Attached files
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| EX-99.3 - EX-99.3 - STIFEL FINANCIAL CORP | d207516dex993.htm |
| EX-99.2 - EX-99.2 - STIFEL FINANCIAL CORP | d207516dex992.htm |
| 8-K - 8-K - STIFEL FINANCIAL CORP | d207516d8k.htm |
Exhibit 99.1
ST. LOUIS, MO, July 28, 2021 – Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $189.8 million, or $1.60 per diluted common share on net revenues of $1.2 billion for the three months ended June 30, 2021, compared with net income available to common shareholders of $103.0 million, or $0.92 per diluted common share (1) on net revenues of $895.8 million for the second quarter of 2020. For the three months ended June 30, 2021, the Company reported non-GAAP net income available to common shareholders of $202.1 million, or $1.70 per diluted common share. The Company’s reported GAAP net income for the three months ended June 30, 2021 was primarily impacted by merger-related expenses.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said “Our results in the first half of 2021 are impressive. We generated consecutive quarters of record net revenue and our improved operating scale drove record non-GAAP earnings for both the quarter and the first half of the year. With both of the firm’s operating segments driving our performance, I am optimistic that these results can be sustained, as illustrated by our increased guidance for the remainder of the year.”
Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271-3610 | www.stifel.com/investor-relations
Global Wealth Management
Global Wealth Management reported record net revenues of $637.6 million for the three months ended June 30, 2021 compared with $505.8 million during the second quarter of 2020. Pre-tax net income was $227.3 million compared with $156.3 million in the second quarter of 2020.
Stifel Financial Corp. | Page 2
Institutional Group
Institutional Group reported record net revenues of $520.8 million for the three months ended June 30, 2021 compared with $398.1 million during the second quarter of 2020. Pre-tax net income was $141.5 million compared with $83.0 million in the second quarter of 2020.
Stifel Financial Corp. | Page 3
Other Segment
Stifel Financial Corp. | Page 4
Conference Call Information
Stifel Financial Corp. will host its second quarter 2021 financial results conference call on Wednesday, July 28, 2021, at 9:30 a.m. Eastern Time. The conference call may include forward-looking statements.
All interested parties are invited to listen to Stifel’s Chairman and CEO, Ronald J. Kruszewski, by dialing (877) 876-9938 and referencing conference ID 4838637. A live audio webcast of the call, as well as a presentation highlighting the Company’s results, will be available through the Company’s web site, www.stifel.com. For those who cannot listen to the live broadcast, a replay of the broadcast will be available through the above-referenced web site beginning approximately one hour following the completion of the call.
Company Information
Stifel Financial Corp. (NYSE: SF) is a financial services holding company headquartered in St. Louis, Missouri, that conducts its banking, securities, and financial services business through several wholly owned subsidiaries. Stifel’s broker-dealer clients are served in the United States through Stifel, Nicolaus & Company, Incorporated, including its Eaton Partners business division; Keefe, Bruyette & Woods, Inc.; Miller Buckfire & Co., LLC; and Stifel Independent Advisors, LLC. The Company’s broker-dealer affiliates provide securities brokerage, investment banking, trading, investment advisory, and related financial services to individual investors, professional money managers, businesses, and municipalities. Stifel Bank and Stifel Bank & Trust offer a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. and Stifel Trust Company Delaware, N.A. offer trust and related services. To learn more about Stifel, please visit the Company’s website at www.stifel.com. For global disclosures, please visit www.stifel.com/investor-relations/press-releases.
A financial summary follows. Financial, statistical and business-related information, as well as information regarding business and segment trends, is included in the financial supplement. Both the earnings release and the financial supplement are available online in the Investor Relations section at www.stifel.com/investor-relations.
The information provided herein and in the financial supplement, including information provided on the Company’s earnings conference calls, may include certain non-GAAP financial measures. The definition of such measures or reconciliation of such measures to the comparable U.S. GAAP figures are included in this earnings release and the financial supplement, both of which are available online in the Investor Relations section at www.stifel.com/investor-relations.
