SF Stifel Financial Corp.

Stifel Reports First Quarter 2021 Results

Stifel Reports First Quarter 2021 Results

  • Record net revenues of $1.1 billion, increased 24.3% with the year-ago quarter.
  • Record net revenues in Global Wealth Management and Institutional Group segments.
  • Net income available to common shareholders of $164.7 million, or $1.40 per diluted common share.
  • Non-GAAP net income available to common shareholders of $176.4 million, or $1.50 per diluted common share.
  • Record client assets of $378.6 billion, increased 36.9% compared with the year-ago quarter and 5.9% sequentially.
  • Annualized return on average tangible common shareholders’ equity (1) was 26.5%.
  • Non-GAAP annualized return on average tangible common shareholders’ equity (1) was 28.4%.
  • The Board of Directors declared a $0.15 quarterly dividend per share, an increase of 36% from the prior quarter.

ST. LOUIS, April 27, 2021 (GLOBE NEWSWIRE) -- Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $164.7 million, or $1.40 per diluted common share on record net revenues of $1.1 billion for the three months ended March 31, 2021, compared with net income available to common shareholders of $81.7 million, or $0.71 per diluted common share,(2) on net revenues of $913.0 million for the first quarter of 2020.

For the three months ended March 31, 2021, the Company reported non-GAAP net income available to common shareholders of $176.4 million, or $1.50 per diluted common share. The Company’s reported GAAP net income for the three months ended March 31, 2021 was primarily impacted by merger-related expenses. Details discussed below and in the “Non-GAAP Financial Matters” section.

Chairman’s Comments

“I am pleased with our first quarter results as we generated record net revenue and the second highest earnings per share in Stifel’s history,” stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel. “The strength of our performance was driven by record revenue in both our operating segments, Global Wealth Management and Institutional Group. The operating environment in 2021 has been a tailwind to our business as the equity markets are up, client engagement is strong, credit remains solid, and investment banking activity surged. Our results in the quarter again illustrate the benefits of our diverse business as the investments we have made have enabled us to participate in these robust market conditions to a far greater magnitude than we could have in years past. Looking forward, Stifel is well positioned for another strong year.”

Financial Highlights (Unaudited) Three Months Ended 
($ in 000s, except per share data) GAAP

3/31/21
  GAAP

3/31/20
  %

Change
  GAAP

12/31/20
  %

Change
   Non-GAAP (3)

3/31/21
  Non-GAAP (3)

3/31/20
  %

Change
 
Net revenues $1,134,789  $913,034   24.3  $1,059,910   7.1   $1,134,980  $913,213   24.3 
Net income $173,015  $86,589   99.8  $188,469   (8.2)  $184,714  $96,777   90.9 
Preferred dividends  8,289   4,844   71.1   7,677   8.0    8,289   4,844   71.1 
Net income available to common shareholders $164,726  $81,745   101.5  $180,792   (8.9)  $176,425  $91,933   91.9 
Earnings per diluted common share (2) $1.47  $0.75   96.0  $1.61   (8.7)  $1.57  $0.84   86.9 
Earnings per diluted common share available to common shareholders (2) $1.40  $0.71   97.2  $1.55   (9.7)  $1.50  $0.80   87.5 
Compensation ratio  61.5%  63.2%      58.6%       60.9%  62.5%    
Non-compensation ratio  18.4%  24.2%      19.3%       17.7%  23.4%    
Pre-tax operating margin (4)  20.1%  12.6%      22.1%       21.4%  14.1%    

Net Revenues

Net revenues were a record $1.1 billion for the first quarter of 2021, a 24.3% increase from the first quarter of 2020 and a 7.1% increase from the fourth quarter of 2020. Net revenues, compared with the first quarter of 2020, reflected significantly higher investment banking revenues, asset management and service fees, and increased brokerage revenues, partially offset by lower net interest income. Net revenues, compared with the fourth quarter of 2020, reflected increased capital raising revenues, growth in brokerage revenues and asset management and services fees, as well as higher net interest income, partially offset by lower advisory fee revenues.

