts, representing the fair value of the derivative contracts, expose us to the credit risk of these counterparties. At December 31, 2023, we had $6.7 million of credit exposure with these counterparties, including $5.8 million of credit exposure with one counterparty.
The uncollateralized amounts, representing the fair value of the derivative contracts, expose us to the credit risk of these counterparties. At December 31, 2024, we had $4.4 million of credit exposure with these counterparties, including $3.8 million of credit exposure with one counterparty.
Our board of directors declared the following dividends on shares of our common stock: Declaration Date Dividend Per Share Record Date Payment Date Related to 2020: February 4, 2021 (1) $ 1.85 March 3, 2021 March 12, 2021 Related to 2021: February 4, 2021 0.40 March 3, 2021 March 12, 2021 April 30, 2021 0.45 May 28, 2021 June 11, 2021 July 30, 2021 0.55 August 27, 2021 September 10, 2021 October 29, 2021 (1) 3.00 November 23, 2021 December 10, 2021 October 29, 2021 0.55 November 23, 2021 December 10, 2021 February 10, 2022 (1) 4.50 March 2, 2022 March 11, 2022 Related to 2022: February 10, 2022 0.60 March 2, 2022 March 11, 2022 April 29, 2022 0.60 May 27, 2022 June 10, 2022 July 29, 2022 0.60 August 26, 2022 September 9, 2022 October 28, 2022 0.60 November 23, 2022 December 9, 2022 February 3, 2023 (1) 1.25 March 3, 2023 March 17, 2023 Related to 2023: February 3, 2023 0.60 March 3, 2023 March 17, 2023 May 2, 2023 0.60 May 26, 2023 June 9, 2023 July 28, 2023 0.60 August 25, 2023 September 8, 2023 October 27, 2023 0.60 November 21, 2023 December 8, 2023 February 2, 2024 (1) 1.00 March 4, 2024 March 15, 2024 Related to 2024: February 2, 2024 0.60 March 4, 2024 March 15, 2024 (1) Represents a special cash dividend.
Our board of directors declared the following dividends on shares of our common stock: Declaration Date Dividend Per Share Record Date Payment Date Related to 2021: February 10, 2022 (1) $ 4.50 March 2, 2022 March 11, 2022 Related to 2022: February 10, 2022 0.60 March 2, 2022 March 11, 2022 April 29, 2022 0.60 May 27, 2022 June 10, 2022 July 29, 2022 0.60 August 26, 2022 September 9, 2022 October 28, 2022 0.60 November 23, 2022 December 9, 2022 February 3, 2023 (1) 1.25 March 3, 2023 March 17, 2023 Related to 2023: February 3, 2023 0.60 March 3, 2023 March 17, 2023 May 2, 2023 0.60 May 26, 2023 June 9, 2023 July 28, 2023 0.60 August 25, 2023 September 8, 2023 October 27, 2023 0.60 November 21, 2023 December 8, 2023 February 2, 2024 (1) 1.00 March 4, 2024 March 15, 2024 Related to 2024: February 2, 2024 0.60 March 4, 2024 March 15, 2024 April 26, 2024 0.60 May 24, 2024 June 7, 2024 August 2, 2024 0.65 August 29, 2024 September 13, 2024 October 25, 2024 0.65 November 22, 2024 December 13, 2024 January 31, 2025 (1) 3.00 March 4, 2025 March 14, 2025 Related to 2025: January 31, 2025 0.65 March 4, 2025 March 14, 2025 (1) Represents a special cash dividend.
The non-GAAP results should be considered in addition to, not as a substitute for, the results prepared in accordance with U.S. GAAP.
The non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP.
The following table summarizes the credit rating for our long corporate fixed income securities, taxable and tax-exempt municipal securities, and U.S. government and agency securities as a percentage of the total of these asset classes as of December 31, 2023: AAA AA A BBB BB Not Rated Corporate fixed income securities — % — % — % — % — % — % Taxable and tax-exempt municipal securities 20.8 28.0 22.6 1.5 — 4.4 U.S. government and agency securities — 22.3 — — — 0.4 20.8 % 50.3 % 22.6 % 1.5 % — % 4.8 % Corporate fixed income securities represent less than 0.1% of the total of the asset classes above as of December 31, 2023.
