Driven by record revenues,
Stifel Financial Corp.
) reported fourth-quarter 2013 non-GAAP net income from
continuing operations of 79 cents per share, significantly
surpassing the Zacks Consensus Estimate of 66 cents. Moreover,
this compared favorably with 69 cents per share reported in the
Better-than-expected earnings primarily resulted from higher top
line and a strong capital position. However, undisciplined
expense management was on the downside.
For the year ended 2013, net income from continuing operations
were $2.51 per share, up significantly by 20 cents compared with
the prior year. Results also outpaced the Zacks Consensus
Estimate by 13 cents.
On a GAAP basis, Stifel Financial reported net income from
continuing operations of $52.1 million or 69 cents per share,
compared with $43.3 million or 69 cents per share in the
prior-year quarter. Results for both quarters included certain
non-recurring items. For the year-ended 2013, GAAP net income
from continuing operations was $172.9 million or $2.35 per share,
up from $145.3 million or $2.31 per share reported in the prior
Performance in Detail
Stifel Financial recorded net revenues of $1.97 billion for 2013,
thereby achieving revenue growth for the 18th consecutive year.
Results improved from $1.59 billion in the prior year. The
reported figure also beat the Zacks Consensus Estimate of $1.92
Net revenues were recorded at $562.5 million in the final
quarter, up 36.8% year over year. Additionally, it outpaced the
Zacks Consensus Estimate of $527.0 million. The results were
mainly driven by higher brokerage and investment banking revenues
along with elevated interest revenues.
Furthermore, segment-wise, on a year-over-year basis, Global
Wealth Management and Institutional Group segments' net revenues
increased 15.4% and 66.3%, respectively. Other revenues
were reported at positive $2.4 million as compared with negative
revenues of $3.2 million in the prior-year quarter.
Stifel Financial's non-interest expenses were $474.3 million, up
38.1% from the prior-year quarter. The rise in non-interest
operating expenses in the said quarter was mainly due to higher
compensation and benefits expenses and elevated non-compensation
Credit quality significantly improved at Stifel Financial in the
final quarter. Allowance as a percentage of loans decreased to
0.89% from 0.99% in the prior-year quarter. Moreover,
non-performing assets as a percentage of total assets declined to
0.03% from 0.06% in the prior-year quarter.
Stifel Financial's capital position was strong during the
quarter. As of Dec 31, 2013, total assets jumped 29% to $9.0
billion from $7.0 billion as of Dec 30, 2012. Book value per
share came in at $32.30, up from $27.24 in the prior-year
quarter. Stockholders' equity increased 38% year over year to
The company's Tier 1 leverage capital ratio was 15.4% and Tier 1
risk-based capital ratio was 26.7%.
Stifel Financial with its solid business model and strategic
acquisitions is well poised for growth. While the sluggish
economic recovery, regulatory issues and low interest rate
environment remain headwinds for the bank, we believe that its
sound capital position, improving credit quality and robust
top-line performance bode well in the long run.
Stifel Financial currently carries a Zacks Rank #2 (Buy). Other
banks in the same sector worth considering include
Investment Technology Group Inc.
LPL Financial Holdings Inc.
Piper Jaffray Companies
). All 3 companies carry a Zacks Rank #1 (Strong Buy).
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STIFEL FINL (SF): Free Stock Analysis Report
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