Brokerage Revenues

Brokerage revenues, defined as commissions and principal transactions, were $378.6 million, an 8.3% increase compared with the first quarter of 2020 and a 10.5% increase compared with the fourth quarter of 2020.

  Three Months Ended 
($ in 000s) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Global Wealth Management $201,104  $179,879   11.8  $185,719   8.3 
Institutional brokerage:                    
Equity capital markets  79,121   70,195   12.7   69,201   14.3 
Fixed income capital markets  98,395   99,688   (1.3)  87,664   12.2 
Total institutional brokerage  177,516   169,883   4.5   156,865   13.2 
Total brokerage revenues (5) $378,620  $349,762   8.3  $342,584   10.5 
  • Global Wealth Management brokerage revenues were $201.1 million, an 11.8% increase compared with the first quarter of 2020 and an 8.3% increase compared with the fourth quarter of 2020.
  • Institutional equity brokerage revenues were $79.1 million, a 12.7% increase compared with the first quarter of 2020 and a 14.3% increase compared with the fourth quarter of 2020.
  • Institutional fixed income brokerage revenues were $98.4 million, a 1.3% decrease compared with the first quarter of 2020 and a 12.2% increase compared with the fourth quarter of 2020.

Investment Banking Revenues

Investment banking revenues were a record $339.3 million, an 89.1% increase compared with the first quarter of 2020 and a 0.5% increase compared with the fourth quarter of 2020.

   Three Months Ended 
($ in 000s) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Capital raising:                    
Global Wealth Management $13,549  $10,314   31.4  $9,562   41.7 
                     
Equity capital markets  147,419   60,195   144.9   104,097   41.6 
Fixed income capital markets  47,838   32,887   45.5   50,613   (5.5)
Institutional Group  195,257   93,082   109.8   154,710   26.2 
Total capital raising (5)  208,806   103,396   101.9   164,272   27.1 
Advisory fees  130,482   76,072   71.5   173,395   (24.7)
Total investment banking (5) $339,288  $179,468   89.1  $337,667   0.5 
  • Global Wealth Management capital raising revenues were $13.5 million, a 31.4% increase compared with the first quarter of 2020 and a 41.7% increase compared with the fourth quarter of 2020.
  • Institutional equity capital raising revenues were $147.4 million, a 144.9% increase compared with the first quarter of 2020 and a 41.6% increase compared with the fourth quarter of 2020.
  • Institutional fixed income capital raising revenues were $47.8 million, a 45.5% increase compared with the first quarter of 2020 and a 5.5% decrease compared with the fourth quarter of 2020.
  • Advisory fee revenues were $130.5 million, a 71.5% increase compared with the first quarter of 2020 and a 24.7% decrease compared with the fourth quarter of 2020.

Asset Management and Service Fee Revenues

Asset management and service fee revenues were a record $278.1 million, a 17.0% increase compared with the first quarter of 2020 and an 11.3% increase compared with the fourth quarter of 2020. The increase from the comparative period in 2020 is primarily attributable to higher asset values and strong fee-based asset flows. Please refer to the Asset Management and Service Fee Break-down table for additional details.

Net Interest Income

Net interest income was $113.1 million, a 17.3% decrease compared with the first quarter of 2020 and a 7.3% increase compared with the fourth quarter of 2020. The decrease from the first quarter of 2020 was primarily driven by the impact of lower interest rates. Please refer to the Net Interest Income Analysis table for additional details.

  • Interest income was $127.5 million, a 20.9% decrease compared with the first quarter of 2020 and a 6.4% increase compared with the fourth quarter of 2020.
  • Interest expense was $14.4 million, a 40.7% decrease compared with the first quarter of 2020 and a 0.5% decrease compared with the fourth quarter of 2020.

Compensation and Benefits Expenses

For the quarter ended March 31, 2021, compensation and benefits expenses were $697.9 million, which included $6.2 million of merger-related and severance expenses (non-GAAP adjustments). This compares with $577.2 million in the first quarter of 2020 and $621.3 million in the fourth quarter of 2020. Excluding the non-GAAP adjustments, compensation and benefits as a percentage of net revenues were 60.9% in the first quarter of 2021 (non-GAAP measure).

