Stifel Reports Fourth Quarter and Full Year Results
ST. LOUIS, Jan. 24, 2024 (GLOBE NEWSWIRE) — Stifel Financial Corp. (NYSE: SF) today reported net revenues of $1.15 billion for the three months ended December 31, 2023, compared with $1.12 billion a year ago. Net income available to common shareholders of $153.2 million, or $1.38 per diluted common share, compared with $167.3 million, or $1.43 per diluted common share for the fourth quarter of 2022. Non-GAAP net income available to common shareholders of $166.6 million, or $1.50 per diluted common share for the fourth quarter of 2023.
Net revenues of $4.35 billion for the year ended December 31, 2023 compared to $4.39 billion a year ago. Net income available to common shareholders of $485.3 million, or $4.28 per diluted common share, compared with $624.9 million, or $5.32 per diluted common share in 2022. Non-GAAP net income available to common shareholders of $531.5 million, or $4.68 per diluted common share in 2023.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Stifel’s strong 2023 results underscore the importance of our diversified business model as the operating environment was less than ideal. Given our position as a premier wealth management firm and middle market investment bank, as well as the increased scale of our business, we see significant opportunities for top and bottom line growth as market conditions improve.”
Full Year Highlights
-- The Company reported net revenues of $4.35 billion, the third highest
year in its history, as our business navigated an environment that
remains challenging.
-- Non-GAAP net income available to common shareholders of $4.68.
-- Record net interest income, up 28% over 2022.
-- Record asset management revenues, up 3% over 2022.
-- Recruited 171 financial advisors during the year, including 76
experienced employee advisors and 9 experienced independent advisors.
-- Non-GAAP pre-tax margin of 18% was negatively impacted by elevated
provisions for legal and regulatory matters.
-- Return on average tangible common equity (ROTCE) (5) of 17%.
Fourth Quarter Highlights
-- Quarterly net revenues of $1.15 billion.
-- Non-GAAP net income available to common shareholders of $1.50.
-- Recruited 40 financial advisors during the quarter, including 12
experienced employee advisors and 1 experienced independent advisor.
-- Non-GAAP pre-tax margin of 19%.
-- Annualized ROTCE (5) of 21%.
-- Tangible book value per common share (7) of $31.28, up 2% from prior
year.
Other Highlights
-- Board of Directors authorized a 17% increase in common stock dividend
starting in the first quarter of 2024.
Financial Summary (Unaudited)
(000s) 4Q 2023 4Q 2022 FY 2023 FY 2022
-------------- ---------- ---------- ---------- ------------
GAAP Financial Highlights:
-------------------------- ---------- ---------- ------------
Net revenues $1,146,379 $1,121,647 $4,348,944 $4,391,439
Net
income(1) $153,164 $167,301 $485,255 $624,874
Diluted
EPS(1) $1.38 $1.43 $4.28 $5.32
Comp. ratio 58.8% 57.8% 58.7% 58.9%
Non-comp.
ratio 23.2% 21.4% 25.1% 20.9%
Pre-tax
margin 18.0% 20.8% 16.2% 20.2%
--------------
Non-GAAP Financial
Highlights:
-------------------------- ---------- ---------- ------------
Net revenues $1,146,419 $1,121,643 $4,348,958 $4,391,490
Net
income(1)
(2) $166,587 $184,875 $531,524 $675,071
Diluted
EPS(1) (2) $1.50 $1.58 $4.68 $5.74
Comp.
ratio(2) 58.0% 56.5% 58.0% 58.0%
Non-comp.
