• Stifel Reports Third Quarter 2024 Results

    Источник: Nasdaq GlobeNewswire / 23 окт 2024 07:00:00   America/New_York

    ST. LOUIS, Oct. 23, 2024 (GLOBE NEWSWIRE) -- Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.2 billion for the three months ended September 30, 2024, compared with $1.0 billion a year ago. Net income available to common shareholders was $149.2 million, or $1.34 per diluted common share, compared with $58.8 million, or $0.52 per diluted common share for the third quarter of 2023. Non-GAAP net income available to common shareholders was $166.3 million, or $1.50 per diluted common share for the third quarter of 2024.

    Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “The third quarter represented our second highest quarterly net revenue, an increase of 17%, while earnings per share increased 150%. Through the first three quarters of 2024, net revenue was up 13% to a record $3.6 billion, driven by continued growth in Global Wealth, improvement in our Institutional business, and the stabilization of net interest income. Our financial results illustrate the strength of the Stifel franchise and our ability to capitalize on improving market conditions. Momentum in our business continues to build and we anticipate further upside to both the top and bottom lines in the fourth quarter and in 2025.”

    Highlights

    • The Company reported net revenues of $1.2 billion, the second best revenue quarter in its history, driven by higher investment banking revenues, asset management revenues, and transactional revenues, partially offset by lower net interest income.
    • Non-GAAP net income available to common shareholders of $1.50 per diluted common share was negatively impacted by elevated provisions for legal matters of $0.10 per diluted common share (after-tax).
    • Investment banking revenues increased 66% over the year-ago quarter, driven by higher capital raising and advisory revenues.
      • Capital raising revenues increased 114% over the year-ago quarter.
      • Advisory revenues increased 41% over the year-ago quarter.
    • Record asset management revenues, up 15% over the year-ago quarter.
    • Record client assets of $496.3 billion, up 20% over the year-ago quarter.
    • Recruited 28 financial advisors during the quarter, including 13 experienced employee advisors.
    • Non-GAAP pre-tax margin of 19.2% as the Company maintained its focus on expense discipline, while continuing to invest in the business.
    • Annualized return on tangible common equity (ROTCE) (5) of 20%.
    • Tangible book value per common share (7) of $33.62, up 12% from prior year.
    Financial Summary (Unaudited)
    (000s) 3Q 2024 3Q 20239m 20249m 2023
    GAAP Financial Highlights:   
    Net revenues$1,224,668 $1,045,051 $3,605,638 $3,202,565 
    Net income (1)$149,185 $58,840 $459,413 $332,091 
    Diluted EPS (1)$1.34 $0.52 $4.16 $2.91 
    Comp. ratio 58.6% 58.7% 58.8% 58.7%
    Non-comp. ratio 23.7% 30.8% 22.8% 25.7%
    Pre-tax margin 17.7% 10.5% 18.4% 15.6%
    Non-GAAP Financial Highlights:   
    Net revenues$1,225,351 $1,045,028 $3,606,330 $3,202,539 
    Net income (1) (2)$166,270 $67,413 $506,186 $364,937 
    Diluted EPS (1) (2)$1.50 $0.60 $4.58 $3.20 
    Comp. ratio (2) 58.0% 58.0% 58.0% 58.0%
    Non-comp. ratio (2) 22.8% 30.2% 22.1% 24.9%
    Pre-tax margin (3) 19.2% 11.8% 19.9% 17.1%
    ROCE (4)  13.7% 5.8% 14.4% 10.4%
    ROTCE (5) 19.5% 8.5% 20.7% 15.1%
    Global Wealth Management (assets and loans in millions)  
    Net revenues$827,116 $768,558 $2,418,751 $2,283,934 
    Pre-tax net income$301,703 $298,449 $891,624 $914,462 
    Total client assets$496,298 $412,458   
    Fee-based client assets$190,771 $150,982   
    Bank loans (6)$20,633 $20,435   
    Institutional Group     
    Net revenues$372,401 $256,888 $1,114,498 $867,025 
    Equity$222,459 $144,764 $646,570 $508,371 
    Fixed Income$149,942 $112,124 $467,928 $358,654 
    Pre-tax net income/ (loss)$41,797 ($27,804)$127,719 ($5,671)


    Global Wealth Management
     

    Global Wealth Management reported record net revenues of $827.1 million for the three months ended September 30, 2024 compared with $768.6 million during the third quarter of 2023. Pre-tax net income was $301.7 million compared with $298.4 million in the third quarter of 2023.

