US Market News
6日前
Jefferies Announces Second Quarter 2026 Financial ResultsJune 24, 2026 4:16 PM
Business Wire Quarterly Record Combined Investment Banking Advisory and Underwriting Net Revenues, as well as Quarterly Record Equities Net Revenues Jefferies Financial Group Inc. (NYSE: JEF) Q2 Financial Highlights $ in thousands, except per share amounts Quarter End Year-to-Date 2Q26 2Q25 2026 2025 Net earnings attributable to common shareholders $ 226,234 $ 88,017 $ 382,161 $ 215,955 Diluted earnings per voting common share $ 1.02 $ 0.40 $ 1.70 $ 0.97 Return on adjusted tangible shareholders' equity1 12.8 % 5.5 % 12.2 % 6.9 % Total net revenues $ 2,206,451 $ 1,634,447 $ 4,223,581 $ 3,227,466 Investment banking net revenues $ 1,206,820 $ 766,307 $ 2,224,113 $ 1,466,999 Capital markets net revenues $ 799,292 $ 704,155 $ 1,578,048 $ 1,402,439 Asset management net revenues $ 187,718 $ 154,621 $ 407,980 $ 346,336 Pre-tax earnings $ 315,549 $ 134,901 $ 527,765 $ 285,966 Book value per common share $ 51.95 $ 49.96 $ 51.95 $ 49.96 Adjusted tangible book value per fully diluted share3 $ 34.55 $ 32.84 $ 34.55 $ 32.84 Quarterly Cash Dividend and Stock Buyback Activity The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.40 per Jefferies common share, payable on August 28, 2026 to record holders of Jefferies common shares on August 18, 2026. During the quarter, we repurchased 4.0 million shares of common stock for $197 million, or an average price of $49.83 per share. Our Board of Directors has increased our share buyback authorization back to a total of $250 million. Management Comments "Our strong second quarter net revenues of $2.21 billion, net earnings attributable to common shareholders of $226 million, diluted earnings per voting common share of $1.02 and return on adjusted tangible shareholders' equity of 12.8% reflect the momentum and market position we have been building at Jefferies. "The continued acceleration in our core businesses during the second quarter drove record first half net revenues in Advisory, total Investment Banking, Equities, total Capital Markets and combined Investment Banking and Capital Markets. We expect to build further on this momentum in coming periods. “Investment Banking net revenues were $1.21 billion, up 57% from the prior year quarter. Growth was driven by continued market share gains and a growing addressable market in our Advisory and Equity Underwriting businesses and represent a balanced performance, as no single outsized fee drove our results. We continue to make progress in building our corporate M&A business, while staying focused on our historical areas of strength in sponsor-led activity and had very strong performance during the quarter with corporates particularly in the healthcare, industrials and energy sectors. The new issue market remains resilient. We continue to be optimistic about the second half of 2026, given the strength of our current backlog and new business bookings. "Capital Markets net revenues were $799 million, up 14% from the prior year quarter. Equities delivered record net revenues of $601 million, up 14% from the prior year quarter. Our continued growth in Equities is being driven by market share gains in cash and electronic trading in EMEA, Asia and the Americas, as well as growth in prime services where we have become an increasingly important strategic partner to some of the most significant, well diversified, hedge funds in the world. While the growth of client-related prime brokerage balances has added to our overall balance sheet size, it has added a layer of high quality, consistent revenues that supports a more durable earnings profile. Additionally, our equity derivatives business continues to expand in sync with our investment banking business, and has allowed Jefferies to support some of our corporate clients' most important transactions with strategic derivative solutions. The shape and scale of growth in our Equities business is translating to higher overall equities operating margins after we invested the past few years in infrastructure to support meaningfully larger global volumes. Fixed Income net revenues were $199 million, up 12%, from the prior year quarter, reflecting strong performance in our distressed, municipal and emerging markets businesses. "Asset management fees and investment return revenues were $46 million, down 35% compared to the prior year quarter due to weaker performance across several fund strategies, as well as the impact of our strategy to reposition the business by reducing capital allocated to certain funds in line with the announcement we made last fall when we disclosed our intent to acquire 50% of Hildene. In the short term, this has resulted in modestly lower investment return until we close our investment in Hildene, which we are targeting to complete in our third quarter, and should be immediately accretive to results." Richard Handler, CEO, and Brian Friedman, President Financial Summary (Unaudited) $ in thousands Three Months Ended Six Months Ended May 31,
2026 February 28,
2026 May 31,
2025 May 31,
2026 May 31,
2025 Net revenues by source: Advisory $ 674,118 $ 527,128 $ 457,860 $ 1,201,246 $ 855,640 Equity underwriting 370,691 305,969 122,366 676,660 250,886 Debt underwriting 160,186 181,858 205,363 342,044 404,725 Other investment banking 1,825 2,338 (19,282 ) 4,163 (44,252 ) Total Investment Banking 1,206,820 1,017,293 766,307 2,224,113 1,466,999 Equities 600,751 558,488 526,244 1,159,239 935,302 Fixed income 198,541 220,268 177,911 418,809 467,137 Total Capital Markets 799,292 778,756 704,155 1,578,048 1,402,439 Total Investment Banking and Capital Markets Net revenues5 2,006,112 1,796,049 1,470,462 3,802,161 2,869,438 Asset management fees and revenues6 15,169 69,910 20,766 85,079 109,396 Investment return 31,037 88,992 50,404 120,029 44,770 Allocated net interest4 (22,935 ) (22,238 ) (19,144 ) (45,173 ) (36,365 ) Other investments, inclusive of net interest 164,447 83,598 102,595 248,045 228,535 Total Asset Management Net revenues 187,718 220,262 154,621 407,980 346,336 Other 12,621 819 9,364 13,440 11,692 Total Net revenues by source $ 2,206,451 $ 2,017,130 $ 1,634,447 $ 4,223,581 $ 3,227,466 Non-interest expenses: Compensation and benefits $ 1,188,245 $ 1,085,890 $ 854,839 $ 2,274,135 $ 1,695,966 Compensation ratio13 53.9 % 53.8 % 52.3 % 53.8 % 52.5 % Non-compensation expenses $ 702,657 $ 719,024 $ 644,707 $ 1,421,681 $ 1,245,534 Non-compensation ratio13 31.8 % 35.6 % 39.4 % 33.7 % 38.6 % Total Non-interest expenses $ 1,890,902 $ 1,804,914 $ 1,499,546 $ 3,695,816 $ 2,941,500 Net earnings before income taxes $ 315,549 $ 212,216 $ 134,901 $ 527,765 $ 285,966 Income tax expense $ 65,571 $ 52,870 $ 43,506 $ 118,441 $ 57,722 Income tax rate 20.8 % 24.9 % 32.3 % 22.4 % 20.2 % Net