ST. LOUIS, MO -- (Marketwire) -- 05/09/12 -- Stifel Financial Corp. (NYSE: SF)
Highlights for the three months ended March 31, 2012:
- Net revenues of $400.3 million.
- Net income of $34.8 million, or $0.55 per diluted share.
- Stockholders' equity totaled $1.34 billion and book value per share was $25.07.
Stifel Financial Corp. (NYSE: SF) today reported net income of $34.8 million, or $0.55 per diluted share, on net revenues of $400.3 million for the three months ended March 31, 2012, compared with net income of $31.4 million, or $0.50 per diluted share, on net revenues of $366.6 million for the first quarter of 2011. The company reported net income of $27.0 million, or $0.43 per diluted share, on net revenues of $356.9 million for the three months ended December 31, 2011.
"The first quarter of 2012 proved to be our second best quarter in terms of net revenues, net income and diluted EPS. The overall improvement in the economy positively impacted both our Global Wealth Management and Institutional Group's businesses during the quarter, particularly in investment banking and fixed income trading. During the quarter, we continued to expand our retail platform as a result of successful recruiting of financial advisors," commented Ronald J. Kruszewski, Chairman, President and CEO of Stifel Financial. "Increased levels of activity can be attributed to strong performance of the equity markets, improving investor sentiment, lower volatility, and increased risk taking as evidenced by improved pricing and performance for new offerings. However, outside of a major event or catalyst to move the markets, we remain cautious on the outlook for the remainder of the year. That said, we continue to believe we are well positioned to gain market share from the dislocation in the marketplace and changing regulatory requirements."
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Summary Results of Operations (Unaudited)
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Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
--------- --------- -------- --------- --------
Net revenues $ 400,333 $ 366,613 9.2 $ 356,878 12.2
Net income $ 34,773 $ 31,398 10.7 $ 27,016 28.7
Earnings per share:
Basic $ 0.65 $ 0.60 8.3 $ 0.52 25.0
Diluted $ 0.55 $ 0.50 10.0 $ 0.43 27.9
Weighted average number of common shares
outstanding:
Basic 53,243 52,534 1.3 51,849 2.7
Diluted 62,669 63,179 (0.8) 62,695 --
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Business Segment Results
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Summary Segment Results (Unaudited)
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Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
--------- --------- -------- --------- --------
Net revenues:
Global Wealth Management $ 248,348 $ 238,446 4.2 $ 224,569 10.6
Institutional Group 148,504 126,994 16.9 134,229 10.6
Other 3,481 1,173 196.8 (1,920) 281.3
--------- --------- -------- --------- --------
$ 400,333 $ 366,613 9.2 $ 356,878 12.2
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Operating contribution:
Global Wealth Management $ 69,178 $ 61,472 12.5 $ 62,872 10.0
Institutional Group 23,704 21,393 10.8 10,773 120.0
Other (33,628) (32,181) 4.5 (28,619) 17.5
--------- --------- -------- --------- --------
$ 59,254 $ 50,684 16.9 $ 45,026 31.6
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Global Wealth Management
For the quarter ended March 31, 2012, the Global Wealth Management ("GWM") segment generated pre-tax operating income of $69.2 million, compared with $61.5 million in the first quarter of 2011 and $62.9 million in the fourth quarter of 2011. Net revenues for the quarter were $248.3 million, compared with $238.4 million in the first quarter of 2011, and $224.6 million in the fourth quarter of 2011. The increase in net revenues from the first quarter of 2011 is primarily attributable to an increase in net interest revenues and investment banking revenues, as well as asset management and service fees and principal transactions revenues, offset by a decrease in commissions. The increase in net revenues from the fourth quarter of 2011 was primarily attributable to an increase in commissions and principal transactions revenues, investment banking revenues and asset management and service fees.
- The Private Client Group reported record net revenues of $232.3 million, a 1% increase compared with the first quarter of 2011 and a 13% increase compared with the fourth quarter of 2011.
- Stifel Bank reported net revenues of $16.0 million, an 80% increase compared with the first quarter of 2011 and an 18% decrease compared with the fourth quarter of 2011.
