January 29, 2021
FOR IMMEDIATE RELEASE
Media Contact: Neil Shapiro (212) 271-3447
Investor Contact: Joel Jeffrey (212) 271-3610
www.stifel.com/investor-relations
STIFEL REPORTS RECORD FOURTH QUARTER AND FULL-YEAR RESULTS
- 25th consecutive year of record net revenues of $3.8 billion, an increase of 12.4% compared with 2019.
- Quarterly record net revenues of $1.1 billion, an increase of 20.0% over the third quarter of 2020.
- Record quarterly net income available to common shareholders of $180.8 million, or $1.55 per diluted common share.(1)
- Record non-GAAP net income available to common shareholders of $195.1 million, or $1.67 per diluted common share.(1)
- Record client assets of $357.4 billion, increased 8.5% compared with the year-ago quarter.
- Annualized return on average tangible common shareholders' equity(2) was 30.8%.
- Non-GAAPannualized return on average tangible common shareholders' equity(2) was 33.3%.
- Increasing quarterly dividend by approximately 32% to $0.15 per common share starting in first quarter of 2021.
ST. LOUIS, MO - Stifel Financial Corp. (NYSE: SF) today reported record net income available to common shareholders of $180.8 million, or $1.55 per diluted common share(1) on record net revenues of $1.1 billion for the three months ended December 31, 2020, compared with net income available to common shareholders of $125.8 million, or $1.08 per diluted common share,(1) on net revenues of $944.3 million for the fourth quarter of 2019.
For the three months ended December 31, 2020, the Company reported record non-GAAP net income available to common shareholders of $195.1 million, or $1.67 per diluted common share.(1) The Company's reported GAAP net income for the three months ended December 31, 2020 was primarily impacted by merger-related expenses. Details discussed below and in the "Non-GAAP Financial Matters" section.
Chairman's Comments
"Stifel's performance in 2020 was a testament to the strength of our business model as we were able to navigate market challenges and generated our 25th consecutive year of record net revenue. We entered the year expecting two of our primary growth drivers to be continued strength in net interest income and advisory revenue. However, following the pandemic outbreak, Stifel and our associates were able to successfully pivot to the subsequent changes in the market environment and we finished the year with record results from our brokerage and capital raising businesses. Our record revenue also generated record non-GAAP earnings per share of $4.56 and non-GAAP return on tangible equity of nearly 25%," stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.
Mr. Kruszewski continued, "We entered 2021 with record recruiting and investment banking pipelines, record client assets, and more than $500 million of excess capital. These factors, combined with our long history of profitable growth, drive my optimism for 2021 and beyond."
1
Fourth Quarter Review
Quarterly Highlights
- Record net revenues of $1.1 billion, increased 12.2% with the year-ago quarter, and increased 20.0% sequentially.
- Record net revenues in Global Wealth Management and Institutional Group segments.
- Record net income available to common shareholders of $180.8 million, or $1.55 per diluted common share.(1)
- Record non-GAAP net income available to common shareholders of $195.1 million, or $1.67 per diluted common share.(1)
Financial Highlights (Unaudited) | Three Months Ended | |||||||||||||||||||||||||||
Non- | Non- | |||||||||||||||||||||||||||
GAAP | GAAP | % | GAAP | % | GAAP (3) | GAAP (3) | % | |||||||||||||||||||||
($ in 000s, except per share data) | 12/31/20 | 12/31/19 | Change | 9/30/20 | Change | 12/31/20 | 12/31/19 | Change | ||||||||||||||||||||
Net revenues | $ | 1,059,910 | $ | 944,251 | 12.2 | $ | 883,300 | 20.0 | $ | 1,059,883 | $ | 944,425 | 12.2 | |||||||||||||||
Net income applicable to Stifel Financial Corp. | $ | 188,469 | $ | 130,690 | 44.2 | $ | 120,527 | 56.4 | $ | 202,731 | $ | 151,442 | 33.9 | |||||||||||||||
Preferred dividends | 7,677 | 4,843 | 58.5 | 9,897 | (22.4 | ) | 7,677 | 4,843 | 58.5 | |||||||||||||||||||
Net income available to common shareholders | $ | 180,792 | $ | 125,847 | 43.7 | $ | 110,630 | 63.4 | $ | 195,054 | $ | 146,599 | 33.1 | |||||||||||||||
Earnings per diluted common share (1) | $ | 1.61 | $ | 1.12 | 43.8 | $ | 1.06 | 51.9 | $ | 1.74 | $ | 1.30 | 33.8 | |||||||||||||||
Earnings per diluted common share available to | ||||||||||||||||||||||||||||
common shareholders (1) | $ | 1.55 | $ | 1.08 | 43.5 | $ | 0.97 | 59.8 | $ | 1.67 | $ | 1.26 | 32.5 | |||||||||||||||
Compensation ratio | 58.6 | % | 60.0 | % | 60.4 | % | 57.9 | % | 58.3 | % | ||||||||||||||||||
Non-compensation ratio | 19.3 | % | 22.8 | % | 21.7 | % | 18.3 | % | 21.2 | % | ||||||||||||||||||
Pre-tax operating margin (4) | 22.1 | % | 17.2 | % | 17.9 | % | 23.8 | % | 20.5 | % | ||||||||||||||||||
Net Revenues
Net revenues were a record $1.1 billion for the fourth quarter of 2020, a 12.2% increase from the fourth quarter of 2019 and a 20.0% increase from the third quarter of 2020. Net revenues, compared with the fourth quarter of 2019, reflected higher brokerage revenues, an increase in capital raising and advisory fee revenues and asset management and service fees, partially offset by a decline in net interest income. Net revenues, compared with the third quarter of 2020, reflected increased capital raising and advisory fee revenues, growth in brokerage revenues and asset management and services fees, as well as higher net interest income.
