Siebert Reports Second Quarter 2022 Financial Results

Rhea-AI Summary

Siebert Financial Corp. (NASDAQ: SIEB) reported its Q2 2022 results, showing a revenue decline to $11.7 million from $16.8 million in Q2 2021. The company posted an operating loss of $0.5 million compared to operating income of $1.9 million in the prior year. Net income dropped to $0.7 million, with earnings per share at $0.02, down from $0.05. Retail customer net worth declined to $13.8 billion. Despite these challenges, management remains confident in the growth strategy and ongoing modernization of offerings.

Positive

• Securities Finance division achieved record revenue growth of 85% year-over-year in Q2.
• Management anticipates benefits from the rising interest rate environment in the second half of the year.

Negative

• Q2 2022 revenue decreased by 30.6% compared to Q2 2021.
• Operating loss of $0.5 million indicates a decline in profitability.
• Net income and earnings per share decreased from the previous year.

NEW YORK--(BUSINESS WIRE)-- Siebert Financial Corp. (NASDAQ: SIEB) (“Siebert”), a mission-driven provider of financial services, today reported financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Financial Highlights

• Revenue of $11.7 million compared to $16.8 million in the second quarter of 2021
• Operating loss* of $0.5 million compared to operating income of $1.9 million in the second quarter of 2021
• Net income available to common stockholders of $0.7 million compared to net income available to common stockholders of $1.4 million in the second quarter of 2021
• Earnings per share of $0.02 compared to $0.05 in the second quarter of 2021
• Retail customer net worth of $13.8 billion compared to $16.8 billion at the end of 2021

Management Commentary

“Throughout the first half of 2022, we’ve adapted to changing business and economic conditions that have impacted the capital markets and our clients,” said Gloria E. Gebbia, controlling shareholder and board member of Siebert. “The diversity of our business resulted in improved financial results relative to last quarter as clients turned to us for our expertise and guidance in this volatile environment. We remain focused on our growth strategy and the investments we’ve made to modernize our offerings and meet client demand. As we enter the second half of the year, we remain confident in our ability to navigate this environment and are well-positioned to capitalize on the evolving needs of our clients as a mission-driven company. We look forward to launching our correspondent clearing services which will further diversify our business. We are embracing this challenging environment to work closely with our clients while remaining focused on our long-term growth opportunities.”

Andrew Reich, CFO of Siebert, commented: “We delivered solid results this quarter despite continued pressure from challenging market conditions. Strong performance in our securities finance and advisory businesses helped partially counter weaker revenues related to commissions and fees, principal transactions, and market making relative to the prior year period. Our Securities Finance division achieved another record quarter delivering year-over-year revenue growth of 85% in the second quarter and 89% year-to-date relative to the first half of 2021. The improvement in our operating loss this quarter included a temporary unrealized loss of $0.6 million on our U.S. government securities portfolio compared to $2.2 million in the first quarter of 2022. Looking ahead, we remain focused on sustained revenue growth and disciplined expense management while adjusting to changing market conditions. This quarter we started to benefit from the rising interest rate environment and expect that trend to continue in the second half of the year.” **

*Operating income and operating loss represents the line item captioned “Income (loss) before provision for (benefit from) income taxes” in the statements of operations in Siebert’s 2022 Q2 10-Q.

**Refer to Siebert’s 2022 Q2 10-Q, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Notice to Investors

This communication is provided for informational purposes only and is neither an offer to sell nor a solicitation of an offer to buy any securities in the United States or elsewhere.

About Siebert Financial Corp.

Siebert is a diversified financial services company that has been in business and a member of the NYSE since 1967 when Muriel Siebert became the first woman to own a seat on the NYSE and the first to head one of its member firms.

Siebert operates through its subsidiaries Muriel Siebert & Co., Inc., Siebert AdvisorNXT, Inc., Park Wilshire Companies, Inc., Rise Financial Services, LLC, Siebert Technologies, LLC and StockCross Digital Solutions, Ltd. Through these entities, Siebert provides a full range of brokerage and financial advisory services including securities brokerage, investment advisory and insurance offerings, prime brokerage, capital intro, and corporate stock plan administration solutions. For over 50 years, Siebert has been a mission-driven company that values its clients, shareholders, and employees. More information is available at www.siebert.com.

Cautionary Note Regarding Forward-Looking Statements

The statements contained in this press release, that are not historical facts, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements, which reflect our management’s beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.

We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005624/en/

Investor Relations:

Alex Kovtun and Matt Glover

Gateway Group, Inc.

949-574-3860

sieb@gatewayir.com

Source: Siebert Financial Corp.

FAQ

What were the financial results for Siebert Financial Corp. in Q2 2022?

Siebert reported Q2 2022 revenue of $11.7 million, an operating loss of $0.5 million, and a net income of $0.7 million.

How did Siebert Financial Corp.'s revenue in Q2 2022 compare to the previous year?

Revenue in Q2 2022 was $11.7 million, down from $16.8 million in Q2 2021.

What is the outlook for Siebert Financial Corp. following the Q2 2022 results?

Management is optimistic about capitalizing on client needs and expects benefits from a rising interest rate environment in the second half of 2022.