Stifel Reports Third Quarter 2024 Results
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 2023 | 9m 2024 | 9m 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 |
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.
- 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.
- 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 2024 | 3Q 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 |
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 from the year-ago quarter driven by improved client engagement and volatility.
- Equity transactional revenues increased from the year-ago quarter primarily driven by an increase in equities trading commissions.
- 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 2024 | 3Q 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 |
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