earnings $ 249,978 $ 159,346 $ 91,395 $ 409,324 $ 228,244 Net losses attributable to noncontrolling interests (5,440 ) (15,858 ) (7,668 ) (21,298 ) (14,651 ) Preferred stock dividends 29,184 19,504 11,046 48,461 26,940 Net earnings attributable to common shareholders $ 226,234 $ 155,700 $ 88,017 $ 382,161 $ 215,955 Results Discussion Three Months Ended May 31, 2026 Versus May 31, 2025 Six Months Ended May 31, 2026 Versus May 31, 2025 Net earnings attributable to common shareholders of $226 million. Diluted earnings per voting common share of $1.02. Return on adjusted tangible shareholders' equity1 of 12.8%. Repurchased 4.0 million shares of common stock for $197 million, at an average price of $49.83 per share, including 2.5 million shares of common stock in the open market for $121 million and 1.5 million shares of common stock for $76 million in connection with net-share settlements related to our equity compensation plans. We had 194.1 million voting common shares outstanding and 252.0 million common shares outstanding on a fully diluted basis2 at May 31, 2026. Our book value per common share was $51.95 and adjusted tangible book value per fully diluted share3 was $34.55. Effective tax rate of 20.8% compared to 32.3% for the prior year quarter. The lower rate was primarily from investment tax credits and lower state and local taxes. Net earnings attributable to common shareholders of $382 million. Diluted earnings per voting common share of $1.70. Return on adjusted tangible shareholders' equity1 of 12.2%. Repurchased 7.0 million shares of common stock for $372 million, at an average price of $53.42 per share, including 5.0 million shares of common stock in the open market for $265 million and 2.0 million shares of common stock for $107 million in connection with net-share settlements related to our equity compensation plans. Effective tax rate of 22.4% compared to 20.2% for the prior year period. The lower rate last year was primarily driven by the partial resolution of certain state and local tax matters in the prior year period. Investment Banking and Capital Markets Investment Banking and Capital Markets Investment Banking net revenues from combined Advisory and Underwriting totaling $1.20 billion reflect our best quarterly results ever and were 53% higher than the prior year quarter. Advisory net revenues of $674 million reflect our best quarter on record and were 47% higher than the prior year quarter, driven by market share gains and increased deal volumes. Underwriting net revenues of $531 million were 62% higher than the prior year quarter, primarily driven by market share gains and increased activity in Equity underwriting across most sectors. Debt underwriting remained solid but decreased compared to the prior year quarter primarily due to lower deal values and lower origination of asset-backed securities. Capital Markets net revenues of $799 million were 14% higher compared to the prior year quarter. Equities net revenues increased 14%, marking our strongest quarter on record, primarily due to higher global trading volumes driving stronger results across most of our businesses, particularly within cash and electronic trading. Additionally, prime services continues to expand. Fixed Income net revenues increased 12% from the prior year quarter, primarily driven by strong performance in our distressed, municipal securities and emerging markets businesses. Investment Banking net revenues from Advisory and Underwriting totaling $2.22 billion reflect our best first-half year results ever and were 47% higher than the prior year period. Advisory net revenues of $1.20 billion reflect our best first-half year results ever and were 40% higher than the prior year period, driven by market share gains and increased overall market opportunity. Underwriting net revenues of $1.02 billion were 55% higher than the prior year period, primarily driven by market share gains and increased activity in Equity underwriting across several sectors and is reflective of a stronger issuance market. Debt underwriting remained strong but decreased compared to the prior year period primarily due to lower deal values. Capital Markets net revenues of $1.58 billion reflect our best first-half year results ever and were 13% higher compared to the prior year period. Equities net revenues increased 24%, marking our highest first-half year results on record, primarily due to higher global trading volumes driving stronger results across most of our businesses, particularly within cash and electronic trading. Additionally, prime services continues to expand. Our equity options, convertibles, and corporate derivatives businesses also produced strong results. Fixed Income net revenues decreased 10% from the prior year period and current year results include a mark-to-market loss associated with Market Financial Solutions. Asset Management Asset Management Asset Management fees and revenues and investment return of $46 million were lower than the prior year quarter. Asset management fees and revenues decreased from the prior year quarter, as a result of lower management fees from funds and accounts managed by us, primarily Point Bonita, as well as funds and accounts managed by our strategic affiliates. Investment return decreased from the prior year quarter, as strong performance from strategies with a long equity bias was offset by lower performance across other fund strategies and the impact of reduced capital allocated to certain funds based on our strategy to reposition the business. Asset Management fees and revenues and investment return of $205 million were meaningfully higher than the prior year period. Asset management fees and revenues were lower compared to the prior year period, as a result of higher performance fees from funds and accounts managed by our strategic affiliates, offset by lower performance fees largely associated with Point Bonita. Investment return increased significantly from the prior year period due to improved performance across several fund strategies, particularly those with a long-equity bias. Non-interest Expenses Non-interest Expenses Compensation and benefits expense as a percentage of Net revenues was 54%, compared to 52% for the prior year quarter. Non-compensation expenses were higher primarily due to increased brokerage and clearing fees associated with increased equities trading volumes, and increased technology and communication expenses. Non-compensation expenses as a percentage of Net revenues decreased to 32%, compared to 39% for the prior year quarter. Compensation and benefits expense as a percentage of Net revenues was 54%, compared to 53% for the prior year period. Non-compensation expenses were higher primarily due to increased brokerage and clearing fees associated with increased equities trading volumes, and increased technology and communication and business development expenses. In addition, other expenses were higher primarily due to the write-down of goodwill associated with the expected sale of Tessellis. Non-compensation expenses as a percentage of Net revenues decreased to 34%, compared to 39% for the prior year period. * * * * Amounts herein pertaining to May 31, 2026 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three and six months ended May 31, 2026 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC, which we expect to file on or about July 9, 2026. This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current views and include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” "would," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements may also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. We undertake no obligation to update or revise any such forward-looking statement to reflect subsequent circumstances. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s). Consolidated Statements of Earnings (Unaudited) $ in thousands, except per share amounts Three Months Ended May 31, Six Months Ended May 31, 2026 2025 2026 2025 Revenues Investment banking $ 1,209,625 $ 789,269 $ 2,227,909 $ 1,518,779 Principal transactions 488,666 338,507 976,164 745,737 Commissions and other fees 400,614 353,233 768,218 641,533 Asset management fees and revenues 9,788 20,076 77,150 105,484 Interest 853,962 878,025 1,667,081 1,723,196 Other 155,542 115,205 272,940 232,450 Total revenues 3,118,197 2,494,315 5,989,462 4,967,179 Interest expense 911,746 859,868 1,765,881 1,739,713 Net revenues 2,206,451 1,634,447 4,223,581 3,227,466 Non-interest expenses Compensation and benefits 1,188,245 854,839 2,274,135 1,695,966 Brokerage and clearing fees 147,446 129,745 280,578 239,181 Underwriting costs 26,858 14,525 58,241 32,371 Technology and communications 162,860 146,198 322,718 285,673 Occupancy and equipment rental 34,499 30,711 68,359 60,910 Business development 89,108 80,070 164,530 152,361 Professional services 98,707 77,768 175,651 150,234 Depreciation and amortization 47,328 52,253 104,193 83,241 Cost of sales 31,253 42,961 61,173 84,529 Other expenses 64,598 70,476 186,238 157,034 Total non-interest expenses 1,890,902 1,499,546 3,695,816 2,941,500 Earnings before income taxes 315,549 134,901 527,765 285,966 Income tax expense 65,571 43,506 118,441 57,722 Net earnings 249,978 91,395 409,324 228,244 Net losses attributable to noncontrolling interests (5,440 ) (7,668 ) (21,298 ) (14,651 ) Preferred stock dividends 29,184 11,046 48,461 26,940 Net earnings attributable to common shareholders $ 226,234 $ 88,017 $ 382,161 $ 215,955 Financial Data and Metrics (Unaudited) Three Months Ended Six Months Ended May 31,
2026 February 28,
2026 May 31,
2025 May 31,
2026 May 31,
2025 Other Data: Number of trading days 63 61 63 124 124 Number of trading loss days7 0 1 13 1 17 Average VaR (in millions)8 $ 10.31 $ 9.78 $ 11.89 $ 10.05 $ 12.50 In millions, except other data May 31,
2026 February 28,
2026 May 31,
2025 Financial position: Total assets $ 79,540 $ 74,380 $ 67,285 Cash and cash equivalents 14,315 11,963 11,260 Financial instruments owned 28,038 28,079 25,570 Level 3 financial instruments owned9 839 849 763 Goodwill and intangible assets, net14 1,974 1,979 2,060 Total equity 10,607 10,662 10,382 Total shareholders' equity 10,567 10,611 10,305 Tangible shareholders' equity10 8,593 8,632 8,245 Other data and financial ratios: Leverage ratio11 7.5 7.0 6.5 Tangible gross leverage ratio12 9.0 8.4 7.9 Number of employees at period end 7,371 7,596 7,671 Number of employees excluding Tessellis and Stratos at period end 6,236 6,221 5,949 Non-GAAP Reconciliations The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP financial measures. Management believes such non-GAAP financial measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP. Return on Adjusted Tangible Equity Reconciliation $ in thousands Three Months Ended May 31, Six Months Ended May 31, 2026 2025 2026 2025 Net earnings attributable to common shareholders (GAAP) $ 226,234 $ 88,017 $ 382,161 $ 215,955 Intangible amortization and impairment expense, net of tax15 1,682 5,824 48,170 13,093 Adjusted net earnings to common shareholders (non-GAAP) 227,916 93,841 430,331 229,048 Preferred stock dividends 29,184 11,046 48,461 26,940 Adjusted net earnings to total shareholders (non-GAAP) $ 257,100 $ 104,887 $ 478,792 $ 255,988 Adjusted net earnings to total shareholders (non-GAAP)1 $ 1,028,400 $ 419,548 $ 957,584 $ 511,976 February 28, November 30, 2026 2025 2025 2024 Shareholders' equity (GAAP) $ 10,610,845 $ 10,204,228 $ 10,574,696 $ 10,156,772 Less: Goodwill and intangible assets, net (1,978,652 ) (2,037,906 ) (2,040,147 ) (2,054,310 ) Less: Deferred tax asset, net (493,427 ) (507,452 ) (459,052 ) (497,590 ) Less: Weighted average impact of dividends and share repurchases (112,340 ) (67,343 ) (244,489 ) (157,540 ) Adjusted tangible shareholders' equity (non-GAAP) $ 8,026,426 $ 7,591,527 $ 7,831,008 $ 7,447,332 Return on adjusted tangible shareholders' equity (non-GAAP)1 12.8 % 5.5 % 12.2 % 6.9 % Adjusted Tangible Book Value and Fully Diluted Shares Outstanding Reconciliation Reconciliation of book value (shareholders' equity) to adjusted tangible book value and common shares outstanding to fully diluted shares outstanding: $ in thousands, except per share amounts May 31, 2026 May 31, 2025 Book value (GAAP) $ 10,566,996 $ 10,305,025 Stock options(1) 114,939 114,939 Goodwill and intangible assets, net(2) (1,974,240 ) (2,060,018 ) Adjusted tangible book value (non-GAAP) $ 8,707,695 $ 8,359,946 Voting common shares outstanding (GAAP) 194,145 206,272 Non-voting common shares outstanding (GAAP) 9,247 — Preferred shares 27,563 27,563 Restricted stock units ("RSUs") 14,251 14,099 Stock options(1) 5,064 5,064 Other 1,758 1,566 Adjusted fully diluted shares outstanding (non-GAAP)(3) 252,028 254,564 Book value per common share outstanding $ 51.95 $ 49.96 Adjusted tangible book value per fully diluted share outstanding (non-GAAP) $ 34.55 $ 32.84 (1) Stock options added to book value are equal to the total number of stock options outstanding as of May 31, 2026 and 2025 of 5.1 million multiplied by the exercise price of $22.69 on May 31, 2026 and 2025. (2) Includes goodwill and intangible assets related to Tessellis which were reclassified to assets held for sale during the first quarter of 2026. (3) Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of convertible preferred shares if-converted to common shares. Notes Return on adjusted tangible shareholders' equity represents a non-GAAP financial measure and is based on full year or annualized amounts. Refer to schedule on page 8 for a reconciliation to U.S. GAAP amounts. Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as common shares outstanding plus preferred shares, restricted stock units, stock options and other shares. Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts. Adjusted tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value (a non-GAAP financial measure) divided by shares outstanding on a fully diluted basis (a non-GAAP financial measure). Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts. Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to present direct Asset Management revenues. We believe that aggregating Allocated net interest would obscure the revenue results by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods. Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement. Asset management fees and revenues include management and performance fees from funds and accounts managed by us, revenue from strategic affiliated asset managers where we are entitled to portions their operating revenues and income based on our ownership interests in the affiliates. Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments, excluding certain Other investments. VaR estimates the potential loss in value of trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2025. Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned. Tangible shareholders' equity (a non-GAAP financial measure) is defined as shareholders' equity less Intangible assets and goodwill. We believe that tangible shareholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible shareholders' equity, making these ratios meaningful for investors. Leverage ratio equals total assets divided by total equity. Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and intangible assets divided by tangible shareholders' equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio. Compensation ratio equals total compensation expense divided by total net revenues. Non-compensation ratio equals total non-compensation expense divided by total net revenues. Includes goodwill and intangible assets related to Tessellis which were reclassified to assets held for sale during the first quarter of 2026. Includes a $35.5 million after-tax write-down of goodwill associated with Tessellis for the six months ended May 31, 2026. View source version on businesswire.com: https://www.businesswire.com/news/home/20260624112595/en/ FOR MORE INFORMATION
Jonathan Freedman 212.778.8913 Original: Jefferies Announces Second Quarter 2026 Financial Results
US Market News
3月前
Jefferies Announces First Quarter 2026 Financial ResultsMarch 25, 2026 4:15 PM
Business Wire
Jefferies Financial Group Inc. (NYSE: JEF)
Q1 Financial Highlights
$ in thousands, except per share amounts
Quarter End
1Q26
1Q25
Net earnings attributable to common shareholders
$
155,700
$
127,793
Diluted earnings per common share from continuing operations
$
0.70
$
0.57
Return on adjusted tangible shareholders' equity1
10.9
%
8.0
%
Total net revenues
$
2,017,130
$
1,593,019
Investment banking net revenues
$
1,017,293
$
700,692
Capital markets net revenues
$
778,756
$
698,284
Asset management net revenues
$
220,262
$
191,715
Pre-tax earnings from continuing operations
$
212,216
$
151,065
Book value per common share
$
51.91
$
49.48
Adjusted tangible book value per fully diluted share3
$
34.24
$
32.57
Quarterly Cash Dividend and Stock Buyback Activity
The Jefferies Board of Directors declared a quarterly cash dividend equal to $0.40 per Jefferies common share, payable on May 29, 2026 to record holders of Jefferies common shares on May 18, 2026.
Repurchased 3.0 million shares of common stock for $174 million, or an average price of $58.18 per share. Our Board of Directors has increased our share buyback authorization back to a total of $250 million.
Management Comments
"Our first quarter net revenues were $2.02 billion, net earnings attributable to common shareholders were $156 million, diluted earnings per common share from continuing operations were $0.70 and return on adjusted tangible shareholders' equity was 10.9%. Net earnings attributable to common shareholders for the current quarter reflects a $36 million, non-cash, after-tax write-down of goodwill associated with the announced sale of Tessellis (the final component of our original investment in Linkem which was divested in 2024). In addition, we have $17 million of losses related to Market Financial Solutions and First Brands after adjusting for compensation and taxes. Our direct exposure to First Brands is now zero.
"We delivered first quarter record net revenues from overall Investment Banking Advisory and Equity and Debt Underwriting revenues, as well as from Equities, with net revenues increasing 40% and 37%, respectively, versus the first quarter of 2025. These results underscore both the strength of our franchise and the durability of our strategy.
"We made progress in the further wind-down of our legacy merchant banking portfolio, with the announced sale of Tessellis. We expect this transaction to close in the first quarter of 2027. Going forward, our financial results will increasingly reflect our core business activities.
"Over the last six months, our businesses have been operating exceptionally well, in fact setting a best-ever record in first quarter net revenues in our largest two businesses, as mentioned above. Management is disappointed and takes full responsibility for the losses already recognized and that may be absorbed over time in respect of First Brands, all of which are manageable.
“Investment Banking net revenues were $1.02 billion, up 45% from the prior year quarter. Growth was driven by improved Advisory and Equity Underwriting net revenues on market share gains and a stronger overall market for our services, supported by robust activity across both corporate and sponsor clients, as well as improved performance at Jefferies Finance. Our investment banking business is diversified, global and well-positioned and our team is doing an excellent job helping clients navigate the current environment.
"Capital Markets net revenues were $779 million, up 12% from the prior year quarter. Equities net revenues increased 37%, driven by market share gains, higher global trading volumes, and continued strength across our equity options, corporate derivatives and global electronic trading businesses. Fixed Income net revenues were $220 million, despite the mark-to-market loss associated with Market Financial Solutions, reflecting a slower market environment compared to the prior year quarter but improved activity relative to recent quarters.
"Asset management fees and investment return revenues were $159 million, up 91% compared to the prior year quarter. Investment return increased significantly from the prior year quarter due to improved performance across fund strategies.