The increase in compensation and benefits expenses, compared with the first quarter of 2020, is primarily attributable to revenue growth, as well as the change in the composition of revenues.

  Three Months Ended 
($ in 000s) 3/31/21  3/31/20 
GAAP compensation and benefits $697,914  $577,179 
As a percentage of net revenues  61.5%  63.2%
Non-GAAP adjustments: (6)        
Merger-related and severance  (6,174)  (6,427)
Non-GAAP compensation and benefits $691,740  $570,752 
As a percentage of non-GAAP net revenues  60.9%  62.5%

Non-Compensation Operating Expenses

For the quarter ended March 31, 2021, non-compensation operating expenses were $209.0 million, which included $9.1 million of merger-related expenses (non-GAAP adjustments). This compares with $220.7 million in the first quarter of 2020 and $203.9 million in the fourth quarter of 2020. Excluding the non-GAAP adjustments, non-compensation operating expenses as a percentage of net revenues for the quarter ended March 31, 2021 were 17.7% (non-GAAP measure).

The decrease in non-compensation operating expenses, compared with the first quarter of 2020, is primarily attributable to the release of the allowance for credit losses driven by improvements in the outlook for macroeconomic conditions, and lower travel, entertainment, and conference-related expenses. In addition, the net provisions for litigation matters were lower. These decreases were partially offset by higher volume-related expenses, including investment banking transaction expenses, reflecting an increase in activity levels. In addition, occupancy expense and professional fees were higher. In addition, non-compensation operating expenses for the three months ended March 31, 2020 were impacted by an increase in the provision for credit losses as a result of the impact of COVID-19 on the broader economic environment.

  Three Months Ended 
($ in 000s) 3/31/21  3/31/20 
GAAP non-compensation expenses $208,983  $220,749 
As a percentage of net revenues  18.4%  24.2%
Non-GAAP adjustments: (6)        
Merger-related  (9,064)  (6,904)
Non-GAAP non-compensation expenses $199,919  $213,845 
As a percentage of non-GAAP net revenues  17.7%  23.4%

Provision for Income Taxes

The GAAP effective income tax rate for the quarter ended March 31, 2021 was 24.1%. This compares with an effective income tax rate of 24.8% for the first quarter of 2020 and 19.7% for the fourth quarter of 2020. The adjusted non-GAAP effective income tax rate for the quarter ended March 31, 2021 was 24.1%.

  Three Months Ended 
($ in 000s) 3/31/21  3/31/20 
GAAP provision for income taxes $54,877  $28,517 
GAAP effective tax rate  24.1%  24.8%
Non-GAAP adjustments: (6)        
Merger-related and severance  3,670   3,300 
Other  60   22 
   3,730   3,322 
Non-GAAP provision for income taxes $58,607  $31,839 
Non-GAAP effective tax rate  24.1%  24.8%

Conference Call Information

Stifel Financial Corp. will host its first quarter 2021 financial results conference call on Tuesday, April 27, 2021, 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 (877) 876-9938 and referencing conference ID 7880334. 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, . 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 business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Century Securities Associates, Inc. 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 . For global disclosures, please visit .

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 c        ould 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, 2020. 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.

Statements about the effects of the COVID-19 pandemic on the Company’s business, results, financial position and liquidity may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected.

Summary Results of Operations (Unaudited) 
  Three Months Ended 
($ in 000s, except per share amounts) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Revenues:                    
Commissions $213,614  $211,098   1.2  $199,847   6.9 
Principal transactions  165,006   138,666   19.0   142,737   15.6 
Brokerage revenues  378,620   349,764   8.3   342,584   10.5 
                     
Capital raising  208,806   103,396   101.9   164,276   27.1 
Advisory fees  130,482   76,072   71.5   173,395   (24.7)
Investment banking  339,288   179,468   89.1   337,671   0.5 
Asset management and service fees  278,147   237,775   17.0   249,928   11.3 
Other income  25,634   9,207   178.4   24,366   5.2 
Operating revenues  1,021,689   776,214   31.6   954,549   7.0 
Interest revenue  127,540   161,177   (20.9)  119,876   6.4 
Total revenues  1,149,229   937,391   22.6   1,074,425   7.0 
Interest expense  14,440   24,357   (40.7)  14,515   (0.5)
Net revenues  1,134,789   913,034   24.3   1,059,910   7.1 
                     
