Stifel Reports First Quarter 2024 Results
ST. LOUIS, April 24, 2024 (GLOBE NEWSWIRE) — Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.2 billion for the three months ended March 31, 2024, compared with $1.1 billion a year ago. Net income available to common shareholders was $154.3 million, or $1.40 per diluted common share, compared with $148.2 million, or $1.28 per diluted common share for the first quarter of 2023. Non-GAAP net income available to common shareholders was $163.3 million, or $1.49 per diluted common share for the first quarter of 2024.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Total net revenue of more than $1.16 billion was our second highest quarterly net revenue ever, as the momentum we highlighted at the end of 2023 carried into the first quarter. Record Global Wealth Management revenue and improving market conditions for our Institutional Group drove our top and bottom line growth from the same period a year ago. While the outlook for the remainder of 2024 is not without risk, I remain cautiously optimistic that our diversified business will continue to generate strong returns for this year and beyond.”
Highlights
-- The Company reported net revenues of $1.2 billion, the second best
quarter in its history, driven by higher asset management revenues,
transactional revenues, and capital raising revenues.
-- Non-GAAP net income available to common shareholders of $1.49 per diluted
common share.
-- Record asset management revenues, up 16% over the year-ago quarter.
-- Capital raising revenues increased 56% over the year-ago quarter.
-- Record client assets of $467.7 billion, up 15% over the year-ago quarter.
-- Recruited 22 financial advisors during the quarter, including 4
experienced employee advisors and 11 experienced independent advisors.
-- Credit rating upgrade from S&P Global Ratings to BBB, from BBB-, with a
stable outlook.
-- Non-GAAP pre-tax margin of 19.8% 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 21%.
-- Tangible book value per common share (7) of $30.67, up 2% from prior
year.
Financial Summary (Unaudited)
(000s) 1Q 2024 1Q 2023
----------------------------------------- --------------- ------------
GAAP Financial Highlights:
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Net revenues $1,163,038 $1,106,793
Net income (1) $154,255 $148,219
Diluted EPS (1) $1.40 $1.28
Comp. ratio 58.4% 58.8%
Non-comp. ratio 22.8% 22.2%
Pre-tax margin 18.8% 19.0%
----------------------------------------- --------------- ----------
Non-GAAP Financial Highlights:
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Net revenues $1,163,038 $1,106,790
Net income (1) (2) $163,346 $161,268
Diluted EPS (1) (2) $1.49 $1.40
Comp. ratio (2) 58.0% 58.0%
Non-comp. ratio (2) 22.2% 21.5%
Pre-tax margin (3) 19.8% 20.5%
ROCE (4) 14.3% 13.9%
ROTCE (5) 20.9% 19.9%
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Global Wealth Management (assets and loans in millions)
---------------------------------------------------------- ------------
Net revenues $790,500 $757,186
Pre-tax net income $290,748 $316,109
Total client assets $467,697 $405,988
Fee-based client assets $177,108 $149,541
Bank loans (6) $19,484 $20,935
----------------------------------------- --------------- ----------
Institutional Group
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Net revenues $351,376 $332,613
Equity $206,417 $214,572
Fixed Income $144,959 $118,041
Pre-tax net income $37,109 $33,720
----------------------------------------- --------------- ----------
Global Wealth Management
Global Wealth Management reported record net revenues of $790.5 million for the three months ended March 31, 2024 compared with $757.2 million during the first quarter of 2023. Pre-tax net income was $290.7 million compared with $316.1 million in the first quarter of 2023.
Highlights
-- Recruited 22 financial advisors during the quarter, including 4
experienced employee advisors, and 11 experienced independent advisors,
with total trailing 12 month production of $7 million.
-- Client assets of $467.7 billion, up 15% over the year-ago quarter.
-- Fee-based client assets of $177.1 billion, up 18% over the year-ago
quarter.
Net revenues increased 4% from a year ago:
-- Transactional revenues increased 13% over the year-ago quarter reflecting
an increase in client activity.
-- Asset management revenues increased 17% over the year-ago quarter
reflecting higher asset values.
-- Net interest income decreased 16% over the year-ago quarter driven by
changes in deposit mix, partially offset by higher interest rates.
Total Expenses:
-- Compensation expense as a percent of net revenues increased to 49.3%
primarily as a result of higher compensable revenues.
-- Provision for credit losses was primarily impacted by changes in the
outlook for macroeconomic conditions.
-- Non-compensation operating expenses as a percent of net revenues
increased to 13.9% primarily as a result of higher litigation-related and
FDIC insurance expense, partially offset by revenue growth over the
year-ago quarter.
Summary Results of Operations
(000s) 1Q 2024 1Q 2023
------------------------------ -------- ----------
Net revenues $790,500 $757,186
Transactional revenues 181,753 161,255
Asset management 367,450 315,537
Net interest income 236,269 281,932
Investment banking 4,280 4,158
Other income 748 (5,696)
------------------------------ -------- --------
Total expenses $499,752 $441,077
Compensation expense 389,536 342,423
Provision for credit losses 4,968 4,920
Non-comp. opex 105,248 93,734
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Pre-tax net income $290,748 $316,109
------------------------------ -------- --------
Compensation ratio 49.3% 45.2%
Non-compensation ratio 13.9% 13.1%
Pre-tax margin 36.8% 41.7%
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Institutional Group
Institutional Group reported net revenues of $351.4 million for the three months ended March 31, 2024 compared with $332.6 million during the first quarter of 2023. Pre-tax net income was $37.1 million compared with $33.7 million in the first quarter of 2023.
Highlights
Investment banking revenues increased 1% from a year ago:
-- Advisory revenues decreased 21% from the year-ago quarter driven by lower
levels of completed advisory transactions.
-- Fixed income capital raising revenues increased 57% over the year-ago
quarter primarily driven by higher bond issuances.
-- Equity capital raising revenues increased 63% over the year-ago quarter
driven by higher volumes.
Fixed income transactional revenues increased 24% from a year ago:
-- Fixed income transactional revenues increased from the year-ago quarter
driven by improved market conditions and increased client activity.
Equity transactional revenues increased 3% from a year ago:
-- Equity transactional revenues increased from the year-ago quarter
primarily driven by higher trading gains.
Total Expenses:
-- Compensation expense as a percent of net revenues decreased to 61.4%
primarily as a result of higher revenues.
-- Non-compensation operating expenses as a percent of net revenues remained
consistent with the year-ago quarter.
Summary Results of Operations
------------------------------------------------------
(000s) 1Q 2024 1Q 2023
-------------------------------- -------- --------
Net revenues $351,376 $332,613
Investment banking 209,669 207,721
Advisory 119,252 151,063
Fixed income capital raising 50,116 31,986
Equity capital raising 40,301 24,672
Fixed income transactional 88,654 71,428
Equity transactional 54,083 52,389
Other (1,030) 1,075
-------------------------------- -------- --------
Total expenses $314,267 $298,893
Compensation expense 215,749 205,905
Non-comp. opex. 98,518 92,988
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Pre-tax net income $37,109 $33,720
-------------------------------- -------- --------
Compensation ratio 61.4% 61.9%
Non-compensation ratio 28.0% 28.0%