The following table summarizes the credit rating for our long corporate fixed income securities, taxable and tax-exempt municipal securities, and U.S. government and agency securities as a percentage of the total of these asset classes as of December 31, 2024: AAA AA A BBB BB Not Rated Corporate fixed income securities — % — % — % — % — % — % Taxable and tax-exempt municipal securities 16.5 43.4 16.2 1.3 — 2.4 U.S. government and agency securities — 18.6 1.6 — — — 16.5 % 62.0 % 17.8 % 1.3 % — % 2.4 % Corporate fixed income securities represent less than 0.1 percent of the total of the asset classes above as of December 31, 2024.
GAAP measures provides the most meaningful basis for comparison of our operating results across periods and enhances the overall understanding of our current financial performance by excluding certain items that may not be indicative of our core operating results.
GAAP measures provides a more meaningful basis for comparison of its operating results and underlying trends between periods, and enhances the overall understanding of our current financial performance by excluding certain items that may not be indicative of our core operating results.
The expenses primarily consisted of $6.7 million of severance benefits related to headcount reductions and $0.9 million for vacated leased office space associated with our acquisitions of Cornerstone Macro and The Valence Group ("Valence"). For the year ended December 31, 2022, we incurred acquisition-related restructuring and integration costs of $11.4 million.
For the year ended December 31, 2023, we incurred restructuring and integration costs of $7.7 million, primarily consisting of $6.7 million of severance benefits related to headcount reductions and $0.9 million for vacated leased office space associated with our acquisitions of Cornerstone Macro Research LP and The Valence Group.
Excluding the impact of these benefits and noncontrolling interests, our effective tax rate was 36.8 percent. The effective tax rate was impacted by non-deductible expenses, including estimated civil penalties related to our potential regulatory settlements with the SEC and the CFTC regarding recordkeeping requirements for business-related communications, as well as non-deductible covered employee compensation expense.
Excluding the impact of these benefits and noncontrolling interests, our effective tax rate was 36.8 percent. The effective tax rate for 2023 included the impact of estimated civil penalties related to our regulatory settlements with the SEC and the CFTC regarding recordkeeping requirements for business-related communications, which was non-deductible for income tax purposes, as well as non-deductible employee compensation expense.
The following table summarizes the future aggregate amortization expense of our intangible assets with determinable lives: (Amounts in thousands) 2024 $ 9,445 2025 7,887 2026 7,253 2027 3,480 2028 2,191 Thereafter 541 Total $ 30,797 Piper Sandler Companies | 37 Table of Contents Other Operating Expenses Other operating expenses primarily include insurance costs, license and registration fees, expenses related to our charitable giving program and litigation-related expenses, which consist of the amounts we accrue for and/or pay out related to legal and regulatory matters.
The following table summarizes the future aggregate amortization expense of our intangible assets with determinable lives: (Amounts in thousands) 2025 $ 8,639 2026 7,253 2027 3,480 2028 2,191 2029 541 Total $ 22,104 Other Operating Expenses Other operating expenses primarily include insurance costs, license and registration fees, expenses related to our charitable giving program and litigation-related expenses, which consist of the amounts we accrue for and/or pay out related to legal and regulatory matters.
Interest expense represents amounts associated with financing, economically hedging and holding short inventory positions, including interest paid on our short- and long-term financing arrangements, as well as commitment fees on our committed line and revolving credit facility. For the year ended December 31, 2023, interest expense increased to $10.1 million, compared with $9.5 million in 2022.
Interest Expense Interest expense represents amounts associated with financing, economically hedging and holding short inventory positions, including interest paid on our short- and long-term financing arrangements, as well as commitment fees on certain short-term financing arrangements. For the year ended December 31, 2024, interest expense decreased to $5.7 million, compared with $10.1 million in 2023.