Brokerage Revenues
Brokerage revenues, defined as commissions and principal transactions, were $342.6 million, an 18.3% increase compared with the fourth quarter of 2019 and a 9.3% increase compared with the third quarter of 2020.
($ in 000s) | Three Months Ended | |||||||||||||||||||
12/31/20 | 12/31/19 | % Change | 9/30/20 | % Change | ||||||||||||||||
Global Wealth Management | $ | 185,719 | $ | 174,000 | 6.7 | $ | 162,627 | 14.2 | ||||||||||||
Institutional brokerage: | ||||||||||||||||||||
Equity capital markets | 69,201 | 45,989 | 50.5 | 54,204 | 27.7 | |||||||||||||||
Fixed income capital markets | 87,664 | 69,563 | 26.0 | 96,706 | (9.3) | |||||||||||||||
Total institutional brokerage | 156,865 | 115,552 | 35.8 | 150,910 | 3.9 | |||||||||||||||
Total brokerage revenues | $ | 342,584 | $ | 289,552 | 18.3 | $ | 313,537 | 9.3 |
- Global Wealth Management brokerage revenues were $185.7 million, a 6.7% increase compared with the fourth quarter of 2019 and a 14.2% increase compared with the third quarter of 2020.
- Institutional equity brokerage revenues were $69.2 million, a 50.5% increase compared with the fourth quarter of 2019 and a 27.7% increase compared with the third quarter of 2020.
- Institutional fixed income brokerage revenues were $87.7 million, a 26.0% increase compared with the fourth quarter of 2019 and a 9.3% decrease compared with the third quarter of 2020.
2
Investment Banking Revenues
Investment banking revenues were a record $337.7 million, a 21.8% increase compared with the fourth quarter of 2019 and a 54.8% increase compared with the third quarter of 2020.
($ in 000s) | Three Months Ended | |||||||||||||||
12/31/20 | 12/31/19 | % Change | 9/30/20 | % Change | ||||||||||||
Capital raising: | ||||||||||||||||
Global Wealth Management | $ | 9,562 | $ | 9,278 | 3.1 | $ | 8,113 | 17.9 | ||||||||
Equity capital markets | 104,097 | 64,384 | 61.7 | 78,462 | 32.7 | |||||||||||
Fixed income capital markets | 50,613 | 48,181 | 5.0 | 50,717 | (0.2 | ) | ||||||||||
Institutional Group | 154,710 | 112,565 | 37.4 | 129,179 | 19.8 | |||||||||||
Total capital raising (6) | 164,272 | 121,843 | 34.8 | 137,292 | 19.7 | |||||||||||
Advisory fees | 173,395 | 155,331 | 11.6 | 80,842 | 114.5 | |||||||||||
Total investment banking (6) | $ | 337,667 | $ | 277,174 | 21.8 | $ | 218,134 | 54.8 |
- Global Wealth Management capital raising revenues were $9.6 million, a 3.1% increase compared with the fourth quarter of 2019 and a 17.9% increase compared with the third quarter of 2020.
- Institutional equity capital raising revenues were $104.1 million, a 61.7% increase compared with the fourth quarter of 2019 and a 32.7% increase compared with the third quarter of 2020.
- Institutional fixed income capital raising revenues were $50.6 million, a 5.0% increase compared with the fourth quarter of 2019 and a 0.2% decrease compared with the third quarter of 2020.
- Advisory fee revenues were $173.4 million, an 11.6% increase compared with the fourth quarter of 2019 and a 114.5% increase compared with the third quarter of 2020.
Asset Management and Service Fee Revenues
Asset management and service fee revenues were a record $249.9 million, an 11.6% increase compared with the fourth quarter of 2019 and an 8.3% increase compared with the third quarter of 2020. The increase from the comparative period in 2019 is primarily attributable to higher asset values and strong fee-based asset flows. Please refer to the Asset Management and Service Fee Breakdown table for additional details.
