Stifel Financial : Reports Record Fourth Quarter and Full Year Results - Form 8-K
SF
Stifel Reports Record Fourth Quarter and Full Year Results
ST. LOUIS, MO, January 26, 2022 - Stifel Financial Corp. (NYSE: SF) today reported record net revenues of $1.3 billion for the three months ended December 31, 2021, compared with $1.1 billion a year ago. Net income available to common shareholders was $252.1 million, or $2.12 per diluted common share, compared with $180.8 million, or $1.55 per diluted common share for the fourth quarter of 2020. Non-GAAP net income available to common shareholders of $265.4 million, or $2.23 per diluted common share for the fourth quarter of 2021.
Record net revenues of $4.7 billion for the year ended December 31, 2021 compared to $3.8 billion a year ago. Net income available to common shareholders of $789.3 million, or $6.66 per diluted common share, compared with $476.2 million, or $4.16 per diluted common share in 2020. Non-GAAP net income available to common shareholders of $839.5 million, or $7.08 per diluted common share in 2021.
Ronald J. Kruszewski, Chairman and Chief Executive Officer, said "2021 was an outstanding year for our firm as we delivered our 26th consecutive year of record net revenue, our fifth straight year of record earnings per share, and we generated a non-GAAP return on tangible common equity of 31% for the year. Each of our operating segments posted record results as the growth of our product offering has made us increasingly relevant to both wealth management and institutional clients. As I look forward, the outlook for Stifel remains as strong as I've seen in my 25 year tenure as CEO."
Full Year Highlights
Fourth Quarter Highlights
Other Highlights
GAAP Financial Highlights:
Net revenues
Net income (1)
Diluted EPS (1)
Comp. ratio
Non-comp. ratio
Pre-tax margin
Non-GAAP Financial Highlights:
Net revenues
Net income (1) (2)
Diluted EPS (1) (2)
Comp. ratio (2)
Non-comp. ratio (2)
Pre-tax margin (3)
ROCE (4)
ROTCE (5)
Global Wealth Management (assets and loans in millions)
Net revenues
Pre-tax net income
Total client assets
Fee-based client assets
Bank loans (6)
Institutional Group
Net revenues
Equity
Fixed Income
Pre-tax net income
Media Contact: Neil Shapiro (212) 271-3447 | Investor Contact: Joel Jeffrey (212) 271- 3610 | www.stifel.com/investor-relations
Global Wealth Management
Fourth Quarter Results
Global Wealth Management reported record net revenues of $674.2 million for the three months ended December 31, 2021 compared with $575.3 million during the fourth quarter of 2020. Pre-tax net income was $232.3 million compared with $196.5 million in the fourth quarter of 2020.
Highlights
Net revenues increased 17% from a year ago:
Total Expenses:
Net revenues
Asset management
Transactional revenues
Net interest income
Investment banking
Other income
Total expenses
Compensation expense
Provision for credit losses
Non-comp. opex
Pre-tax net income
Compensation ratio
Non-compensation ratio
Pre-tax margin
Stifel Financial Corp. | Page 2
Institutional Group
Fourth Quarter Results
Institutional Group reported record net revenues of $633.3 million for the three months ended December 31, 2021 compared with $489.4 million during the fourth quarter of 2020. Pre-tax net income was $175.2 million compared with $123.7 million in the fourth quarter of 2020.
Highlights
Investment banking revenues increased 42% from a year ago:
Equity transactional revenues decreased 5% from a year ago:
Fixed income transactional revenues increased 8% from a year ago:
Total Expenses:
Net revenues
Investment banking
Advisory
Equity capital raising
Fixed income capital raising
Equity transactional
Fixed income transactional
Other
Total expenses
Compensation expense
Non-comp. opex.
Pre-tax net income
Compensation ratio
Non-compensation ratio
Pre-tax margin
Stifel Financial Corp. | Page 3
Global Wealth Management
Full Year Results
Global Wealth Management reported record net revenues of $2.6 billion for the year ended December 31, 2021 compared with $2.2 billion in 2020. Pre-tax net income was $915.0 million compared with $725.9 million in 2020.
Highlights
Net revenues increased 19% from a year ago:
Total Expenses:
Net revenues
Asset management
Transactional revenues
Net interest income
Investment banking
Other income
Total expenses
Compensation expense
Provision for credit losses
Non-comp. opex
Pre-tax net income
Compensation ratio
Non-compensation ratio
Pre-tax margin
Stifel Financial Corp. | Page 4
Institutional Group
Full Year Results
Institutional Group reported record net revenues of $2.2 billion for the year ended December 31, 2021 compared with $1.6 billion in 2020. Pre-tax net income was $558.9 million compared with $325.3 million in 2020.
Highlights
Investment banking revenues increased 66% from a year ago:
Equity transactional revenues decreased 1% from a year ago:
Fixed income transactional revenues decreased 11% from a year ago:
Total Expenses:
Net revenues
Investment banking
Advisory
Equity capital raising
Fixed income capital raising
Equity transactional
Fixed income transactional
Other
Total expenses
Compensation expense
Non-comp. opex.