Institutional Group
For the quarter ended March 31, 2012, the Institutional Group segment generated pre-tax operating income of $23.7 million, compared with $21.4 million in the first quarter of 2011 and $10.8 million in the fourth quarter of 2011. Net revenues for the quarter were $148.5 million, compared with $127.0 million in the first quarter of 2011 and $134.2 million in the fourth quarter of 2011. The increase in net revenues from the first quarter of 2011 was primarily attributable to an increase in capital raising and advisory fees, and an increase in fixed income institutional brokerage revenues, offset by a decrease in equity institutional brokerage revenues. The increase in net revenues from the fourth quarter of 2011 was primarily attributable to an increase in equity capital raising and equity and fixed income institutional brokerage revenues, offset by a decline in equity advisory fees.
Institutional brokerage revenues were $89.5 million, a 1% decrease compared with the first quarter of 2011 and an 11% increase compared with the fourth quarter of 2011.
- Equity brokerage revenues were $44.2 million, a 16% decrease compared with the first quarter of 2011 and a 9% increase compared with the fourth quarter of 2011.
- Fixed income brokerage revenues were $45.3 million, an 18% increase compared with the first quarter of 2011 and a 14% increase compared with the fourth quarter of 2011.
Investment banking revenues were $58.0 million, a 65% increase compared with the first quarter of 2011 and an 11% increase compared with the fourth quarter of 2011.
- Equity capital raising revenues were $31.6 million, a 37% increase compared with the first quarter of 2011 and a 212% increase compared with the fourth quarter of 2011.
- Fixed income capital raising revenues were $10.8 million, a 256% increase compared with the first quarter of 2011 and an 18% decrease compared with the fourth quarter of 2011.
- Advisory fee revenues were $15.6 million, a 72% increase compared with the first quarter of 2011, and a 46% decrease compared with the fourth quarter of 2011.
Consolidated Compensation and Benefits Expenses
For the quarter ended March 31, 2012, compensation and benefits expenses were $254.7 million, compared with $231.2 million in the first quarter of 2011 and $228.7 million in the fourth quarter of 2011.
Compensation and benefits as a percentage of net revenues was 64% in the first quarter of 2012 compared with 63% in the first quarter of 2011 and 64% in the fourth quarter of 2011. Transition pay, which primarily consists of amortization of upfront notes, signing bonuses and retention awards, as a percentage of net revenues was 5% in the first quarter of 2012, consistent with the first and fourth quarters of 2011.
Consolidated Non-Compensation Operating Expenses
For the quarter ended March 31, 2012, non-compensation operating expenses were $86.4 million, compared with $84.8 million in the first quarter of 2011 and $83.1 million in the fourth quarter of 2011.
Non-compensation operating expenses as a percentage of net revenues for the quarter ended March 31, 2012 was 22% compared with 23% in the first quarter of 2011 and 23% in the fourth quarter of 2011.
Provision for Income Taxes
The effective income tax rate for the quarter ended March 31, 2012 was 41% compared with 38% in the first quarter of 2011 and 40% in the fourth quarter of 2011.
Statement of Financial Condition (Unaudited)
Total assets increased 21% to $5.5 billion as of March 31, 2012 from $4.5 billion as of March 31, 2011. The increase is primarily attributable to the growth of the company's bank subsidiary, which as of March 31, 2012 had grown its assets to $2.6 billion from $1.8 billion as of March 31, 2011. As of March 31, 2012, Stifel Bank's investment portfolio of $1.7 billion has increased 34% from March 31, 2011, with more than 99% of the investment portfolio comprised of investment grade securities, of which more than 67% were Government-Sponsored Enterprise guaranteed MBS or AAA-rated investments. The company's broker-dealer subsidiary's gross assets and liabilities, including trading inventory, stock loan/borrow, receivables and payables from/to brokers, dealers and clearing organizations and clients, fluctuate with business levels and overall market conditions.
Total stockholders' equity as of March 31, 2012 increased $55.9 million, or 4%, to $1.34 billion from $1.29 billion as of March 31, 2011. Book value per share was $25.07 as of March 31, 2012 compared to $24.32 as of March 31, 2011.
