Stifel Reports Third Quarter 2024 Results

ST. LOUIS, MO, October 23, 2024 – 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.”

 

 

 

 

 

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

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.

 

 

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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.

 

 

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Other Matters

 

 

 

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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.

 

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Summary Results of Operations (Unaudited)

 

 

 

		Three Months Ended																				Nine Months Ended
(000s, except per share amounts)			9/30/2024				9/30/2023				% Change				6/30/2024				% Change				9/30/2024				9/30/2023				% Change
Revenues:
Commissions			$ 183,445				$ 165,075				11.1				$ 183,317				0.1				$ 552,238				$ 499,983				10.5
Principal transactions			137,089				114,841				19.4				153,574				(10.7)				429,677				336,063				27.9
Investment banking			243,182				146,887				65.6				233,281				4.2				690,412				525,591				31.4
Asset management			382,616				333,127				14.9				380,757				0.5				1,130,849				968,960				16.7
Other income			18,705				459				nm				16,180				15.6				39,835				(940)				nm
Operating revenues			965,037				760,389				26.9				967,109				(0.2)				2,843,011				2,329,657				22.0
Interest revenue			510,823				505,198				1.1				498,152				2.5				1,515,803				1,439,532				5.3
Total revenues			1,475,860				1,265,587				16.6				1,465,261				0.7				4,358,814				3,769,189				15.6
Interest expense			251,192				220,536				13.9				247,329				1.6				753,176				566,624				32.9
Net revenues			1,224,668				1,045,051				17.2				1,217,932				0.6				3,605,638				3,202,565				12.6
Non-interest expenses:
Compensation and benefits			718,065				613,287				17.1				722,719				(0.6)				2,120,479				1,880,144				12.8
Non-compensation operating expenses			289,945				322,335				(10.0)				268,319				8.1				822,916				821,724				0.1
Total non-interest expenses			1,008,010				935,622				7.7				991,038				1.7				2,943,395				2,701,868				8.9
Income before income taxes			216,658				109,429				98.0				226,894				(4.5)				662,243				500,697				32.3
Provision for income taxes			58,153				41,268				40.9				61,600				(5.6)				174,869				140,645				24.3
Net income			158,505				68,161				132.5				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				$58,840				153.5				$155,973				(4.4)				$459,413				$332,091				38.3
Earnings per common share:
Basic			$1.43				$0.55				160.0				$1.50				(4.7)				$4.41				$3.09				42.7
Diluted			$1.34				$0.52				157.7				$1.41				(5.0)				$4.16				$2.91				43.0
Cash dividends declared per common share			$0.42				$0.36				16.7				$0.42				0.0				$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)				110,285				0.6				110,457				114,170				(3.3)

 

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Non-GAAP Financial Measures ⁽⁹⁾

 

 

 

		Three Months Ended								Nine Months Ended
(000s, except per share amounts)			9/30/2024				9/30/2023				9/30/2024				9/30/2023
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

 

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GAAP to Non-GAAP Reconciliation ⁽⁹⁾

 

 

		Three Months Ended								Nine Months Ended
(000s)			9/30/2024				9/30/2023				9/30/2024				9/30/2023
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

 

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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.

 

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