Pre-tax net income
Compensation ratio
Non-compensation ratio
Pre-tax margin
Stifel Financial Corp. | Page 5
Other Matters
Highlights
Common stock repurchases
Repurchases ($ in 000s)
Number of shares (000s)
Average price
Period end shares (000s)
Effective tax rate
Stifel Financial Corp. Capital (8)
Tier 1 common capital ratio
Tier 1 risk based capital ratio
Tier 1 leverage capital ratio
Tier 1 capital ($MM)
Risk weighted assets ($MM)
Average assets ($MM)
Quarter end assets ($MM)
Agency
Fitch Ratings
S&P Global Ratings
Stifel Financial Corp. | Page 6
Conference Call Information
Stifel Financial Corp. will host its fourth quarter 2021 financial results conference call on Wednesday, January 26, 2022, 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 4799655.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 7
Summary Results of Operations (Unaudited)
Revenues:
Commissions
Principal transactions
Investment banking
Asset management
Other income
Operating revenues
Interest revenue
Total revenues
Interest expense
Net revenues
Non-interest expenses:
Compensation and benefits
Non-compensation operating expenses
Total non-interest expenses
Income before income taxes
Provision for income taxes
Net income
Preferred dividends
Net income available to common shareholders
Earnings per common share:
Basic
Diluted
Cash dividends declared per common share
Weighted average number of common shares outstanding:
Basic
Diluted
Stifel Financial Corp. | Page 8
Non-GAAP Financial Measures (9)
GAAP net income
Preferred dividend
Net income available to common shareholders
Non-GAAP adjustments:
Merger-related (10)
Provision for income taxes (11)
Total non-GAAP adjustments
Non-GAAP net income available to common shareholders
Weighted average diluted shares outstanding
GAAP earnings per diluted common share
Non-GAAP adjustments
Non-GAAP earnings per diluted common share
GAAP earnings per diluted common share available to common shareholders
Non-GAAP adjustments
Non-GAAP earnings per diluted common share available to common shareholders
GAAP to Non-GAAP Reconciliation (9)
GAAP compensation and benefits
As a percentage of net revenues
Non-GAAP adjustments:
Merger-related (10)
Non-GAAP compensation and benefits
As a percentage of non-GAAP net revenues
GAAP non-compensation expenses
As a percentage of net revenues
Non-GAAP adjustments:
Merger-related (10)
Non-GAAPnon-compensation expenses
As a percentage of non-GAAP net revenues
Total merger-related expenses
Stifel Financial Corp. | Page 9
Footnotes
Represents available to common shareholders.
Reconciliations of the Company's GAAP results to these non-GAAP measures are discussed within and under "Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliation."
Non-GAAPpre-tax margin is calculated by adding total merger-related expenses (non-GAAP adjustments) and dividing it by non-GAAP net revenues. See "Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliation."
Return on average common 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 ROCE, calculated by dividing non-GAAP net income applicable to commons shareholders by average common shareholders' equity.
Return on average tangible common equity ("ROTCE"), a non-GAAP financial measure, is calculated by dividing annualized net income applicable to common shareholders by average tangible common equity or, in the case of non-GAAP ROTCE, calculated by dividing non-GAAP net income applicable to common shareholders by average tangible common equity. Tangible common equity, also a non-GAAP financial measure, 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 $56.3 million and $50.7 million as of December 31, 2021 and 2020, respectively.
Includes loans held for sale.
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.
Capital ratios are estimates as of the date of the earnings release, January 26, 2022.
The Company prepares its Consolidated Financial Statements using accounting principles generally accepted in the United States (U.S. GAAP). The Company may disclose certain "non-GAAP financial measures" in the course of its earnings releases, earnings conference calls, financial presentations and otherwise. The Securities and Exchange Commission defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position, or cash flows that is subject to adjustments that effectively exclude, or include, amounts from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Non-GAAP financial measures disclosed by the Company are provided as additional information to analysts, investors and other stakeholders in order to provide them with greater transparency about, or an alternative method for assessing the Company's financial condition or operating results. These measures are not in accordance with, or a substitute for U.S. GAAP, and may be different from or inconsistent with non-GAAP financial measures used by other companies. Whenever the Company refers to a non-GAAP financial measure, it will also define it or present the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, along with a reconciliation of the differences between the non-GAAP financial measure it references and such comparable U.S. GAAP financial measure.
Primarily related to charges attributable to integration-related activities, signing bonuses, amortization of restricted stock awards, debentures, and promissory notes issued as retention, additional earn-out expense, 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.
Primarily represents the Company's effective tax rate for the period applied to the non-GAAP adjustments.
Stifel Financial Corp. | Page 10
Disclaimer
Stifel Financial Corporation published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 12:05:00 UTC.