Cautionary Note Regarding Forward-Looking Statements
This earnings release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this earnings release not dealing with historical results are forward-looking and are based on various assumptions. The forward-looking statements in this earnings release are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among other things, the following possibilities: the ability to successfully integrate acquired companies or the branch offices and financial advisors; a material adverse change in financial condition; the risk of borrower, depositor, and other customer attrition; a change in general business and economic conditions; changes in the interest rate environment, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the companies’ operations, pricing, and services; and other risk factors referred to from time to time in filings made by Stifel Financial Corp. with the Securities and Exchange Commission. For information about the risks and important factors that could affect the Company’s future results, financial condition and liquidity, see “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Forward-looking statements speak only as to the date they are made. The Company disclaims any intent or obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
Statements about the effects of the COVID-19 pandemic on the Company’s business, results, financial position and liquidity may constitute forward-looking statements and are subject to the risk that the actual impact may differ, possibly materially, from what is currently expected.
Stifel Financial Corp. | Page 5
Summary Results of Operations (Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
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| ($ in 000s, except per share amounts) |
6/30/21 | 6/30/20 | % Change | 3/31/21 | % Change | 6/30/21 | 6/30/20 | % Change | ||||||||||||||||||||||||
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| Revenues: |
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| Commissions |
$ | 195,579 | $ | 177,028 | 10.5 | $ | 213,614 | (8.4 | ) | $ | 409,193 | $ | 388,126 | 5.4 | ||||||||||||||||||
| Principal transactions |
152,597 | 166,017 | (8.1 | ) | 165,006 | (7.5 | ) | 317,603 | 304,683 | 4.2 | ||||||||||||||||||||||
| Investment banking |
376,443 | 217,035 | 73.4 | 339,288 | 11.0 | 715,731 | 396,503 | 80.5 | ||||||||||||||||||||||||
| Asset management and service fees |
295,869 | 198,939 | 48.7 | 278,147 | 6.4 | 574,016 | 436,714 | 31.4 | ||||||||||||||||||||||||
| Other income |
13,235 | 21,514 | (38.5 | ) | 25,634 | (48.4 | ) | 38,869 | 30,721 | 26.5 | ||||||||||||||||||||||
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| Operating revenues |
1,033,723 | 780,533 | 32.4 | 1,021,689 | 1.2 | 2,055,412 | 1,556,747 | 32.0 | ||||||||||||||||||||||||
| Interest revenue |
133,591 | 128,368 | 4.1 | 127,540 | 4.7 | 261,131 | 289,545 | (9.8 | ) | |||||||||||||||||||||||
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| Total revenues |
1,167,314 | 908,901 | 28.4 | 1,149,229 | 1.6 | 2,316,543 | 1,846,292 | 25.5 | ||||||||||||||||||||||||
| Interest expense |
14,178 | 13,084 | 8.4 | 14,440 | (1.8 | ) | 28,618 | 37,441 | (23.6 | ) | ||||||||||||||||||||||
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| Net revenues |
1,153,136 | 895,817 | 28.7 | 1,134,789 | 1.6 | 2,287,925 | 1,808,851 | 26.5 | ||||||||||||||||||||||||
| Non-interest expenses: |
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| Compensation and benefits |
692,054 | 547,174 | 26.5 | 697,914 | (0.8 | ) | 1,389,968 | 1,124,353 | 23.6 | |||||||||||||||||||||||
| Non-compensation operating expenses |
197,057 | 205,683 | (4.2 | ) | 208,983 | (5.7 | ) | 406,040 | 426,432 | (4.8 | ) | |||||||||||||||||||||
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| Total non-interest expenses |
889,111 | 752,857 | 18.1 | 906,897 | (2.0 | ) | 1,796,008 | 1,550,785 | 15.8 | |||||||||||||||||||||||
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| Income before income taxes |
264,025 | 142,960 | 84.7 | 227,892 | 15.9 | 491,917 | 258,066 | 90.6 | ||||||||||||||||||||||||
| Provision for income taxes |
65,948 | 35,073 | 88.0 | 54,877 | 20.2 | 120,825 | 63,590 | 90.0 | ||||||||||||||||||||||||