"The world is challenging, but the acceleration in core business momentum that started in the second half of 2025 has continued through our first quarter of 2026 and into our second quarter. Our goal is to build upon this momentum throughout the rest of fiscal 2026 and beyond."
Richard Handler, CEO, and Brian Friedman, President
Financial Summary (Unaudited)
$ in thousands
Three Months Ended
February 28,
2026
November 30,
2025
February 28,
2025
Net revenues by source:
Advisory
$
527,128
$
634,203
$
397,780
Equity underwriting
305,969
339,799
128,520
Debt underwriting
181,858
215,757
199,362
Other investment banking
2,338
(1,784
)
(24,970
)
Total Investment Banking
1,017,293
1,187,975
700,692
Equities
558,488
485,869
409,058
Fixed income
220,268
206,045
289,226
Total Capital Markets
778,756
691,914
698,284
Total Investment Banking and Capital Markets Net revenues5
1,796,049
1,879,889
1,398,976
Asset management fees and revenues6
69,910
15,602
88,630
Investment return
88,992
65,018
(5,634
)
Allocated net interest4
(22,238
)
(21,130
)
(17,221
)
Other investments, inclusive of net interest
83,598
127,508
125,940
Total Asset Management Net revenues
220,262
186,998
191,715
Other
819
1,966
2,328
Total Net revenues by source
$
2,017,130
$
2,068,853
$
1,593,019
Non-interest expenses:
Compensation and benefits
$
1,085,890
$
1,080,779
$
841,127
Compensation ratio13
53.8
%
52.2
%
52.8
%
Non-compensation expenses
$
719,024
$
734,866
$
600,827
Non-compensation ratio13
35.6
%
35.5
%
37.7
%
Total Non-interest expenses
$
1,804,914
$
1,815,645
$
1,441,954
Net earnings from continuing operations before income taxes
$
212,216
$
253,208
$
151,065
Income tax expense
$
52,870
$
37,537
$
14,216
Income tax rate
24.9
%
14.8
%
9.4
%
Net earnings from continuing operations
$
159,346
$
215,671
$
136,849
Net losses from discontinued operations, net of income taxes
—
(4,374
)
—
Net losses attributable to noncontrolling interests
(15,858
)
(3,738
)
(6,983
)
Preferred stock dividends
19,504
24,145
16,039
Net earnings attributable to common shareholders
$
155,700
$
190,890
$
127,793
Highlights
Three Months Ended February 28, 2026 Versus February 28, 2025
Net earnings attributable to common shareholders of $156 million, or $0.70 per diluted common share from continuing operations.
Return on adjusted tangible shareholders' equity from continuing operations1 of 10.9%.
Repurchased 3.0 million shares of common stock for $174 million, at an average price of $58.18 per share, including 2.5 million shares of common stock in the open market for $144 million under our current Board of Directors authorization and 0.5 million shares of common stock for $30 million in connection with net-share settlements related to our equity compensation plans.
We had 204.4 million common shares outstanding and 255.5 million common shares outstanding on a fully diluted basis2 at February 28, 2026. Our book value per common share was $51.91 and adjusted tangible book value per fully diluted share3 was $34.24.
Effective tax rate from continuing operations of 24.9% compared to 9.4% for the prior year quarter. The fluctuation in rate was primarily driven by the resolution of certain state and local tax matters which occurred during the first quarter of 2025.
Investment Banking and Capital Markets
Investment Banking net revenues from combined Advisory, Equity underwriting and Debt underwriting totaled $1.01 billion, our best first quarter ever and 40% higher than the prior year first quarter.
Advisory net revenues of $527 million were 33% higher than the prior year quarter, driven by increased deal volumes across several sectors.
Underwriting net revenues of $488 million were 49% higher than the prior year quarter, primarily driven by market share gains and increased activity in Equity underwriting across most sectors. Debt underwriting remained solid but decreased compared to the prior year quarter due to lower deal values.
Capital Markets net revenues of $779 million were 12% higher compared to the prior year quarter.
Equities net revenues increased 37%, marking our strongest first quarter on record, due to market share gains and higher global trading volumes driving stronger results, particularly within our equity options, corporate derivatives, and global electronic trading businesses. Additionally, our prime services, Europe and U.S. equity cash businesses, also delivered strong results.
Fixed Income net revenues decreased from the prior year quarter. Strong performance in our municipal securities and emerging markets businesses was more than offset by lower results from our securitized products business. Additionally, current quarter results include a mark-to-market loss associated with Market Financial Solutions.
Asset Management
Asset Management fees and revenues and investment return of $159 million were meaningfully higher than the prior year quarter. Results for the current quarter includes a final $10 million pre-tax loss that fully writes-off our direct exposure to First Brands.
Asset management fees and revenues decreased from the prior year quarter, as a result of higher performance fees from funds and accounts managed by our strategic partners, offset by lower performance fees largely associated with Point Bonita.
Investment return increased significantly from the prior year quarter due to improved performance across several fund strategies, particularly those with a long equity bias.
Non-interest Expenses
Compensation and benefits expense as a percentage of Net revenues was 53.8%, compared to 52.8% for the prior year quarter.
Non-compensation expenses were higher primarily due to increased brokerage and clearing fees associated with increased equities trading volumes, and increased technology and communication expenses, as well as a write-down associated with Tessellis. Non-compensation expenses as a percentage of Net revenues decreased to 35.6%, compared to 37.7% for the prior year quarter.
* * * *
Amounts herein pertaining to February 28, 2026 represent a preliminary estimate as of the date of this earnings release and may be revised upon filing our Quarterly Report on Form 10-Q with the Securities and Exchange Commission (“SEC”). More information on our results of operations for the three months ended February 28, 2026 will be provided upon filing our Quarterly Report on Form 10-Q with the SEC, which we expect to file on or about April 7, 2026.
This press release contains certain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current views and include statements about our future and statements that are not historical facts. These forward-looking statements are usually preceded by the words “should,” “expect,” “intend,” “may,” “will,” "would," or similar expressions. Forward-looking statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements may also include statements pertaining to our strategies for future development of our businesses and products. Forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain. It is possible that the actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. We undertake no obligation to update or revise any such forward-looking statement to reflect subsequent circumstances.
Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).
Consolidated Statements of Earnings (Unaudited)
$ in thousands, except per share amounts
Three Months Ended February 28,
2026
2025
Revenues
Investment banking
$
1,018,284
$
729,510
Principal transactions
487,498
407,230
Commissions and other fees
367,604
288,300
Asset management fees and revenues
67,362
85,408
Interest
813,119
845,171
Other
117,398
117,245
Total revenues
2,871,265
2,472,864
Interest expense
854,135
879,845
Net revenues
2,017,130
1,593,019
Non-interest expenses
Compensation and benefits
1,085,890
841,127
Brokerage and clearing fees
133,132
109,436
Underwriting costs
31,383
17,846
Technology and communications
159,858
139,475
Occupancy and equipment rental
33,860
30,199
Business development
75,422
72,291
Professional services
76,944
72,466
Depreciation and amortization
56,865
30,988
Cost of sales
29,920
41,568
Other expenses
121,640
86,558
Total non-interest expenses
1,804,914
1,441,954
Earnings before income taxes
212,216
151,065
Income tax expense
52,870
14,216
Net earnings
159,346
136,849
Net losses attributable to noncontrolling interests
(15,858
)
(6,983
)
Preferred stock dividends
19,504
16,039
Net earnings attributable to common shareholders
$
155,700
$
127,793
Financial Data and Metrics (Unaudited)
Three Months Ended
February 28,
2026
November 30,
2025
February 28,
2025
Other Data:
Number of trading days
61
63
61
Number of trading loss days7
1
3
4
Average VaR (in millions)8
$
9.78
$
9.50
$
13.13
In millions, except other data
February 28,
2026
November 30,
2025
February 28,
2025
Financial position:
Total assets
$
74,380
$
76,012
$
70,219
Cash and cash equivalents
11,963
14,044
11,176
Financial instruments owned
28,079
27,723
26,087
Level 3 financial instruments owned9
849
738
781
Goodwill and intangible assets, net14
1,979
2,040
2,038
Total equity
10,662
10,642
10,268
Total shareholders' equity
10,611
10,575
10,204
Tangible shareholders' equity10
8,632
8,535
8,166
Other data and financial ratios:
Leverage ratio11
7.0
7.1
6.8
Tangible gross leverage ratio12
8.4
8.7
8.3
Number of employees at period end
7,596
7,787
7,701
Number of employees excluding Tessellis and Stratos at period end
6,221
6,194
5,994
Components of Numerators and Denominators for Earnings Per Common Share
$ in thousands, except per share amounts
Three Months Ended
February 28,
2026
2025
Numerator for earnings per common share:
Net earnings
$
159,346
$
136,849
Less: Net losses attributable to noncontrolling interests
(15,858
)
(6,983
)
Allocation of earnings to participating securities
(19,504
)
(16,039
)
Net earnings attributable to common shareholders for basic earnings per share
$
155,700
$
127,793
Net earnings attributable to common shareholders for diluted earnings per share
$
155,700
$
127,793
Denominator for earnings per common share:
Weighted average common shares outstanding
206,093
206,046
Weighted average shares of restricted stock outstanding with future service required
(2,147
)
(2,200
)
Weighted average restricted stock units outstanding with no future service required
11,761
10,690
Weighted average basic common shares
215,707
214,536
Stock options and other share-based awards
5,152
5,287
Senior executive compensation plan restricted stock unit awards
2,411
2,625
Weighted average diluted common shares
223,270
222,448
Earnings per common share:
Basic
$
0.72
$
0.60
Diluted
$
0.70
$
0.57
Non-GAAP Reconciliations
The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP financial measures. Management believes such non-GAAP financial measures are useful to investors as they allow them to view our results through the eyes of management, while facilitating a comparison across historical periods. These measures should not be considered a substitute for, or superior to, measures prepared in accordance with U.S. GAAP.
Return on Adjusted Tangible Equity Reconciliation
$ in thousands
Three Months Ended
February 28,
2026
2025
Net earnings attributable to common shareholders (GAAP)
$
155,700
$
127,791
Intangible amortization and impairment expense, net of tax15
42,433
7,073
Adjusted net earnings to common shareholders (non-GAAP)
198,133
134,864
Preferred stock dividends
19,504
16,039
Adjusted net earnings to total shareholders (non-GAAP)
$
217,637
$
150,903
Adjusted net earnings to total shareholders (non-GAAP)1
$
870,548
$
603,612
November 30,
2025
2024
Shareholders' equity (GAAP)
$
10,574,696
$
10,156,772
Less: Goodwill and intangible assets, net
(2,040,147
)
(2,054,310
)
Less: Deferred tax asset, net
(459,052
)
(497,590
)
Less: Weighted average impact of dividends and share repurchases
(106,532
)
(94,936
)
Adjusted tangible shareholders' equity (non-GAAP)
$
7,968,965
$
7,509,936
Return on adjusted tangible shareholders' equity (non-GAAP)1
10.9
%
8.0
%
Adjusted Tangible Book Value and Fully Diluted Shares Outstanding Reconciliation
Reconciliation of book value (shareholders' equity) to adjusted tangible book value and common shares outstanding to fully diluted shares outstanding:
$ in thousands, except per share amounts
February 28, 2026
February 28, 2025
Book value (GAAP)
$
10,610,845
$
10,204,228
Stock options(1)
114,939
114,939
Goodwill and intangible assets, net(2)
(1,978,652
)
(2,037,906
)
Adjusted tangible book value (non-GAAP)
$
8,747,132
$
8,281,261
Common shares outstanding (GAAP)
204,423
206,250
Preferred shares
27,563
27,563
Restricted stock units ("RSUs")
16,746
13,950
Stock options(1)
5,065
5,065
Other
1,671
1,459
Adjusted fully diluted shares outstanding (non-GAAP)(3)
255,468
254,287
Book value per common share outstanding
$
51.91
$
49.48
Adjusted tangible book value per fully diluted share outstanding (non-GAAP)
$
34.24
$
32.57
(1)
Stock options added to book value are equal to the total number of stock options outstanding as of February 28, 2026 and 2025 of 5.1 million multiplied by the exercise price of $22.69 on February 28, 2026 and 2025.