    Highlights

    • Recruited 28 financial advisors during the quarter, including 13 experienced employee advisors, with total trailing 12 month production of $10.5 million.
    • Client assets of $496.3 billion, up 20% over the year-ago quarter.
    • Fee-based client assets of $190.8 billion, up 26% over the year-ago quarter.

    Net revenues increased 8% from a year ago:

    • Transactional revenues increased 16% over the year-ago quarter reflecting an increase in client activity.
    • Asset management revenues increased 15% over the year-ago quarter due to higher asset values and net new assets.
    • Net interest income decreased 11% from the year-ago quarter driven by changes in deposit mix, partially offset by higher yields on the investment portfolio and lending growth.

    Total Expenses:

    • Compensation expense as a percent of net revenues increased to 48.7% primarily as a result of higher compensable revenues.
    • Provision for credit losses decreased from the year-ago quarter primarily as a result of lower provisions in the real estate sector compared to the year-ago quarter, partially offset by growth in the loan portfolio.
    • Non-compensation operating expenses as a percent of net revenues increased to 14.8% primarily as a result of higher litigation-related expenses, partially offset by revenue growth over the year-ago quarter.
    Summary Results of Operations
    (000s)3Q 20243Q 2023
    Net revenues$827,116  $768,558  
    Transactional revenues 192,727  165,547 
    Asset management 382,309  333,088 
    Net interest income 240,825  269,431 
    Investment banking 6,217  3,895 
    Other income 5,038  (3,403)
    Total expenses $525,413  $470,109  
    Compensation expense 403,205  359,325 
    Provision for credit losses 5,287  9,992 
    Non-comp. opex 116,921  100,792 
    Pre-tax net income$301,703  $298,449  
    Compensation ratio 48.7% 46.8%
    Non-compensation ratio 14.8% 14.4%
    Pre-tax margin 36.5% 38.8%


    Institutional Group
     

    Institutional Group reported net revenues of $372.4 million for the three months ended September 30, 2024 compared with $256.9 million during the third quarter of 2023. Institutional Group reported pre-tax net income of $41.8 million for the three months ended September 30, 2024 compared with pre-tax net loss of $27.8 million in the third quarter of 2023.

    Highlights

    Investment banking revenues increased 66% from a year ago:

    • Advisory revenues increased from the year-ago quarter driven by higher levels of completed advisory transactions.
    • Fixed income capital raising revenues more than doubled over the year-ago quarter primarily driven by higher bond issuances.
    • Equity capital raising revenues increased significantly over the year-ago quarter driven by higher volumes.

    Fixed income transactional revenues increased 17% from a year ago:

    • Fixed income transactional revenues increased from the year-ago quarter driven by improved client engagement and volatility.

    Equity transactional revenues increased 4% from a year ago:

    • Equity transactional revenues increased from the year-ago quarter primarily driven by an increase in equities trading commissions.

    Total Expenses:

    • Compensation expense as a percent of net revenues decreased to 60.3% primarily as a result of higher revenues.
    • Non-compensation operating expenses as a percent of net revenues decreased to 28.5% primarily as a result of revenue growth and expense discipline.
    Summary Results of Operations
    (000s) 3Q 20243Q 2023
    Net revenues $372,401  $256,888  
    Investment banking 236,965  142,991 
    Advisory 136,857  97,272 
    Fixed income capital raising 49,364  24,670 
    Equity capital raising 50,744  21,049 
    Fixed income transactional 78,974  67,439 
    Equity transactional 48,824  46,930 
    Other 7,638  (472)
    Total expenses $330,604  $284,692  
    Compensation expense 224,556  192,638 
    Non-comp. opex. 106,048  92,054 
    Pre-tax net income/(loss)$41,797  ($27,804)
    Compensation ratio 60.3% 75.0%
    Non-compensation ratio 28.5% 35.8%
    Pre-tax margin 11.2% (10.8%)

     