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| Net income |
198,077 | 107,887 | 83.6 | 173,015 | 14.5 | 371,092 | 194,476 | 90.8 | ||||||||||||||||||||||||
| Preferred dividends |
8,289 | 4,843 | 71.2 | 8,289 | — | 16,578 | 9,687 | 71.1 | ||||||||||||||||||||||||
| Net income available to common shareholders |
$ | 189,788 | $ | 103,044 | 84.2 | $ | 164,726 | 15.2 | $ | 354,514 | $ | 184,789 | 91.8 | |||||||||||||||||||
| Earnings per common share: (1) |
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| Basic |
$ | 1.76 | $ | 0.97 | 81.4 | $ | 1.53 | 15.0 | $ | 3.29 | $ | 1.74 | 89.1 | |||||||||||||||||||
| Diluted |
$ | 1.60 | $ | 0.92 | 73.9 | $ | 1.40 | 14.3 | $ | 3.00 | $ | 1.63 | 84.0 | |||||||||||||||||||
| Cash dividends declared per common share (1) |
$ | 0.15 | $ | 0.11 | 36.4 | $ | 0.15 | — | $ | 0.30 | $ | 0.22 | 36.4 | |||||||||||||||||||
| Weighted average number of common shares outstanding: (1) |
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| Basic |
107,837 | 105,791 | 1.9 | 107,746 | 0.1 | 107,795 | 106,358 | 1.4 | ||||||||||||||||||||||||
| Diluted |
118,602 | 111,581 | 6.3 | 117,875 | 0.6 | 118,279 | 113,477 | 4.2 | ||||||||||||||||||||||||
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Stifel Financial Corp. | Page 6
Non-GAAP Financial Measures
The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the three months ended June 30, 2021, June 30, 2020, and March 31, 2021. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company’s core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company’s results in the current period to those in prior and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of on-going business.
A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of the Company’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company’s financial performance should be considered together.
The following tables provide details with respect to reconciling net income and earnings per diluted common share on a GAAP basis for the three and six months ended June 30, 2021 and 2020, and the three months ended March 31, 2021 to net income and earnings per diluted common share on a non-GAAP basis for the same period.
| Three Months Ended | Six Months Ended | |||||||||||||||
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| ($ in 000s, except per share amounts) | 6/30/21 | 6/30/20 | 6/30/21 | 6/30/20 | ||||||||||||
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| GAAP net income |
$ | 198,077 | $ | 107,887 | $ | 371,092 | $ | 194,476 | ||||||||
| Preferred dividend |
8,289 | 4,843 | 16,578 | 9,687 | ||||||||||||
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| Net income available to common shareholders |
189,788 | 103,044 | 354,514 | 184,789 | ||||||||||||
| Non-GAAP adjustments: |
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| Merger-related (10) |
16,368 | 16,259 | 31,797 | 29,769 | ||||||||||||
| Provision for income taxes (11) |
(4,089 | ) | (3,968 | ) | (7,819 | ) | (7,290 | ) | ||||||||
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| Total non-GAAP adjustments |
12,279 | 12,291 | 23,978 | 22,479 | ||||||||||||
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| Non-GAAP net income available to common shareholders |
$ | 202,067 | $ | 115,335 | $ | 378,492 | $ | 207,268 | ||||||||
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| Weighted average diluted shares outstanding (1) |
118,602 | 111,581 | 118,279 | 113,477 | ||||||||||||
| GAAP earnings per diluted common share (1) |
$ | 1.67 | $ | 0.97 | $ | 3.14 | $ | 1.71 | ||||||||
| Non-GAAP adjustments (1) |
0.10 | 0.11 | 0.20 | 0.20 | ||||||||||||
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| Non-GAAP earnings per diluted common share (1) |
$ | 1.77 | $ | 1.08 | $ | 3.34 | $ | 1.91 | ||||||||
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| GAAP earnings per diluted common share available to common shareholders (1) |
$ | 1.60 | $ | 0.92 | $ | 3.00 | $ | 1.63 | ||||||||
| Non-GAAP adjustments (1) |
0.10 | 0.11 | 0.20 | 0.20 | ||||||||||||
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| Non-GAAP earnings per diluted common share available to common shareholders (1) |
$ | 1.70 | $ | 1.03 | $ | 3.20 | $ | 1.83 | ||||||||