Non-interest expenses:                    
Compensation and benefits  697,914   577,179   20.9   621,344   12.3 
Occupancy and equipment rental  72,032   66,073   9.0   73,729   (2.3)
Communication and office supplies  41,825   41,124   1.7   40,443   3.4 
Commissions and floor brokerage  15,703   14,842   5.8   12,687   23.8 
Provision for credit losses  (5,252)  16,068   (132.7)    n/m 
Other operating expenses  84,675   82,642   2.5   77,006   10.0 
Total non-interest expenses  906,897   797,928   13.7   825,209   9.9 
Income before income taxes  227,892   115,106   98.0   234,701   (2.9)
Provision for income taxes  54,877   28,517   92.4   46,232   18.7 
Net income  173,015   86,589   99.8   188,469   (8.2)
Preferred dividends  8,289   4,844   71.1   7,677   8.0 
Net income available to common shareholders $164,726  $81,745   101.5  $180,792   (8.9)
Earnings per common share: (2)                    
Basic $1.53  $0.76   101.3  $1.70   (10.0)
Diluted $1.40  $0.71   97.2  $1.55   (9.7)
                     
Cash dividends declared per common share (2) $0.15  $0.11   36.4  $0.11   36.4 
                     
Weighted average number of common shares outstanding: (2)                    
Basic  107,746   106,929   0.8   106,041   1.6 
Diluted  117,875   114,929   2.6   116,828   0.9 



Summary Segment Results (Unaudited) 
  Three Months Ended 
($ in 000s) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Net revenues:                    
Global Wealth Management $631,495  $582,956   8.3  $575,252   9.8 
Institutional Group  506,081   332,238   52.3   489,448   3.4 
Other  (2,787)  (2,160) n/m   (4,790) n/m 
Total net revenues $1,134,789  $913,034   24.3  $1,059,910   7.1 
                     
Operating expenses:                    
Global Wealth Management $408,264  $388,789   5.0  $378,790   7.8 
Institutional Group  388,893   290,498   33.9   365,793   6.3 
Other  109,740   118,641   (7.5)  80,626   36.1 
Total operating expenses $906,897  $797,928   13.7  $825,209   9.9 
                     
Operating contribution:                    
Global Wealth Management $223,231  $194,167   15.0  $196,462   13.6 
Institutional Group  117,188   41,740   180.8   123,655   (5.2)
Other  (112,527)  (120,801)  (6.8)  (85,416)  31.7 
Income before income taxes $227,892  $115,106   98.0  $234,701   (2.9)
                     
As a percentage of net revenues:                   
Compensation and benefits                    
Global Wealth Management  53.3   51.2       52.8     
Institutional Group  59.6   62.0       58.1     
Non-comp. operating expenses                    
Global Wealth Management  11.4   15.5       13.0     
Institutional Group  17.2   25.4       16.6     
Income before income taxes                    
Global Wealth Management  35.3   33.3       34.2     
Institutional Group  23.2   12.6       25.3     
Consolidated pre-tax margin  20.1   12.6       22.1     



Financial metrics (unaudited):As of and For the Three Months Ended 
($ in 000s, except percentages and per share amounts)3/31/21 3/31/20 12/31/20 
Total assets$28,141,581 $25,896,006 $26,604,254 
Total shareholders' equity$4,318,872 $3,470,326 $4,238,766 
Book value per common share (2) (7)$35.96 $30.75 $35.91 
Return on common equity (8) 17.6% 10.0% 20.0%
Non-GAAP return on common equity (3) (8) 18.8% 11.2% 21.6%
Return on tangible common equity (1) 26.5% 16.6% 30.8%
Non-GAAP return on tangible common equity (1) (3) 28.4% 18.6% 33.3%
Tier 1 common capital ratio (9) 16.0% 14.3% 16.5%
Tier 1 risk based capital ratio (9) 19.4% 16.6% 20.2%
Tier 1 leverage capital ratio (9) 11.5% 9.6% 11.9%
Pre-tax margin on net revenues 20.1% 12.6% 22.1%
Non-GAAP pre-tax margin on net revenues (3) (4) 21.4% 14.1% 23.8%
Effective tax rate 24.1% 24.8% 19.7%
Non-GAAP effective tax rate (3) 24.1% 24.8% 19.7%