Piper Sandler Companies | 28 Table of Contents Our Business Strategy Our long-term strategic objectives are to drive revenue growth, expand our market presence, continue to gain market share, and maximize shareholder value.
Our Business Strategy Our long-term strategic objectives are to drive revenue growth, expand our market presence, continue to gain market share, and maximize shareholder value.
We have also entered into forgivable loans with service conditions, which are amortized to compensation expense over the loan term. Additionally, expense estimates related to revenue-based earnout arrangements with service conditions entered into as part of our acquisitions are amortized to compensation expense over the service period.
Additionally, expense estimates related to revenue-based earnout arrangements with service conditions entered into as part of our acquisitions are amortized to compensation expense over the service period.
To the extent inflation results in rising interest rates and has adverse effects upon the securities markets, it may adversely affect our financial position and results of operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
To the extent inflation results in rising interest rates and has adverse effects upon the securities markets, it may adversely affect our financial position and results of operations.
GAAP basis $ 4.96 $ 6.52 Adjustment for inclusion of unvested acquisition-related stock (0.38) (0.60) $ 4.58 $ 5.92 Adjustments: Compensation from acquisition-related agreements 2.36 3.93 Restructuring and integration costs 0.33 0.53 Amortization of intangible assets related to acquisitions 0.83 0.69 Non-compensation expenses from acquisition-related agreements (0.05) 0.19 Non-compensation expenses from potential regulatory settlements 1.23 — Adjusted earnings per diluted common share $ 9.28 $ 11.26 Weighted average diluted common shares outstanding: Weighted average diluted common shares outstanding – U.S.
GAAP basis $ 10.24 $ 4.96 Adjustment for inclusion of unvested acquisition-related stock (0.20) (0.38) $ 10.04 $ 4.58 Adjustments: Compensation from acquisition-related agreements 2.17 2.36 Restructuring and integration costs 0.11 0.33 Amortization of intangible assets related to acquisitions 0.43 0.83 Non-compensation expenses from acquisition-related agreements 0.13 (0.05) Non-compensation expenses from regulatory settlements (0.19) 1.23 Adjusted earnings per diluted common share $ 12.69 $ 9.28 Weighted average diluted common shares outstanding: Weighted average diluted common shares outstanding – U.S.
We estimate that a parallel 50 basis point adverse change in the market would result in a decrease of approximately $0.3 million in the carrying value of our fixed income securities inventory as of December 31, 2023, including the effect of the hedging transactions.
We estimate that a parallel 50 basis point adverse change in the market would result in a decrease of approximately $0.4 million in the carrying value of our fixed income securities inventory as of December 31, 2024, including the effect of the hedging transactions. We also measure and monitor the aging and turnover of our long fixed income securities inventory.
At December 31, 2023, we had goodwill of $301.8 million and intangible assets of $116.2 million. Piper Sandler Companies | 44 Table of Contents We are required to perform impairment tests of goodwill and indefinite-lived intangible assets annually and on an interim basis when circumstances exist that could indicate possible impairment.
At December 31, 2024, we had goodwill of $312.0 million and intangible assets of $107.5 million. Piper Sandler Companies | 41 Table of Contents We are required to perform impairment tests of goodwill and indefinite-lived intangible assets annually and on an interim basis when circumstances exist that could indicate possible impairment.
If, after making an assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then further analysis is unnecessary.
If, after making an assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then further analysis is unnecessary. However, if we conclude otherwise, then we are required to perform a quantitative goodwill test.
Consolidated Non-Interest Expenses Compensation and Benefits Compensation and benefits expenses, which are the largest component of our expenses, include salaries, incentive compensation, benefits, stock-based compensation, employment taxes, reversal of expenses associated with the forfeiture of stock-based compensation and other employee-related costs.