(2)
Includes goodwill and intangible assets related to Tessellis which were reclassified to assets held for sale during the first quarter of 2026.
(3)
Fully diluted shares outstanding include vested and unvested RSUs as well as the target number of RSUs issuable under the senior executive compensation plans until the performance period is complete. Fully diluted shares outstanding also include all stock options and the impact of convertible preferred shares if-converted to common shares.
Notes
Return on adjusted tangible shareholders' equity represents a non-GAAP financial measure and is based on full year or annualized amounts. Refer to schedule on page 8 for a reconciliation to U.S. GAAP amounts.
Shares outstanding on a fully diluted basis (a non-GAAP financial measure) is defined as common shares outstanding plus preferred shares, restricted stock units, stock options and other shares. Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts.
Adjusted tangible book value per fully diluted share (a non-GAAP financial measure) is defined as adjusted tangible book value (a non-GAAP financial measure) divided by shares outstanding on a fully diluted basis (a non-GAAP financial measure). Refer to schedule on page 9 for a reconciliation to U.S. GAAP amounts.
Allocated net interest represents an allocation to Asset Management of certain of our long-term debt interest expense, net of interest income on our Cash and cash equivalents and other sources of liquidity. Allocated net interest has been disaggregated to increase transparency and to present direct Asset Management revenues. We believe that aggregating Allocated net interest would obscure the revenue results by including an amount that is unique to our credit spreads, debt maturity profile, capital structure, liquidity risks and allocation methods.
Allocated net interest is not separately disaggregated for Investment Banking and Capital Markets. This presentation is aligned to our Investment Banking and Capital Markets internal performance measurement.
Asset management fees and revenues include management and performance fees from funds and accounts managed by us, revenue from strategic affiliated asset managers where we are entitled to portions their operating revenues and income based on our ownership interests in the affiliates.
Number of trading loss days is calculated based on trading activities in our Investment Banking and Capital Markets and Asset Management business segments, excluding certain Other investments.
VaR estimates the potential loss in value of trading positions due to adverse market movements over a one-day time horizon with a 95% confidence level. For a further discussion of the calculation of VaR, see "Value-at-Risk" in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended November 30, 2025.
Level 3 financial instruments represent those financial instruments classified as such under Accounting Standards Codification 820, accounted for at fair value and included within Financial instruments owned.
Tangible shareholders' equity (a non-GAAP financial measure) is defined as shareholders' equity less Intangible assets and goodwill. We believe that tangible shareholders' equity is meaningful for valuation purposes, as financial companies are often measured as a multiple of tangible shareholders' equity, making these ratios meaningful for investors.
Leverage ratio equals total assets divided by total equity.
Tangible gross leverage ratio (a non-GAAP financial measure) equals total assets less goodwill and intangible assets divided by tangible shareholders' equity. The tangible gross leverage ratio is used by rating agencies in assessing our leverage ratio.
Compensation ratio equals total compensation expense divided by total net revenues. Non-compensation ratio equals total non-compensation expense divided by total net revenues.
Includes goodwill and intangible assets related to Tessellis which were reclassified to assets held for sale during the first quarter of 2026.
Includes a $35.5 million after-tax write-down of goodwill associated with Tessellis.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260325419075/en/
FOR MORE INFORMATION
Jonathan Freedman 212.778.8913
Original: Jefferies Announces First Quarter 2026 Financial Results
US Market News
4月前
Jefferies Discloses Facts About Western Alliance and Western Alliance’s Loan Solely Against First Brands ReceivablesMarch 9, 2026 6:45 AM
Business Wire
Jefferies Financial Group Inc. (NYSE: JEF) (“Jefferies”) announced today that it has posted the attached letter from Jefferies’ CEO and President in response to the lawsuit and public statements by Western Alliance Bank (“Western Alliance”) concerning Western Alliance’s loans against receivables of First Brands. The letter makes clear that, among other things,
For over four years, Western Alliance made non-recourse loans in steadily increasing amounts to borrowers named LAM Trade Finance Group LLC and LAM TFG I SPV LLC, with no guarantee or credit support from Jefferies or other affiliates.
The borrowers to which Western Alliance made loans are special purpose entities owned by the Point Bonita master fund, and their assets consisted solely of First Brands receivables and related proceeds.
The Loan Agreement was clear that Western Alliance had no recourse beyond the assets of LAM TFG I SPV LLC. Western Alliance had no guarantee or other right of payment from Jefferies or the Point Bonita master fund.
Shortly before First Brands’ bankruptcy filing in September 2025, when Western Alliance was considering a forbearance arrangement, Western Alliance asked the Point Bonita master fund and Jefferies to guarantee the Western Alliance loan to LAM TFG I SPV LLC. Those requests were denied.
When Western Alliance agreed to forbear in any event, Western Alliance was well aware that its counterparties were limited to LAM Trade Finance Group LLC and LAM TFG I SPV LLC, and that it had no rights to assets other than First Brands receivables.
Given those facts, various of the statements made on Friday, March 6 by Western Alliance executives were false or misleading. With respect to the lawsuit, although Jefferies will respond more fully in due course, Jefferies believes there is no merit to any claims seeking to recover from Jefferies or other entities that were not obligors to Western Alliance.
Today’s letter also addresses Jefferies’ exposure to Market Financial Solutions (“MFS”). In the normal course of business, one of Jefferies’ European subsidiaries loaned MFS £103 million under a warehouse facility secured by certain of MFS’s bridge loans to residential borrowers, property investors and landlords. As noted in the letter, Jefferies believes the net impact on its Net Earnings over time from the facility with MFS is likely to be less than $20 million. The facility was sized at a level that was within Jefferies’ risk appetite and the amount of the net loss is well within our tolerance.
About Jefferies Financial Group Inc.
Jefferies (NYSE: JEF) is one of the world’s leading full-service investment banking and capital markets firms. We primarily serve public companies, private companies, and their sponsors and owners, institutional investors, and government entities. Our services are enhanced by our relentless client focus, our differentiated insights and a flat and nimble operating structure. For more information: www.jefferies.com.