Statistical Information (unaudited): As of and For the Three Months Ended 
($ in 000s, except financial advisors and locations) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Financial advisors  2,182   2,130   2.4   2,187   (0.2)
Independent contractors  92   94   (2.1)  93   (1.1)
Total financial advisors  2,274   2,224   2.2   2,280   (0.3)
Locations  446   447   (0.2)  450   (0.9)
Total client assets $378,615,000  $276,627,000   36.9  $357,429,000   5.9 
Fee-based client assets $137,804,000  $93,633,000   47.2  $129,372,000   6.5 
Client money market and insured product $23,616,000  $17,234,000   37.0  $22,837,000   3.4 
Secured client lending (10) $3,124,545  $3,148,790   (0.8) $2,816,973   10.9 

  

   Asset Management and Service Fee Break-down (unaudited) 
Asset Management and Service Fee Revenues: Three Months Ended 
($ in 000s) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Private Client Group (11) $233,805  $193,260   21.0  $208,238   12.3 
Asset Management  30,114   29,762   1.2   28,298   6.4 
Third-party Bank Sweep Program  2,102   3,308   (36.5)  2,782   (24.4)
Other (12)  12,126   11,445   6.0   10,610   14.3 
Total asset management and service fee revenues $278,147  $237,775   17.0  $249,928   11.3 
                     
Fee-based Assets: Three Months Ended 
($ in millions) 3/31/21  3/31/20  % Change  12/31/20  % Change 
Private Client Group (11) $119,836  $80,617   48.6  $111,995   7.0 
Asset Management  31,115   22,752   36.8   29,864   4.2 
Elimination (13)  (13,147)  (9,736)  35.0   (12,487)  5.3 
Total fee-based assets $137,804  $93,633   47.2  $129,372   6.5 
                     
Third-party Bank Sweep Program $6,455  $1,491   332.9  $6,555   (1.5)
                     
ROA (bps) (14)                    
Private Client Group (11)  83.5   83.9       83.8     
Asset Management  38.7   38.0       37.9     
Third-party Bank Sweep Program  12.3   95.0       18.9     



Consolidated Net Interest Income Analysis (Unaudited): 
                                     
  Three Months Ended 
  March 31, 2021  March 31, 2020  December 31, 2020 
($ in millions, except percentages) Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
  Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
  Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
 