Piper Sandler Companies | 35 Table of Contents Compensation and Benefits Compensation and benefits expenses, which are the largest component of our expenses, include salaries, incentive compensation, benefits, stock-based compensation, employment taxes, the reversal of expenses associated with the forfeiture of stock-based compensation and other employee-related costs.
Including this special cash dividend, we will have returned $3.40 per share, or approximately 37 percent of our fiscal year 2023 adjusted net income to shareholders.
Including this special cash dividend, we will have returned $5.50 per share, or approximately 43 percent of our fiscal year 2024 adjusted net income to shareholders.
Our management takes an active role in the risk management process, and the results are reported to senior management and the board of directors. The audit committee of the board of directors oversees management's processes for identifying and evaluating our major risks, and the policies, procedures and practices employed by management to govern its risk assessment and risk management processes.
The audit committee of the board of directors oversees management's processes for identifying and evaluating our major risks, and the policies, procedures and practices employed by management to govern its risk assessment and risk management processes.
Our clearing arrangement activities are recorded net of trading activity and reported within receivables from or payables to brokers, dealers and clearing organizations. The funding is at the discretion of Pershing (i.e., uncommitted) and could be denied without a notice period.
We may accommodate non-standard settlement timeframes for our clients, which can impact our funding and collateral balances. Our clearing arrangement activities are recorded net of trading activity and reported within receivables from or payables to brokers, dealers and clearing organizations. The funding is at the discretion of Pershing (i.e., uncommitted) and could be denied without a notice period.
The following table provides supplemental business information: Year Ended December 31, 2023 2022 Advisory services Completed M&A and restructuring transactions 213 218 Completed capital advisory transactions 56 84 Total completed advisory transactions 269 302 Corporate financings Total equity transactions priced 73 55 Book run equity transactions priced 65 45 Total debt and preferred transactions priced 15 30 Book run debt and preferred transactions priced 7 19 Municipal negotiated issues Aggregate par value of issues priced (in billions) $ 12.4 $ 14.6 Total issues priced 413 570 Equity brokerage Number of shares traded (in billions) 10.7 11.0 Investment banking revenues comprise all of the revenues generated through advisory services activities, which include M&A, equity and debt private placements, debt and restructuring advisory, and municipal financial advisory transactions.
The following table provides supplemental business information: Year Ended December 31, 2024 2023 Advisory services Completed M&A and restructuring transactions 220 213 Completed capital advisory transactions 68 56 Total completed advisory transactions 288 269 Corporate financings Total equity transactions priced 81 73 Book run equity transactions priced 64 65 Total debt and preferred transactions priced 36 15 Book run debt and preferred transactions priced 23 7 Municipal negotiated issues Aggregate par value of issues priced (in billions) $ 16.9 $ 12.4 Total issues priced 501 413 Equity brokerage Number of shares traded (in billions) 11.3 10.7 Investment Banking Revenues Investment banking revenues comprise all of the revenues generated through advisory services activities, which include mergers and acquisitions ("M&A"), equity and debt private placements, debt, restructuring and private capital advisory, and municipal financial advisory transactions.
GAAP basis $ 1,347,967 $ 1,425,638 Adjustments: Investment (income)/loss related to noncontrolling interests (22,916) 1,575 Interest expense on long-term financing 5,146 6,500 Adjusted net revenues $ 1,330,197 $ 1,433,713 Compensation and benefits: Compensation and benefits – U.S.
GAAP basis $ 1,525,914 $ 1,347,967 Adjustments: Investment (income)/loss related to noncontrolling interests 15,128 (22,916) Interest expense on long-term financing — 5,146 Adjusted net revenues $ 1,541,042 $ 1,330,197 Compensation and benefits: Compensation and benefits – U.S.
For further discussion of our contractual rental obligations, see Note 15 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Our contractual rental obligations over the 15-year lease term are $58.1 million. For further discussion of our contractual rental obligations, see Note 14 to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
For the year ended December 31, 2023, communication expenses increased 4.3 percent to $52.7 million, compared with $50.6 million in 2022, primarily due to higher market data services expenses. Marketing and Business Development Marketing and business development expenses include travel and entertainment costs, advertising and third-party marketing fees.