As of March 31, 2012, the company reported total securities owned and investments at fair value of $2.2 billion, which included securities categorized as Level 3 of $227.0 million. The company's Level 3 assets included auction rate securities and private equity and other fixed income securities with fair values of $170.3 million and $56.7 million, respectively, as of March 31, 2012.
Conference Call Information
Stifel Financial Corp. will host its first quarter 2012 financial results conference call on Wednesday, May 9, 2012, at 5:00 p.m. Eastern time. The conference call may include forward-looking statements.
All interested parties are invited to listen to the company's Chairman, President, and CEO, Ronald J. Kruszewski, by dialing (800) 651-2240 and referencing conference ID #74559190. 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 clients are served through Stifel, Nicolaus & Company, Incorporated in the U.S., through Stifel Nicolaus Canada Inc. in Canada, and through Stifel Nicolaus Europe Limited in the United Kingdom and Europe. 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 & Trust offers a full range of consumer and commercial lending solutions. Stifel Trust Company, N.A. offers trust and related services. To learn more about Stifel Financial, please visit the company's web site at www.stifel.com.
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. Forward-looking statements speak only as to the date they are made. Stifel Financial Corp. 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.
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Summary Results of Operations (Unaudited)
Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
--------- --------- -------- --------- --------
Revenues:
Commissions $ 123,303 $ 155,786 (20.9) $ 123,737 (0.4)
Principal transactions 116,233 92,859 25.2 93,963 23.7
Investment banking 70,438 41,418 70.1 56,075 25.6
Asset management and
service fees 60,818 57,680 5.4 55,920 8.8
Other income 13,294 6,256 112.3 8,379 58.7
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Operating revenues 384,086 353,999 8.5 338,074 13.6
Interest revenue 25,257 18,856 33.9 25,220 0.1
--------- --------- -------- --------- --------
Total revenues 409,343 372,855 9.8 363,294 12.7
Interest expense 9,010 6,242 44.3 6,416 40.4
--------- --------- -------- --------- --------
Net revenues 400,333 366,613 9.2 356,878 12.2
--------- --------- -------- --------- --------
Non-interest expenses:
Compensation and benefits 254,704 231,166 10.2 228,743 11.3
Occupancy and equipment
rental 30,791 29,325 5.0 31,967 (3.7)
Communication and office
supplies 20,373 18,845 8.1 19,391 5.1
Commission and floor
brokerage 7,612 6,649 14.5 6,097 24.8
Other operating expenses 27,599 29,944 (7.8) 25,654 7.6
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Total non-interest
expenses 341,079 315,929 8.0 311,852 9.4
Income before income taxes 59,254 50,684 16.9 45,026 31.6
Provision for income
taxes 24,481 19,286 26.9 18,010 35.9
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Net income $ 34,773 $ 31,398 10.7 $ 27,016 28.7
========= ========= ======== ========= ========
Earnings per share:
Basic 0.65 0.60 8.3 0.52 25.0
Diluted 0.55 0.50 10.0 0.43 27.9
Weighted average number of common
shares outstanding:
Basic 53,243 52,534 1.3 51,849 2.7
Diluted 62,669 63,179 (0.8) 62,695 --
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(in thousands, except per share data, employee and location amounts)
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Key statistical
information: 3/31/12 3/31/11 % Change 12/31/11 % Change
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Book value per
share $ 25.07 $ 24.32 3.1 $ 25.10 (0.1)
Financial
advisors (1) 2,013 1,947 3.4 1,987 1.3
Full-time
associates 5,135 4,916 4.5 5,097 0.7
Locations 326 311 4.8 320 1.9
Total client
assets 127,192,000 115,284,000 10.3 119,362,000 6.6
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(1) Includes 155, 160 and 154 independent contractors at March 31, 2012 and 2011 and December 31, 2011, respectively.
