Stifel Financial (SF) investor relations material

Executive summary

• Q3 net revenue was $1.426B GAAP and $1.429B non-GAAP, essentially flat YoY; GAAP diluted EPS was $1.40 and record non-GAAP diluted EPS was $1.46, up 12%.

• GAAP net income available to common shareholders rose 11.3% to $224.8M; non-GAAP net income was $234.1M, up 9% YoY.

• 9M revenue rose 9.7% to $4.355B GAAP and $4.324B non-GAAP; non-GAAP EPS was $4.33, up 57%, or 22% excluding the prior-year legal charge. YTD ROTCE was 24.1%.

Financial highlights

• Q3 net interest income reached a record $301.7M, up 9.2% YoY and above the high end of guidance; loan growth and loan fee income contributed.

• Q3 investment banking revenue was $306.2M, down 5.3% YoY but $12M above expectations; advisory and underwriting exceeded consensus.

• Asset management revenue rose 14.1% to $492.2M, while transactional revenue declined 17% YoY and was 10% below expectations.

• Non-GAAP compensation ratio was 56.6%; non-compensation expenses were $298M, down 2% YoY and 4% sequentially. Q3 effective tax rate was 24.4%.

• Total assets were $45.3B; bank loans were $25.7B and deposits were $32.8B at September 30.

Outlook and guidance

• Q4 net interest income is forecast at $295M-$305M; loan growth was nearly $3.6B through Q3 against a $4B FY target.

• Q4 Institutional transactional revenue is expected at $145M-$150M as a normalized run rate, assuming no repeat of a September-like rate move.

• Management expects Q4 revenue to match the prior-year record of $1.56B and EPS to be higher; Q4 tax rate is projected at 19%-22%, assuming a stable stock price.

• FY revenue was near the low end of January’s range; including $70M-$75M removed from run rate through SIA and European restructuring would put it near $6B.