For the year ended December 31, 2024, communication expenses increased 4.2 percent to $54.9 million, compared with $52.7 million in 2023, primarily due to higher market data services expenses. Piper Sandler Companies | 36 Table of Contents Marketing and Business Development Marketing and business development expenses include travel and entertainment costs, advertising and third-party marketing fees.
Effective January 1, 2022, our board of directors authorized the repurchase of up to $150.0 million in common shares through December 31, 2023, and we repurchased the full amount of this authorization during 2022. We also purchase shares of common stock from restricted stock award recipients upon the award vesting as recipients sell shares to meet their employment tax obligations.
Effective February 5, 2025, our board of directors authorized the repurchase of up to $150.0 million in common shares through December 31, 2026. We also purchase shares of common stock from restricted stock award recipients upon the award vesting as recipients sell shares to meet their employment tax obligations.
Equity Capital Markets (offerings with reported deal value greater than $10 million). (e) Source: Dealogic and Piper Sandler & Co.
(b) Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (IPOs, follow-on offerings and convertible offerings with reported deal value greater than $10 million). (c) Source: Dealogic and Piper Sandler & Co. Equity Capital Markets (offerings with reported deal value greater than $10 million). (d) Source: Dealogic and Piper Sandler & Co.
In 2023, marketing and business development expenses decreased 11.9 percent to $37.7 million, compared with $42.8 million for the year ended December 31, 2022. The decrease was primarily due to lower travel expenses.
In 2024, marketing and business development expenses increased 11.9 percent to $42.2 million, compared with $37.7 million for the year ended December 31, 2023. The increase was primarily due to higher travel expenses associated with increased business activity.
GAAP basis $ 23,613 $ 33,189 Tax effect of adjustments: Compensation from acquisition-related agreements 10,467 20,872 Restructuring and integration costs 2,053 2,528 Amortization of intangible assets related to acquisitions 5,152 3,599 Non-compensation expenses from acquisition-related agreements (292) 1,148 Non-compensation expenses from potential regulatory settlements 411 — Adjusted income tax expense $ 41,404 $ 61,336 Net income attributable to Piper Sandler Companies: Net income attributable to Piper Sandler Companies – U.S.
GAAP basis $ 60,972 $ 23,613 Tax effect of adjustments: Compensation from acquisition-related agreements 10,224 10,467 Restructuring and integration costs 590 2,053 Amortization of intangible assets related to acquisitions 2,675 5,152 Non-compensation expenses from acquisition-related agreements 797 (292) Non-compensation expenses from regulatory settlements 248 411 Adjusted income tax expense $ 75,506 $ 41,404 Net income attributable to Piper Sandler Companies: Net income attributable to Piper Sandler Companies – U.S.
Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for tax loss carryforwards.
Amounts provided for income taxes are based on income reported for financial statement purposes and do not necessarily represent amounts currently payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and for tax loss carryforwards.
The increase was primarily due to the $20.0 million we accrued for estimated civil penalties related to our potential regulatory settlements with the SEC and CFTC regarding recordkeeping requirements for business-related communications, as well as the write-off of a $7.5 million uncollectible receivable in our municipal finance business.
Other operating expenses for 2023 included a $20.0 million accrual recorded for estimated civil penalties related to our regulatory settlements with the SEC and CFTC regarding recordkeeping requirements for business-related communications, as well as the write-off of a $7.5 million uncollectible receivable in our municipal financing business.
Piper Sandler Companies | 30 Table of Contents (1) Reconciliation of U.S. GAAP to adjusted non-GAAP financial information: Year Ended December 31, (Amounts in thousands, except per share data) 2023 2022 Net revenues: Net revenues – U.S.
GAAP to adjusted non-GAAP financial information: Year Ended December 31, (Amounts in thousands, except per share data) 2024 2023 Net revenues: Net revenues – U.S.