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Global Wealth Management Segment
Summary Results of Operations (Unaudited)
Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
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Revenues:
Commissions $ 91,023 $ 101,762 (10.6) $ 83,662 8.8
Principal
transactions 59,045 56,163 5.1 53,700 10.0
Asset management and
service fees 60,586 57,530 5.3 55,691 8.8
Net interest 17,647 11,169 58.0 17,602 0.3
Investment banking 12,470 6,312 97.6 4,015 210.6
Other income 7,577 5,510 37.5 9,899 (23.5)
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Net revenues 248,348 238,446 4.2 224,569 10.6
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Non-interest expenses:
Compensation and
benefits 143,757 142,586 0.8 125,053 15.0
Non-compensation
operating expenses 35,413 34,388 3.0 36,644 (3.4)
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Total non-interest
expenses 179,170 176,974 1.2 161,697 10.8
---------- ---------- --------- ---------- ---------
Income before income
taxes $ 69,178 $ 61,472 12.5 $ 62,872 10.0
========== ========== ========= ========== =========
As a percentage of net
revenues:
Compensation and
benefits 57.9% 59.8% 55.7%
Non-compensation
operating expenses 14.2% 14.4% 16.3%
Income before income
taxes 27.9% 25.8% 28.0%
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Stifel Bank & Trust (Unaudited)
Key Statistical Information
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(in 000s, except
percentages) 3/31/12 3/31/11 % Change 12/31/11 % Change
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Other information:
Assets $2,611,828 $1,787,531 46.1 $2,275,729 14.8
Investment
securities 1,673,866 1,253,953 33.5 1,403,522 19.3
Retained loans, net 657,081 396,244 65.8 631,173 4.1
Loans held for sale 141,136 30,866 357.3 131,754 7.1
Deposits 2,357,912 1,625,890 45.0 2,071,738 13.8
Allowance as a
percentage of loans 0.87% 0.63% 0.83%
Non-performing
assets as a
percentage of total
assets 0.11% 0.12% 0.14%
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Institutional Group Segment
Summary Results of Operations (Unaudited)
Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
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Revenues:
Commissions $ 32,280 $ 54,025 (40.2) $ 40,076 (19.5)
Principal
transactions 57,188 36,696 55.8 40,263 42.0
Capital raising 42,363 26,046 62.6 23,331 81.6
Advisory fees 15,605 9,060 72.2 28,728 (45.7)
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Investment banking 57,968 35,106 65.1 52,059 11.4
Other income (2) 1,068 1,167 (8.5) 1,831 (41.7)
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Net revenues 148,504 126,994 16.9 134,229 10.6
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Non-interest expenses:
Compensation and
benefits 94,024 77,187 21.8 89,497 5.1
Non-compensation
operating expenses 30,776 28,414 8.3 33,959 (9.4)
---------- ---------- --------- ---------- ---------
Total non-interest
expenses 124,800 105,601 18.2 123,456 1.1
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Income before income
taxes $ 23,704 $ 21,393 10.8 $ 10,773 120.0
========== ========== ========= ========== =========
As a percentage of net
revenues:
Compensation and
benefits 63.3% 60.8% 66.7%
Non-compensation
operating expenses 20.7% 22.4% 25.3%
Income before income
taxes 16.0% 16.8% 8.0%
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Institutional Group Segment
Institutional Brokerage and Investment Banking Revenues (Unaudited)
Three Months Ended
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(in 000s) 3/31/12 3/31/11 % Change 12/31/11 % Change
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Institutional
brokerage:
Equity $ 44,172 $ 52,398 (15.7) $ 40,598 8.8
Fixed income 45,296 38,323 18.2 39,741 14.0
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Institutional
brokerage 89,468 90,721 (1.4) 80,339 11.4
Investment banking:
Capital raising:
Equity 31,550 23,005 37.1 10,109 212.1
Fixed income 10,813 3,041 255.6 13,222 (18.2)
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Capital raising 42,363 26,046 62.6 23,331 81.6
Advisory fees 15,605 9,060 72.2 28,728 (45.7)
---------- ---------- --------- ---------- ---------
Investment banking $ 57,968 $ 35,106 65.1 $ 52,059 11.4
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(2) Includes net interest and other income.
Investor Relations Contact
Sarah Anderson
(415) 364-2500
Email Contact