Interest-earning assets:                                    
Cash and federal funds sold $1,812.2  $0.9   0.20% $931.8  $3.7   1.58% $1,545.2  $1.1   0.28%
Financial instruments owned  807.8   2.9   1.43   1,076.6   4.6   1.70   670.9   2.2   1.33 
Margin balances  961.6   6.1   2.53   1,231.7   10.1   3.29   869.0   5.9   2.70 
Investments:                                    
Asset-backed securities  4,724.6   21.3   1.80   4,538.5   37.0   3.26   4,826.6   21.5   1.78 
Mortgage-backed securities  905.9   3.3   1.44   1,094.2   6.0   2.18   758.8   2.6   1.38 
Corporate fixed income securities  639.8   5.4   3.37   732.8   5.0   2.76   602.8   4.1   2.74 
Other  6.4      2.06   22.3   0.1   2.14   6.8   0.1   2.10 
Total Investments  6,276.7   30.0   1.91   6,387.8   48.1   3.01   6,195.0   28.3   1.83 
Loans:                                    
Commercial and industrial  4,573.6   39.5   3.45   3,560.3   38.0   4.27   4,206.7   32.7   3.11 
Residential real estate  3,994.5   27.0   2.71   3,416.1   25.3   2.96   3,820.8   27.7   2.90 
Securities-based loans  2,002.3   9.7   1.94   2,063.8   16.5   3.19   1,899.7   9.6   2.03 
Commercial real estate  371.0   3.3   3.51   445.0   5.8   5.22   379.1   3.3   3.52 
Loans held for sale  534.4   2.8   2.09   374.5   4.0   4.26   489.1   3.0   2.45 
Other  639.9   4.9   3.07   500.1   5.6   4.46   649.3   4.9   3.02 
Total Loans  12,115.7   87.2   2.88   10,359.8   95.2   3.67   11,444.7   81.2   2.84 
Other interest-bearing assets  596.2   0.4   0.32   607.9   (0.5)  (0.30)  469.6   1.2   1.00 
Total interest-earning assets/interest income  22,570.2   127.5   2.26   20,595.6   161.2   3.13   21,194.4   119.9   2.26 
Interest-bearing liabilities:                                    
Senior notes  1,112.5   12.1   4.35   1,017.1   11.2   4.40   1,311.0   14.4   4.39 
Deposits  17,629.6   1.3   0.03   15,377.9   9.6   0.25   16,429.1   1.2   0.03 
FHLB  15.8      0.29   590.5   2.4   1.59   137.0   0.1   0.34 
Other interest-bearing liabilities  1,209.6   1.0   0.34   1,719.4   1.2   0.29   513.9   (1.2)  (0.94)
Total interest-bearing liabilities/interest expense $19,967.5  $14.4   0.29% $18,704.9  $24.4   0.52% $18,391.0  $14.5   0.32%
Net interest income/margin     $113.1   2.00%     $136.8   2.66%     $105.4   1.99%



Stifel Bancorp, Inc. (15) Net Interest Income Analysis (Unaudited): 
                                     
  Three Months Ended 
  March 31, 2021  March 31, 2020  December 31, 2020 
($ in millions, except percentages) Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
  Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
  Average

Balance
  Interest

Income/

Expense
  Average

Interest

Rate
 
Interest-earning assets:                                    
Cash and federal funds sold $962.3  $0.3   0.12% $446.0  $1.2   1.10% $546.7  $0.2   0.15%
Investments  6,276.7   30.0   1.91   6,387.8   48.1   3.01   6,195.0   28.3   1.83 
Loans  12,115.7   87.2   2.88   10,359.8   95.2   3.67   11,444.7   81.2   2.84 
Other interest-bearing assets  40.7   0.2   2.23   59.6   0.6   4.02   42.8   0.4   3.20 
Total interest-earning assets/interest income  19,395.4   117.7   2.43   17,253.2   145.1   3.36   18,229.2   110.1   2.42 
Interest-bearing liabilities:                                    
Deposits  17,629.6   1.3   0.03   15,377.9   9.6   0.25   16,429.1   1.2   0.03 
FHLB  15.8      0.29   590.5   2.4   1.59   137.0   0.1   0.34 
Other interest-bearing liabilities  1.4      7.92   1.6      7.09   1.4   0.1   9.87 
Total interest-bearing liabilities/interest expense $17,646.8   1.3   0.03% $15,970.0   12.0   0.30% $16,567.5   1.4   0.03%
Net interest income/margin     $116.4   2.40%     $133.1   3.09%     $108.7   2.39%



Stifel Bancorp, Inc. (15) - a component of Global Wealth Management 
  
Selected operating data (unaudited):Three Months Ended 
($ in 000s, except percentages)3/31/21  3/31/20  % Change  12/31/20  % Change 
Net interest income$116,387  $133,131   (12.6) $108,699   7.1 
Credit loss provision/(release) (5,252)  16,068   (132.7)    n/m 
Charge-offs 934   20  n/m     n/m 
Net interest margin 2.40%  3.09% (69) bps   2.39% 1 bps 