For the year ended December 31, 2023, intangible asset amortization was $19.4 million, compared with $15.4 million in 2022. The increase was primarily due to higher intangible asset amortization expense associated with our acquisition of DBO Partners.
Intangible Asset Amortization Intangible asset amortization includes the amortization of definite-lived intangible assets. For the year ended December 31, 2024, intangible asset amortization was $10.3 million, compared with $19.4 million in 2023. The decrease was primarily due to lower intangible asset amortization expense associated with our 2022 acquisition of DBO Partners Holding LLC.
Excluding these non-compensation expenses from potential regulatory settlements from our non-GAAP financial measures provides a better understanding of our core non-compensation expenses.
Excluding these restructuring and integration costs from our adjusted, non-GAAP financial measures provides a better understanding of our core non-compensation expenses.
GAAP basis $ 122,586 $ 134,369 Adjustments: Investment (income)/loss related to noncontrolling interests (22,916) 1,575 Interest expense on long-term financing 5,146 6,500 Non-compensation expenses related to noncontrolling interests 9,434 7,919 Compensation from acquisition-related agreements 51,058 87,525 Restructuring and integration costs 7,749 11,440 Amortization of intangible assets related to acquisitions 19,440 15,375 Non-compensation expenses from acquisition-related agreements (1,102) 4,450 Non-compensation expenses from potential regulatory settlements 21,548 — Adjusted operating income $ 212,943 $ 269,153 Interest expense on long-term financing (5,146) (6,500) Adjusted income before adjusted income tax expense $ 207,797 $ 262,653 Income tax expense: Income tax expense – U.S.
GAAP basis $ 218,412 $ 122,586 Adjustments: Investment (income)/loss related to noncontrolling interests 15,128 (22,916) Interest expense on long-term financing — 5,146 Non-compensation expenses related to noncontrolling interests 8,546 9,434 Compensation from acquisition-related agreements 48,727 51,058 Restructuring and integration costs 2,586 7,749 Amortization of intangible assets related to acquisitions 10,288 19,440 Non-compensation expenses from acquisition-related agreements 3,089 (1,102) Non-compensation expenses from regulatory settlements (3,045) 21,548 Adjusted operating income $ 303,731 $ 212,943 Interest expense on long-term financing — (5,146) Adjusted income before adjusted income tax expense $ 303,731 $ 207,797 Income tax expense: Income tax expense – U.S.
Our executive financial risk committee manages our market, liquidity and credit risks; oversees risk management practices related to these risks, including defining acceptable risk tolerances and approving risk management policies; and responds to market changes in a dynamic manner.
We use internal committees to assist in governing risk and ensure that our business activities are properly assessed, monitored and managed. Our executive financial risk committee manages our market, liquidity and credit risks; oversees risk management practices related to these risks, including defining acceptable risk tolerances and approving risk management policies; and responds to market changes in a dynamic manner.
Our ability to support increases in total assets is largely a function of our ability to obtain funding from external sources. Access to these external sources, as well as the cost of that financing, is dependent upon various factors, including market conditions, the general availability of credit and credit ratings.
Access to these external sources, as well as the cost of that financing, is dependent upon various factors, including market conditions, the general availability of credit and credit ratings.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Q u antitati ve and Q ualitative D isclosures A bout M arket R isk 57 Item 8.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The information under the caption "Risk Management" in Part II, Item 7 of this Form 10-K entitled, "Management's Discussion and Analysis of Financial Condition and Results of Operations," is incorporated herein by reference. Piper Sandler Companies | 54 Table of Contents
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F inancial S tatements and S upplementa r y D ata 58 M anagement's Report on Internal Control Over Financial Reporting 58 R eport s of In dependent Registered Public Accounting F i rm (PCAOB ID 42 ) 59 C onsolidated Financia l Statements 62 N otes to the Consolidated Financial Statements 67 Supplementary Data 111

Other PIPR 10-K year-over-year comparisons