Forward-Looking Statements
This press release and its attachment contain “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements about our future and statements that are not historical facts. These forward-looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “may,” “intend,” “outlook,” “will,” “estimate,” “forecast,” “project,” “should,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which will change over time. Forward-looking statements may contain beliefs, goals, intentions and expectations regarding revenues, earnings, operations, arrangements and other results, and may include statements of future performance, plans, and objectives. Forward-looking statements speak only as of the date they are made; we do not assume any duty, and do not undertake, to update any forward-looking statements. Furthermore, because forward-looking statements represent only our belief regarding future events, many of which by their nature are inherently uncertain, the actual results or outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. Information regarding important factors, including Risk Factors that could cause actual results or outcomes to differ, perhaps materially, from those in our forward-looking statements is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with reports we file with the SEC. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s).
March 9, 2026
Dear Clients, Stakeholders and Friends of Jefferies,
We write to mitigate the harm inflicted Friday on Jefferies by the false and misleading statements made by Ken Vecchione, the CEO of Western Alliance Bank (“Western Alliance”). These statements were made against the backdrop of a lawsuit filed by Western Alliance that itself contains numerous false and misleading statements. Both the lawsuit and Mr. Vecchione’s statements ignore the simple reality that Western Alliance did not extend credit to Jefferies. Instead, for over four years, Western Alliance made non-recourse loans in increasing amounts to special purpose entities that held First Brands receivables, with no guarantee or other credit support from Jefferies or any of its other affiliates.
After first stating that Jefferies had somehow “place[d its] reputation and operating integrity . . . at risk, forcing future banks, clients and counterparties to seriously reevaluate the dependability of [Jefferies’] commitments,” Mr. Vecchione, apparently referring to an amount of $126 million, stated that he would not “speculate as to what's going on at Jefferies as to why they couldn't make payments.”
To be clear, Jefferies honors all its obligations. Jefferies has no obligation to pay off a non-recourse loan Western Alliance chose to make to a special purpose vehicle against First Brands receivables. The statement that Jefferies “couldn’t” repay $126 million is false and absurd.
As we have previously acknowledged, the First Brands situation could cause Jefferies financial loss over time. We also said we were confident any losses or expenses in respect of First Brands can readily be absorbed and do not threaten our robust financial condition or business momentum. This remains our belief and is unchanged by this lawsuit or any other information we have received.
To further clarify our relationship with Western Alliance, please note the following facts:
In 2021, Western Alliance began lending money to LAM Trade Finance Group LLC, an entity owned by the Point Bonita master fund whose business is to purchase First Brands receivables. Western Alliance more recently has made loans to LAM TFG I SPV LLC, a special purpose vehicle that likewise is owned by the Point Bonita master fund and exists to hold First Brands receivables.
The Loan Agreement currently at issue is between Western Alliance and LAM TFG I SPV LLC. Under a related agreement, LAM Trade Finance Group LLC purchased receivables from First Brands and sold those receivables to LAM TFG I SPV LLC, which borrowed money from Western Alliance. Under the loan documents, Western Alliance's sole recourse was to the receivables in the SPV. Indeed, the governing Loan Agreement expressly precludes Western Alliance from seeking to recover from the SPV’s shareholders, managers or affiliated entities.
During the entire time Western Alliance was lending against the First Brands receivables, it was entitled to thoroughly examine all matters related to LAM Trade Finance Group LLC and LAM TFG I SPV, as well as to audit the First Brands receivables it was lending against.
Shortly before First Brands’ bankruptcy filing in September 2025, when Western Alliance was discussing a forbearance, Western Alliance asked to have the Point Bonita master fund and Jefferies itself guarantee the loan. Those requests were denied. Western Alliance nonetheless proceeded to enter into a forbearance with LAM TFG I SPV LLC and LAM Trade Finance Group LLC, with no guarantees from Jefferies or other entities.
We are genuinely sorry that Western Alliance has joined the ranks of the dozens of financial institutions, including Jefferies, that are facing losses because of the fraud at First Brands. We would note, though, that unlike many other investors, which have yet to recover any of their investments in First Brands, Western Alliance has been repaid more than half the amount it has loaned. Jefferies will respond in more detail to the lawsuit in due course. To be clear, however, Jefferies believes there is no merit to any claims seeking to recover from Jefferies and other entities that were not obligors on Western Alliance’s loans.
On a separate matter, we want to comment on our exposure to Market Financial Solutions (“MFS”). One of our European subsidiaries loaned MFS £103 million under a warehouse facility secured by certain of MFS’s bridge loans to residential borrowers, property investors and landlords. It now appears that some of the collateral underlying that facility may have been double-pledged. At this time, we have already recovered approximately 25% of our facility in cash and believe that a further approximately 40% is secured by valid loans, while we are continuing to review the remainder of the portfolio. We believe the net impact on our Net Earnings over time from our facility with MFS is likely to be less than $20 million.
This facility was extended to MFS in the normal course of business as part of our broader effort in Asset Backed Securitization (“ABS”), where warehouse facilities are provided to accumulate a package of loans that are then securitized or otherwise sold to a range of counterparties. In this case, we intended to, and were in the process of, selling 85% of the underlying facility amount and retaining 15%. The facility was sized at a level that was within our risk appetite and the amount of the net loss is well within our tolerance. We realize meaningful profit from our activities in ABS, including CLOs, and while our involvement in MFS was disappointing, it is within our risk appetite.
As we said back in October, we take the First Brands matter extremely seriously and we regret that we, our co-investors in the Point Bonita fund, and other stakeholders, have been impacted by the First Brands fraud. We would also reiterate our belief that, no matter what the ultimate outcome is, the impact of the First Brands fraud on Jefferies, while unfortunate, is manageable, and any losses will be readily absorbed.
RICH HANDLER
CEO
Jefferies Financial Group
BRIAN FRIEDMAN
President
Jefferies Financial Group
View source version on businesswire.com: https://www.businesswire.com/news/home/20260309247405/en/
For inquiries, please contact:
Jonathan Freedman
mediacontact@jefferies.com
Original: Jefferies Discloses Facts About Western Alliance and Western Alliance’s Loan Solely Against First Brands Receivables