Financial Metrics (unaudited): As of 
($ in 000s, except percentages) 3/31/21  3/31/20  12/31/20 
Total assets $20,500,414  $18,442,914  $18,867,133 
Total shareholders' equity  1,474,473   1,224,307   1,399,382 
Total loans, net (includes loans held for sale)  12,422,234   10,565,287   11,558,008 
Total deposits  18,715,133   16,880,933   17,396,497 
Available-for-sale securities, at fair value  2,189,664   3,363,961   2,229,878 
Held-to-maturity securities, at amortized cost  4,758,910   3,083,065   4,114,840 
Commercial and industrial  4,923,494   3,813,862   4,296,089 
Residential real estate  4,158,033   3,495,136   3,956,670 
Securities-based loans  2,089,747   1,945,371   1,933,974 
Commercial real estate  374,736   399,732   366,485 
Loans held for sale  330,521   570,787   551,248 
Stifel Bank & Trust:            
Common equity tier 1 capital ratio (9)  11.1%  11.7%  11.4%
Tier 1 capital ratio (9)  11.1%  11.7%  11.4%
Total capital ratio (9)  12.4%  13.0%  12.7%
Tier 1 leverage ratio (9)  7.1%  7.1%  7.1%
Stifel Bank:            
Common equity tier 1 capital ratio (9)  18.5%  15.6%  16.5%
Tier 1 capital ratio (9)  18.5%  15.6%  16.5%
Total capital ratio (9)  19.2%  16.5%  17.7%
Tier 1 leverage ratio (9)  7.3%  7.3%  7.3%
             
Credit Metrics:            
Allowance for credit losses $129,109  $121,017  $135,295 
Allowance as a percentage of retained loans  1.06%  1.20%  1.22%
Net charge-offs as a percentage of average loans  0.01%  0.00%  0.00%
Total nonperforming assets $13,756  $14,616  $13,925 
Nonperforming assets as % of total assets  0.07%  0.08%  0.07%



Global Wealth Management Summary Results of Operations (Unaudited) 
  Three Months Ended 
($ in 000s) 3/31/21  3/31/20  %

Change
  12/31/20  %

Change
 
Revenues:                    
Commissions $147,505  $136,897   7.7  $139,594   5.7 
Principal transactions  53,599   42,982   24.7   46,125   16.2 
Brokerage revenues  201,104   179,879   11.8   185,719   8.3 
                     
Asset management and service fees  278,109   237,760   17.0   249,907   11.3 
Net interest  117,775   138,682   (15.1)  110,521   6.6 
Investment banking (16)  13,549   10,333   31.1   9,562   41.7 
Other income  20,958   16,302   28.6   19,543   7.2 
Net revenues  631,495   582,956   8.3   575,252   9.8 
Non-interest expenses:                    
Compensation and benefits  336,721   298,370   12.9   303,961   10.8 
Non-compensation operating expenses  71,543   90,419   (20.9)  74,829   (4.4)
Total non-interest expenses  408,264   388,789   5.0   378,790   7.8 
Income before income taxes $223,231  $194,167   15.0  $196,462   13.6 
                     
As a percentage of net revenues:                    
Compensation and benefits  53.3   51.2       52.8     
Non-compensation operating expenses  11.4   15.5       13.0     
Income before income taxes  35.3   33.3       34.2     



Institutional Group Summary Results of Operations (Unaudited) 
  Three Months Ended 
($ in 000s) 3/31/21  3/31/20  %

Change
  12/31/20  %

Change
 
Revenues:                    
Commissions $66,109  $74,198   (10.9) $60,253   9.7 
Principal transactions  111,407   95,685   16.4   96,612   15.3 
Brokerage revenues  177,516   169,883   4.5   156,865   13.2 
Capital raising  195,257   93,082   109.8   154,710   26.2 
Advisory fees  130,482   76,053   71.6   173,399   (24.8)
Investment banking  325,739   169,135   92.6   328,109   (0.7)
Other (17)  2,826   (6,780) n/m   4,474   (36.8)
Net revenues  506,081   332,238   52.3   489,448   3.4 
Non-interest expenses:                    
Compensation and benefits  301,624   205,988   46.4   284,607   6.0 
Non-compensation operating expenses  87,269   84,510   3.3   81,186   7.5 
Total non-interest expenses  388,893   290,498   33.9   365,793   6.3 
Income before income taxes $117,188  $41,740   180.8  $123,655   (5.2)
                     
As a percentage of net revenues:                    
Compensation and benefits  59.6   62.0       58.1     
Non-compensation operating expenses  17.2   25.4       16.6     
Income before income taxes  23.2   12.6       25.3     



Non-GAAP Financial Measures

The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the three months ended March 31, 2021, March 31, 2020, and December 31, 2020. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company’s core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company’s results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of on-going business.