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Stifel Financial Corp. | Page 7
GAAP to Non-GAAP Reconciliation
| Three Months Ended | Six Months Ended | |||||||||||||||
| ($ in 000s) | 6/30/21 | 6/30/20 | 6/30/21 | 6/30/20 | ||||||||||||
| GAAP compensation and benefits |
$ | 692,054 | $ | 547,174 | $ | 1,389,968 | $ | 1,124,353 | ||||||||
| As a percentage of net revenues |
60.0 | % | 61.1 | % | 60.8 | % | 62.2 | % | ||||||||
| Non-GAAP adjustments: |
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| Merger-related(10) |
(6,119 | ) | (9,710 | ) | (12,293 | ) | (16,137 | ) | ||||||||
| Non-GAAP compensation and benefits |
$ | 685,935 | $ | 537,464 | $ | 1,377,675 | $ | 1,108,216 | ||||||||
| As a percentage of non-GAAP net revenues |
59.5 | % | 60.0 | % | 60.2 | % | 61.3 | % | ||||||||
| GAAP non-compensation expenses |
$ | 197,057 | $ | 205,683 | $ | 406,040 | $ | 426,432 | ||||||||
| As a percentage of net revenues |
17.1 | % | 22.9 | % | 17.7 | % | 23.5 | % | ||||||||
| Non-GAAP adjustments: |
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| Merger-related(10) |
(10,287 | ) | (6,549 | ) | (19,351 | ) | (13,453 | ) | ||||||||
| Non-GAAP non-compensation expenses |
$ | 186,770 | $ | 199,134 | $ | 386,689 | $ | 412,979 | ||||||||
| As a percentage of non-GAAP net revenues |
16.2 | % | 22.2 | % | 16.9 | % | 22.8 | % | ||||||||
| Total merger-related expenses |
$ | 16,368 | $ | 16,259 | $ | 31,797 | $ | 29,769 | ||||||||
Stifel Financial Corp. | Page 8
Footnotes
| (1) | All share and per share information has been retroactively adjusted to reflect the December 2020 three-for-two stock split. |
| (2) | Represents available to common shareholders. |
| (3) | Reconciliations of the Company’s GAAP results to these non-GAAP measures are discussed within and under “Non-GAAP Financial Measures.” |
| (4) | Non-GAAP pre-tax margin for the three months ended June 30, 2021 of 24.3% is calculated by adding non-GAAP adjustments of $16.4 million to our GAAP income before income taxes of $264.0 million and dividing it by non-GAAP net revenues for the quarter of $1.2 billion. Non-GAAP pre-tax margin for the six months ended June 30, 2021 of 22.9% is calculated by adding non-GAAP adjustments of $31.8 million to our GAAP income before income taxes of $491.9 million and dividing it by non-GAAP net revenues for the period of $2.3 billion. Reconciliations of the Company’s GAAP results to certain non-GAAP measures is discussed within and under “Non-GAAP Financial Measures.” |
| (5) | Annualized return on average common shareholders’ equity (“ROCE”) is calculated by dividing annualized net income applicable to common shareholders by average common shareholders’ equity or, in the case of non-GAAP ROE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders’ equity. |
| (6) | Annualized return on average tangible common shareholders’ equity (“ROTCE”) is calculated by dividing annualized net income applicable to common shareholders by average tangible shareholders’ equity or, in the case of non-GAAP ROTE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible shareholders’ equity. Tangible common shareholders’ equity equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. Average deferred taxes on goodwill and intangible assets was $53.1 million, $48.5 million, and $51.7 million, as of June 30, 2021 and 2020, and March 31, 2021, respectively. |
| (7) | Includes loans held for sale. |
| (8) | Tangible book value per common share represents shareholders’ equity (excluding preferred stock) divided by period end common shares outstanding. Tangible common shareholders’ equity equals total common shareholders’ equity less goodwill and identifiable intangible assets and the deferred taxes on goodwill and intangible assets. |
| (9) | Capital ratios are estimates at time of the Company’s earnings release. |
| (10) | Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards and promissory notes issued as retention, and amortization of intangible assets acquired. These costs were directly related to acquisitions of certain businesses and are not representative of the costs of running the Company’s on-going business. |
| (11) | Primarily represents the Company’s effective tax rate for the period applied to the non-GAAP adjustments. |
Stifel Financial Corp. | Page 9