ratio(2) 22.6% 20.6% 24.3% 20.3%
Pre-tax
margin(3) 19.4% 22.9% 17.7% 21.7%
ROCE(4) 14.6% 16.0% 11.5% 15.0%
ROTCE(5) 21.3% 22.9% 16.6% 21.8%
--------------
Global Wealth Management (assets and loans in
millions)
-------------------------------------------------- ------------
Net revenues $766,028 $744,341 $3,049,962 $2,825,866
Pre-tax net
income $301,360 $317,071 $1,215,822 $1,067,571
Total client
assets $444,318 $389,818
Fee-based
client
assets $165,301 $144,952
Bank
loans(6) $19,730 $20,622
--------------
Institutional
Group
-------------- ---------- ---------- ---------- ------------
Net revenues $359,292 $353,882 $1,226,317 $1,536,017
Equity $200,915 $220,033 $709,286 $935,507
Fixed Income $158,377 $133,849 $517,031 $600,510
Pre-tax net
income $7,771 $44,512 $2,100 $254,132
-------------- ---------- ---------- ---------- ----------
Global Wealth Management
Fourth Quarter Results
Global Wealth Management reported record net revenues of $766.0 million for the three months ended December 31, 2023 compared with $744.3 million during the fourth quarter of 2022. Pre-tax net income was $301.4 million compared with $317.1 million in the fourth quarter of 2022.
Highlights
-- Recruited 40 financial advisors during the quarter, including 12
experienced employee advisors and 1 experienced independent advisor with
total trailing 12 month production of $8 million.
-- Client assets of $444.3 billion, up 14% over the year-ago quarter.
-- Fee-based client assets of $165.3 billion, up 14% over the year-ago
quarter.
Net revenues increased 3% from a year ago:
-- Transactional revenues increased 2% over the year-ago quarter reflecting
an increase in client activity.
-- Asset management revenues increased 14% over the year-ago quarter
reflecting higher asset values.
-- Net interest income decreased 10% from the year-ago quarter driven by
changes in deposit mix, partially offset by higher interest rates.
Total Expenses:
-- Compensation expense as percent of net revenues increased to 46.9%
primarily as a result of higher compensable revenues.
-- Provision for credit losses decreased from a year ago as a result of
reserve reductions in certain asset classes driven by an improved
macroeconomic environment, partially offset by deteriorating conditions
in the commercial real estate sector.
-- Non-compensation operating expenses as a percent of net revenues
increased to 13.8% primarily as a result of higher litigation-related and
insurance expenses, partially offset by revenue growth and a decrease in
the provision for credit losses over the year-ago quarter.
Summary Results of Operations
(000s) 4Q 2023 4Q 2022
Net revenues $766,028 $744,341
Transactional revenues 169,471 165,557
Asset management 330,498 289,445
Net interest income 257,920 284,998
Investment banking 4,562 4,814
Other income 3,577 (473)
------------------------------ -------- --------
Total expenses $464,668 $427,270
Compensation expense 359,376 328,099
Provision for credit losses (37) 6,028
Non-comp. opex 105,329 93,143
------------------------------
Pre-tax net income $301,360 $317,071
------------------------------ -------- --------
Compensation ratio 46.9% 44.1%
Non-compensation ratio 13.8% 13.3%
Pre-tax margin 39.3% 42.6%
------------------------------ -------- --------
Institutional Group
Fourth Quarter Results
Institutional Group reported net revenues of $359.3 million for the three months ended December 31, 2023 compared with $353.9 million during the fourth quarter of 2022. Pre-tax net income was $7.8 million compared with $44.5 million in the fourth quarter of 2022.
Highlights
Investment banking revenues decreased 8% from a year ago:
-- Advisory revenues of $129.4 million decreased 23% from the year-ago
quarter driven by lower levels of completed advisory transactions.
-- Equity capital raising revenues increased 31% over the year-ago quarter
driven by higher volumes.
-- Fixed income capital raising revenues increased 45% over the year-ago
quarter driven by an increase in our public finance business.
Fixed income transactional revenues increased 32% 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 9% from a year ago:
-- Equity transactional revenues increased from the year-ago quarter driven
by higher trading gains.
Total Expenses:
-- Compensation expense as a percent of net revenues increased to 69.3%
primarily driven by lower compensable revenues.
-- Non-compensation operating expenses as a percent of net revenues
increased to 28.5% as a result of higher professional fees,
travel-related expenses, and occupancy costs, as well as continued
investments in technology.
Summary Results of Operations
(000s) 4Q 2023 4Q 2022
-------- --------
Net revenues $359,292 $353,882
Investment banking 201,102 218,891
Advisory 129,378 166,935
Equity capital raising 31,510 24,127
Fixed income capital raising 40,214 27,829
Fixed income transactional 102,019 77,320
Equity transactional 56,501 51,850
Other (330) 5,821