    Other Matters
     

    Highlights

    • During the third quarter, the Company’s 4.25% Senior Notes matured resulting in the retirement of the $500.0 million outstanding balance.
    • The Company repurchased $20.2 million of its outstanding common stock during the third quarter.
    • Weighted average diluted shares outstanding decreased primarily as a result of share repurchases. The Company has repurchased 3.7 million shares under its share repurchase program since the third quarter of 2023.
    • The Board of Directors declared a $0.42 quarterly dividend per share payable on September 17, 2024 to common shareholders of record on September 3, 2024.
    • The Board of Directors declared a quarterly dividend on the outstanding shares of the Company’s preferred stock payable on September 17, 2024 to shareholders of record on September 3, 2024.
      3Q 2024 3Q 2023
    Common stock repurchases   
    Repurchases (000s)$20,222$118,810
    Number of shares (000s)2491,886
    Average price$81.23$63.00
    Period end shares (000s)102,313103,120
    Weighted average diluted shares outstanding (000s)110,994113,195
    Effective tax rate26.8%37.7%
    Stifel Financial Corp. (8)  
    Tier 1 common capital ratio15.0%13.9%
    Tier 1 risk based capital ratio17.9%16.9%
    Tier 1 leverage capital ratio11.3%10.8%
    Tier 1 capital (MM)$4,159$3,914
    Risk weighted assets (MM)$23,184$23,219
    Average assets (MM)$36,813$36,356
    Quarter end assets (MM)$38,935$37,878
    Agency RatingOutlook
    Fitch RatingsBBB+Stable
    S&P Global RatingsBBBStable
     

    Conference Call Information

    Stifel Financial Corp. will host its third quarter 2024 financial results conference call on Wednesday, October 23, 2024, at 9:30 a.m. Eastern Time. The conference call may include forward-looking statements.

    All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (866) 409-1555 and referencing conference ID 7408307. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company’s web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.

    Company Information

    Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners and Miller Buckfire & Co., LLC business divisions; Keefe, Bruyette & Woods, Inc.; and Stifel Independent Advisors, LLC; in Canada through Stifel Nicolaus Canada Inc.; and in the United Kingdom and Europe through Stifel Nicolaus Europe Limited. The Company’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company’s website at www.stifel.com. For global disclosures, please visit www.stifel.com/investor-relations/press-releases.

    A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the financial supplement. Both the earnings release and the financial supplement are available online in the Investor Relations section at www.stifel.com/investor-relations.

    The information provided herein and in the financial supplement, including information provided on the Company’s earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial supplement, both of which are available online in the Investor Relations section at www.stifel.com/investor-relations.

    Cautionary Note Regarding Forward-Looking Statements

    This earnings release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies’ operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Forward-looking statements speak only as to the date they are made. The Company disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

    Summary Results of Operations (Unaudited)
     
     Three Months Ended Nine Months Ended
    (000s, except per share amounts)9/30/20249/30/2023% Change6/30/2024% Change9/30/20249/30/2023% Change
    Revenues:        
    Commissions$ 183,445 $165,07511.1 $183,3170.1 $ 552,238 $499,983 10.5 
    Principal transactions 137,089 114,84119.4  153,574(10.7) 429,677 336,063 27.9 
    Investment banking 243,182 146,88765.6  233,2814.2  690,412 525,591 31.4 
    Asset management 382,616 333,12714.9  380,7570.5  1,130,849 968,960 16.7 
    Other income 18,705  459nm  16,18015.6  39,835  (940)nm 
    Operating revenues 965,037 760,38926.9  967,109(0.2) 2,843,011 2,329,657 22.0 
    Interest revenue 510,823 505,1981.1  498,1522.5  1,515,803 1,439,532 5.3 
    Total revenues 1,475,860 1,265,58716.6  1,465,2610.7  4,358,814 3,769,189 15.6 
    Interest expense 251,192 220,53613.9  247,3291.6  753,176 566,624 32.9 
    Net revenues 1,224,668 1,045,05117.2  1,217,9320.6  3,605,638 3,202,565 12.6 
    Non-interest expenses:        
    Compensation and benefits 718,065 613,28717.1  722,719(0.6) 2,120,479 1,880,144 12.8 
    Non-compensation operating expenses 289,945 322,335(10.0) 268,3198.1  822,916 821,724 0.1 
    Total non-interest expenses 1,008,010 935,6227.7  991,0381.7  2,943,395 2,701,868 8.9 
    Income before income taxes 216,658 109,42998.0  226,894(4.5) 662,243 500,697 32.3 
    Provision for income taxes 58,153 41,26840.9  61,600(5.6) 174,869 140,645 24.3 
    Net income 158,505 68,161132.5  165,294(4.1) 487,374 360,052 35.4 
    Preferred dividends 9,320 9,321(0.0) 9,321(0.0) 27,961 27,961 0.0 
    Net income available to common shareholders$149,185 $58,840153.5 $155,973(4.4)$459,413 $332,091 38.3 
    Earnings per common share:        
    Basic$1.43 $0.55160.0 $1.50(4.7)$4.41 $3.09 42.7 
    Diluted$1.34 $0.52157.7 $1.41(5.0)$4.16 $2.91 43.0 
    Cash dividends declared per common share$0.42 $0.3616.7 $0.420.0 $1.26 $1.08 16.7 
    Weighted average number of common shares outstanding:     
    Basic 103,966 106,068(2.0) 104,150(0.2) 104,135 107,580 (3.2)
    Diluted 110,994 113,195(1.9) 110,2850.6  110,457 114,170 (3.3)


