Stifel Reports Record Fourth Quarter and Full-Year Results

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Stifel Financial Corp. (NYSE: SF) achieved record net revenues of $3.8 billion for the year, marking a 12.4% increase over 2019, alongside quarterly net revenues of $1.1 billion, up 20.0% from Q3 2020. The company recorded net income of $180.8 million or $1.55 per diluted share, a 43.7% increase year-over-year. Non-GAAP earnings per share hit $1.67, further demonstrating financial strength. Stifel also announced a 32% increase in dividends to $0.15 per share, reflecting strong performance in brokerage and capital raising despite a decline in net interest income.

Positive

Record annual net revenues of $3.8 billion, a 12.4% increase over 2019.
Quarterly net revenues of $1.1 billion, a 20.0% increase from Q3 2020.
Record net income of $180.8 million, or $1.55 per diluted share, a 43.7% year-over-year increase.
Non-GAAP net income available to shareholders of $195.1 million, or $1.67 per diluted share.
Increased quarterly dividend by approximately 32% to $0.15 per common share.
Annualized return on tangible common equity at 30.8% for 2020.

Negative

Decline in net interest income compared to previous periods.

01/29/2021 - 07:00 AM

25^th 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-GAAP annualized 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, Jan. 29, 2021 (GLOBE NEWSWIRE) -- 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 25^th 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.”

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
($ in 000s, except per share data)	GAAP 12/31/20			GAAP 12/31/19			% Change		GAAP 9/30/20			% Change			Non- GAAP ⁽³⁾ 12/31/20			Non- GAAP ⁽³⁾ 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.

Three Months Ended

($ in 000s)

12/31/20

12/31/19

% Change

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