A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of the Company’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company’s financial performance should be considered together.

The following table provides details with respect to reconciling net income and earnings per diluted common share on a GAAP basis for the three months ended March 31, 2021, March 31, 2020, and December 31, 2020 to net income and earnings per diluted common share on a non-GAAP basis for the same period.

  Three Months Ended 
($ in 000s) 3/31/21  3/31/20  12/31/20 
GAAP net income $173,015  $86,589  $188,469 
Preferred dividend  8,289   4,844   7,677 
Net income available to common shareholders  164,726   81,745   180,792 
             
Non-GAAP adjustments:            
Merger-related and severance (18)  15,429   13,510   17,706 
Provision for income taxes (19)  (3,730)  (3,322)  (3,444)
Total non-GAAP adjustments  11,699   10,188   14,262 
Non-GAAP net income available to common shareholders $176,425  $91,933  $195,054 
             
Weighted average diluted shares outstanding (2)  117,875   114,929   116,828 
             
GAAP earnings per diluted common share (2) $1.47  $0.75  $1.61 
Non-GAAP adjustments (2)  0.10   0.09   0.13 
Non-GAAP earnings per diluted common share (2) $1.57  $0.84  $1.74 
             
GAAP earnings per diluted common share available to common shareholders (2) $1.40  $0.71  $1.55 
Non-GAAP adjustments (2)  0.10   0.09   0.12 
Non-GAAP earnings per diluted common share available to common shareholders (2) $1.50  $0.80  $1.67 

Footnotes

(1) Annualized return on average tangible common shareholders’ equity (“ROTE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders’ equity or, in the case of non-GAAP ROTE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible shareholders’ equity. Tangible common shareholders’ equity 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 $51.7 million, $47.2 million, and $50.7 million, as of March 31, 2021 and 2020, and December 31, 2020, respectively. Historical periods have been restated to conform with the current period presentation.

(2) All share and per share information has been retroactively adjusted to reflect the December 2020 three-for-two stock split.

(3) Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.”

(4) Non-GAAP pre-tax margin for the three months ended March 31, 2021 of 21.4% is calculated by adding non-GAAP adjustments of $15.4 million to our GAAP income before income taxes of $227.9 million and dividing it by non-GAAP net revenues for the quarter of $1.1 billion. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.”

(5) Excludes revenue included in the Other segment.

(6) See further discussion of non-GAAP adjustments under “Non-GAAP Financial Measures.”

(7) Book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding.

(8) Annualized return on average common shareholders’ equity (“ROE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity.

(9) Capital ratios are estimates at time of the Company’s earnings release.

(10) Includes client margin balances held by the Company’s broker-dealer subsidiaries and securities-based loans held at the Company’s bank subsidiaries.

(11) Includes Private Client Group and Trust Business.

(12) Includes fund networking fees, retirement fees, transaction/handling fees, and ACAT fees.

(13) Asset management assets managed in Private Client Group or Trust accounts.

(14) Return on assets (ROA) is calculated based on prior period-end balances for Private Client Group, period-end balances for Asset Management, and average quarterly balances for Individual Program Banks.

(15) Includes Stifel Bank & Trust, Stifel Bank, Stifel Trust Company, N.A, and Stifel Trust Company Delaware, N.A.

(16) Includes capital raising and advisory fees.

(17) Includes net interest, asset management and service fees, and other income.

(18) Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, 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.

(19) See details of non-GAAP adjustments under “Provision for Income Taxes.”

Media Contact: Neil Shapiro (212) 271-3447

Investor Contact: Joel Jeffrey (212) 271-3610

 



EN
27/04/2021

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