Net Interest Income
Net interest income of $105.4 million, a 22.3% decrease compared with the fourth quarter of 2019 and a 4.7% increase compared with the third quarter of 2020. The decrease from the fourth quarter of 2019 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 $119.9 million, a 28.3% decrease compared with the fourth quarter of 2019 and a 4.8% increase compared with the third quarter of 2020.
- Interest expense was $14.5 million, a 53.8% decrease compared with the fourth quarter of 2019 and a 5.0% increase compared with the third quarter of 2020.
3
Annual Review
Annual Highlights
- Record net revenues of $3.8 billion, increased 12.4% compared with 2019.
- Record net revenues in Global Wealth Management.
- Record net revenues and pre-tax operating income in Institutional Group.
- Record net income available to common shareholders of $476.2 million, or $4.16 per diluted common share.(1)
- Record non-GAAP net income available to common shareholders of $522.8 million, or $4.56 per diluted common share.(1)
For year ended December 31, 2020, the Company reported record net income available to common shareholders of $476.2 million, or $4.16 per diluted common share(1) on record net revenues of $3.8 billion, compared with net income available to common shareholders of $431.1 million, or $3.66 per diluted common share,(1) on net revenues of $3.3 billion for the comparable in 2019.
For the year ended December 31, 2020, the Company reported non-GAAP net income available to common shareholders of $522.8 million, or $4.56 per diluted common share.(1) The Company's reported GAAP net income for the year ended December 31, 2020 was primarily impacted by merger-related expenses. Details are discussed below and in the "Non-GAAP Financial Matters" section.
Financial Highlights (Unaudited) | Year Ended | |||||||||||||||||||||||
Non- | Non- | |||||||||||||||||||||||
GAAP | GAAP | % | GAAP (3) | GAAP (3) | % | |||||||||||||||||||
($ in 000s, except per share data) | 12/31/20 | 12/31/19 | Change | 12/31/20 | 12/31/19 | Change | ||||||||||||||||||
Net revenues | $ | 3,752,061 | $ | 3,337,030 | 12.4 | $ | 3,752,213 | $ | 3,337,204 | 12.4 | ||||||||||||||
Net income applicable to Stifel Financial Corp. | $ | 503,472 | $ | 448,396 | 12.3 | $ | 550,108 | $ | 496,955 | 10.7 | ||||||||||||||
Preferred dividends | 27,261 | 17,319 | 57.4 | 27,261 | 17,319 | 57.4 | ||||||||||||||||||
Net income available to common shareholders | $ | 476,211 | $ | 431,077 | 10.5 | $ | 522,847 | $ | 479,636 | 9.0 | ||||||||||||||
Earnings per diluted common share (1) | $ | 4.39 | $ | 3.80 | 15.5 | $ | 4.80 | $ | 4.22 | 13.7 | ||||||||||||||
Earnings per diluted common share available to common | ||||||||||||||||||||||||
shareholders (1) | $ | 4.16 | $ | 3.66 | 13.7 | $ | 4.56 | $ | 4.07 | 12.0 | ||||||||||||||
Compensation ratio | 60.7 | % | 59.3 | % | 59.9 | % | 58.3 | % | ||||||||||||||||
Non-compensation ratio | 21.9% | 22.7% | 21.1% | 21.8% | ||||||||||||||||||||
Pre-tax operating margin (5) | 17.4 | % | 18.0 | % | 19.0 | % | 19.9 | % | ||||||||||||||||
Net Revenues
Net revenues were a record $3.8 billion for the year ended December 31, 2020, a 12.4% increase compared with 2019. Net revenues, compared with 2019, reflected significantly higher brokerage revenues, increased capital raising revenues, and asset management and service fees, partially offset by lower net interest income and advisory fee revenues.
Brokerage Revenues
Brokerage revenues were $1.3 billion, a 25.8% increase compared with 2019.
($ in 000s) | Year Ended | |||||||||||
12/31/20 | 12/31/19 | % Change | ||||||||||
Global Wealth Management | $ | 687,348 | $ | 649,699 | 5.8 | |||||||
Institutional brokerage: | ||||||||||||
Equity capital markets | 256,793 | 166,577 | 54.2 | |||||||||
Fixed income capital markets | 404,789 | 255,969 | 58.1 | |||||||||
Total institutional brokerage | 661,582 | 422,546 | 56.6 | |||||||||
Total brokerage revenues | $ | 1,348,930 | $ | 1,072,245 | 25.8 |
- Global Wealth Management brokerage revenues were $687.3 million, a 5.8% increase compared with 2019.
- Institutional equity brokerage revenues were $256.8 million, a 54.2% increase compared with 2019.
- Institutional fixed income brokerage revenues were $404.8 million, a 58.1% increase compared with 2019.
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Stifel Financial Corporation published this content on 29 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2021 12:13:06 UTC.