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Stifel Reports Third Quarter 2020 Results

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  • Net revenues of $883.3 million, increased 7.5% with the year-ago quarter.
  • Net income available to common shareholders of $110.6 million, or $1.46 per diluted common share.
  • Non-GAAP net income available to common shareholders of $120.5 million, or $1.59 per diluted common share.
  • Annualized return on average tangible common shareholders’ equity (1) was 20.4%.
  • Non-GAAP annualized return on average tangible common shareholders’ equity (1) was 22.2%.

ST. LOUIS, Oct. 27, 2020 (GLOBE NEWSWIRE) -- Stifel Financial Corp. (NYSE: SF) today reported net income available to common shareholders of $110.6 million, or $1.46 per diluted common share on net revenues of $883.3 million for the three months ended September 30, 2020, compared with net income available to common shareholders of $104.6 million, or $1.34 per diluted common share, on net revenues of $821.6 million for the third quarter of 2019.

For the three months ended September 30, 2020, the Company reported non-GAAP net income available to common shareholders of $120.5 million, or $1.59 per diluted common share. The Company’s reported GAAP net income for the three months ended September 30, 2020 was primarily impacted by merger-related expenses. Details discussed below and in the “Non-GAAP Financial Matters” section.

Chairman’s Comments

“The financial performance during the quarter, and over the past few years, has been driven by a diverse business mix that’s enabled both our Institutional Group and Wealth Management segments to generate strong growth. This diversification is illustrated by record nine month Wealth Management revenues despite significant declines in net interest income and deposit sweep fees, both a result of the Federal Reserve’s implementation of a zero rate environment. Likewise, we achieved record nine-month Institutional Group revenues as record capital raising and brokerage revenues more than compensated for the 13% decline in advisory revenue,” stated Ronald J. Kruszewski, Chairman and Chief Executive Officer of Stifel.

Mr. Kruszewski continued, “Simply, Stifel is a growth company with diversified, balanced, and synergistic businesses. Over the last 12 months, Wealth Management, under both brokerage and fee-based models, has contributed 46% of net revenues. Institutional revenues, comprised of equity and fixed income, investment banking and trading, made up 41% of net revenues, while net interest income accounted for the remaining 13%. The complementary nature of these businesses is reflected in our return on tangible common equity, which is 23% over the past 12 months.”

Financial Highlights (Unaudited) Three Months Ended 
($ in 000s, except per share data) GAAP
9/30/20		  GAAP
9/30/19		  %
Change		  GAAP
6/30/20		  %
Change		   Non-GAAP (2)
9/30/20		  Non-GAAP (2)
 9/30/19		  %
Change		 
Net revenues $883,300  $821,572   7.5  $895,817   (1.4)  $883,300  $821,572   7.5 
Net income applicable to Stifel Financial Corp. $120,527  $109,414   10.2  $107,887   11.7   $130,422  $121,990   6.9 
Preferred dividends  9,897   4,844   104.3   4,843   104.4    9,897   4,844   104.3 
Net income available to common shareholders $110,630  $104,570   5.8  $103,044   7.4   $120,525  $117,146   2.9 
Earnings per diluted common share $1.59  $1.40   13.6  $1.45   9.7   $1.72  $1.56   10.3 
Earnings per diluted common share available to common shareholders $1.46  $1.34   9.0  $1.39   5.0   $1.59  $1.50   6.0 
Compensation ratio  60.4%  59.2%      61.1%       59.6%  58.1%    
Non-compensation ratio  21.7%  22.5%      22.9%       21.0%  21.7%    
Pre-tax operating margin (3)  17.9%  18.3%      16.0%       19.4%  20.2%    

For the nine months ended September 30, 2020, the Company reported net income available to common shareholders of $295.4 million, or $3.90 per diluted common share on record net revenues of $2.7 billion, compared with net income available to common shareholders of $305.2 million, or $3.87 per diluted common share, on net revenues of $2.4 billion for the nine months ended September 30, 2019.

For the nine months ended September 30, 2020, the Company reported non-GAAP net income available to common shareholders of $327.8 million, or $4.33 per diluted common share.

Financial Highlights (Unaudited) Nine Months Ended 
($ in 000s, except per share data) GAAP
9/30/20		  GAAP
9/30/19		  %
Change		   Non-GAAP (2)
9/30/20		  Non-GAAP (2)
9/30/19
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About SF

established in 1890, stifel, nicolaus & company, incorporated is one of the nation’s premier full-service financial services firms, providing brokerage, trading, investment banking, investment advisory, and related services to individual investors, professional money managers, businesses, and municipalities through more than 350 locations in 45 states and the district of columbia. stifel ranks as the 6th largest brokerage firm in the country as measured by number of financial advisors, with approximately 2,100, and features a highly regarded equity research department that has earned numerous accolades from such publications as the wall street journal, forbes, and the financial times. stifel is the principal subsidiary of stifel financial corp. (nyse: sf), a financial services holding company headquartered in st. louis, missouri. some of stifel financial’s other subsidiaries include century securities associates, inc., an independent contractor broker-dealer firm; stifel nicolaus lim