    Non-GAAP Financial Measures (9)
     
     Three Months EndedNine Months Ended
    (000s, except per share amounts)9/30/20249/30/20239/30/20249/30/2023
    GAAP net income$158,505  $68,161 $487,374  $360,052 
    Preferred dividend 9,320  9,321  27,961  27,961 
    Net income available to common shareholders 149,185  58,840  459,413  332,091 
         
    Non-GAAP adjustments:    
    Merger-related (10) 17,950  13,771  43,925  46,301 
    Restructuring and severance (11) 1,261  —  11,222  — 
    Provision for income taxes (12) (2,126) (5,198) (8,374) (13,455)
    Total non-GAAP adjustments 17,085  8,573  46,773  32,846 
    Non-GAAP net income available to common shareholders$166,270  $67,413 $506,186  $364,937 
         
    Weighted average diluted shares outstanding 110,994  113,195  110,457  114,170 
         
    GAAP earnings per diluted common share$1.42  $0.60 $4.42  $3.15 
    Non-GAAP adjustments 0.16  0.08  0.42  0.29 
    Non-GAAP earnings per diluted common share$1.58  $0.68 $4.84  $3.44 
         
    GAAP earnings per diluted common share available to common shareholders$1.34  $0.52 $4.16  $2.91 
    Non-GAAP adjustments 0.16  0.08  0.42  0.29 
    Non-GAAP earnings per diluted common share available to common shareholders$1.50  $0.60 $4.58  $3.20 


    GAAP to Non-GAAP Reconciliation (9)
     
     Three Months EndedNine Months Ended
    (000s)9/30/20249/30/20239/30/20249/30/2023
    GAAP compensation and benefits$718,065 $613,287 $2,120,479 $1,880,144 
    As a percentage of net revenues 58.6% 58.7% 58.8% 58.7%
    Non-GAAP adjustments:    
    Merger-related (10) (6,101) (7,171) (17,398) (22,947)
    Restructuring and severance (11) (1,261) —  (11,222) — 
    Total non-GAAP adjustments (7,362) (7,171) (28,620) (22,947)
    Non-GAAP compensation and benefits$710,703 $606,116 $2,091,859 $1,857,197 
    As a percentage of non-GAAP net revenues 58.0% 58.0% 58.0% 58.0%
         
    GAAP non-compensation expenses$289,945 $322,335 $822,916 $821,724 
    As a percentage of net revenues 23.7% 30.8% 22.8% 25.7%
    Non-GAAP adjustments:    
    Merger-related (10) (11,166) (6,623) (25,835) (23,380)
    Non-GAAP non-compensation expenses$278,779 $315,712 $797,081 $798,344 
    As a percentage of non-GAAP net revenues 22.8% 30.2% 22.1% 24.9%
    Total adjustments$19,211  $13,771  $55,147  $46,301  


    Footnotes
     
    (1)Represents available to common shareholders.
    (2)Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.”
    (3)Non-GAAP pre-tax margin is calculated by adding total non-GAAP adjustments and dividing it by non-GAAP net revenues. See “Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation.”
    (4)Return on average common equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity.
    (5)Return on average tangible common equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders’ equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also a non-GAAP financial measure, equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $77.9 million and $67.4 million as of September 30, 2024 and 2023, respectively.
    (6)Includes loans held for sale.
    (7)Tangible book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding. Tangible common shareholders’ equity equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets.
    (8)Capital ratios are estimates at time of the Company’s earnings release, October 23, 2024.
    (9)The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain “non-GAAP financial measures” in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a “non-GAAP financial measure” as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company’s financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure.
    (10)Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business.
    (11)The Company recorded severance costs associated with workforce reductions in certain of its foreign subsidiaries.
    (12)Primarily represents the Company’s effective tax rate for the period applied to the non-GAAP adjustments.


    Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271-3610 | www.stifel.com/investor-relations


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