Sign in
SF

STIFEL FINANCIAL CORP (SF)·Q1 2025 Earnings Summary

Executive Summary

  • Record first-quarter net revenues of $1.26B (+7.9% YoY) but GAAP diluted EPS of $0.39 fell sharply (-72% YoY) due to a $180M legal accrual; non-GAAP diluted EPS was $0.49 .
  • Against S&P Global consensus, revenue was ~1% below and EPS was a significant miss; management quantified the legal reserve’s –$1.16 after-tax EPS impact and noted core operating EPS of $1.65 absent the charge .
  • Segment strength: record asset management revenue (+11% YoY), advisory (+15% YoY), equity underwriting (+22% YoY); Global Wealth net revenue was $851M and Institutional $385M, though margins compressed on litigation expenses .
  • Guidance maintained for 2025; Q2 NII guided to $260–$270M and expected Q2 diluted share count of 108.2M; management may moderate loan growth in favor of buybacks depending on risk-adjusted returns .

What Went Well and What Went Wrong

What Went Well

  • Record first-quarter asset management revenue ($409.5M, +11% YoY) and highest first-quarter net revenues ($1.26B), reflecting diversified strength across wealth, advisory, and equity transactional activity .
  • Advisory revenue grew 15% YoY to $137.5M, with strong contributions from financials, technology, and industrial services; equity underwriting rose 22% YoY to $49.0M .
  • CEO tone on strategic positioning: “Our net revenue of $1.26 billion marks the highest first-quarter revenue in our history… We remain optimistic about long-term growth” .

What Went Wrong

  • Non-compensation operating expenses surged to 36.7% of net revenues (vs 22.8% YoY) on a $180M legal charge; GAAP pre-tax margin fell to 5.0% (vs 18.8% YoY) .
  • Net interest margin (bank) declined to 3.10% (–14 bps QoQ) and NII came in ~3% below street due to repricing lag, day count, lower loan growth, and absence of episodic success fees recognized in Q4 .
  • Wealth commissions were softer on limited activity before late-quarter volatility; net new assets were modestly negative early in Q1 before turning positive in March .

Financial Results

Consolidated Results vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Net Revenues ($USD Billions)$1.225 $1.365 $1.255
Diluted EPS (GAAP) ($)$1.34 $2.09 $0.39
Diluted EPS (Non-GAAP) ($)$1.50 $2.23 $0.49
Pre-tax Margin (GAAP, %)17.7% 19.5% 5.0%
Compensation Ratio (GAAP, %)58.6% 58.3% 58.3%
Non-comp Operating Expense Ratio (GAAP, %)23.7% 22.2% 36.7%
Effective Tax Rate (%)26.8% 8.3% 16.4%
Legal Charge EPS Impact ($)——–$1.16

Results vs S&P Global Consensus

MetricQ3 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD Billions)$1.2009*$1.2848*$1.2725*
Actual Net Revenues ($USD Billions)$1.225 $1.365 $1.255
Surprise (%)+2.0%+6.2%–1.3%
Primary EPS Consensus Mean ($)$1.6037*$1.9774*$1.6390*
Actual EPS (Non-GAAP diluted) ($)$1.50 $2.23 $0.49
Surprise (%)–6%+13%–70%

Values marked with * retrieved from S&P Global.

Segment Breakdown

MetricQ3 2024Q4 2024Q1 2025
Global Wealth Mgmt Net Revenues ($USD Millions)$827.1 $865.2 $850.6
Institutional Group Net Revenues ($USD Millions)$372.4 $478.3 $384.9
Wealth Pre-tax Margin (%)36.5% 36.6% 14.9%
Institutional Pre-tax Margin (%)11.2% 20.0% 7.1%
Asset Management Revenue ($USD Millions)$382.6 $405.8 $409.5
Advisory Revenue ($USD Millions)$136.9 $189.9 $137.5
Equity Capital Raising ($USD Millions)$50.7 $47.9 $49.0
Fixed Income Capital Raising ($USD Millions)$49.4 $61.4 $45.6

KPIs and Balance Sheet

KPIQ3 2024Q4 2024Q1 2025
Client Assets ($USD Billions)$496.3 $501.4 $485.9
Fee-based Client Assets ($USD Billions)$190.8 $192.7 $189.7
Consolidated Net Interest Income ($USD Millions)$252.1 $272.5 $262.0
Bank Net Interest Margin (%)3.10% 3.24% 3.10%
Tier 1 Leverage Capital Ratio (%)11.3% 11.4% 10.8%
Tier 1 Risk-Based Capital Ratio (%)17.9% 18.2% 17.6%
Common Stock Repurchases ($USD Millions)$20.2 $45.5 $210.9
Dividend per Share ($)$0.42 $0.42 $0.46
Weighted Avg Diluted Shares (Millions)111.0 112.1 110.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest IncomeQ2 2025—$260–$270MIntroduced range
Fully Diluted Share CountQ2 2025—108.2M expectedNew update
2025 Financial GuidanceFY 2025Prior frameworkMaintained; no revisionMaintained
Compensation RatioFY 2025Full-year guidance in placeAccruing at 58%, at high end of guidanceMaintained
Capital DeploymentFY 2025Grow loansMay moderate loan growth; prioritize buybacks if superior ROIStrategic shift
DividendQ1 2025 onward$0.42Raised to $0.46 (+10%)Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroMomentum building; improving conditions Record revenue; improving conditions in 2025 CEO highlights tariff-related volatility; cautious near term, optimistic long term Volatility elevated; cautious optimism
Adviser Recruiting28 recruited; strong pipeline 8 experienced advisors 52 advisors added; acquisition of 36 B. Riley advisors (~$4B AUM) Accelerating scale/productivity focus
Bank M&A/Regulatory——Expect faster approvals; deals could close within 4 months; strong FIG outlook Improving backdrop
NII/NIMStabilization commentary Bank NIM 3.24%; strong Q4 NII NIM down to 3.10%; Q2 NII guide $260–$270M; rate-neutral balance sheet Slight pressure; volume-driven
Public FinanceStrong fixed income capital raising +53% YoY fixed income capital raising March activity “ground to a halt”; busy underwriting calendar now Temporary pause; pipeline healthy
Legal/RegulatoryElevated litigation expense Elevated litigation expense $180M legal accrual; –$1.16 EPS impact; appealing award Escalated in Q1
Technology Initiatives——Launch of Stifel Discover content feed in Wealth Tracker app New client-engagement tool

Management Commentary

  • CEO: “Our net revenue of $1.26 billion marks the highest first-quarter revenue in our history… We remain optimistic about long-term growth” .
  • CEO on macro: tariff uncertainty and policy disagreements have increased volatility, but “we do not believe a recession is likely… we remain optimistic about long-term growth” .
  • CFO on estimates variance: revenue ~1% below Street on lower transactional and NII; investment banking +$10M vs Street; non-comp ex-legal ~$5M below Street; tax rate benefited from excess tax benefit .
  • Capital management: may moderate loan growth and prioritize buybacks given share price levels and muted loan demand; 9.2M shares remain authorized .

Q&A Highlights

  • Adviser recruiting: focus on high-productivity, holistic teams; more competitive transition packages while maintaining ROI discipline; B. Riley advisors expected to be more productive on Stifel’s platform .
  • NII outlook and cash sweeps: Q2 NII guided to $260–$270M; sweeps and smart-rate balances saw seasonal tax-related outflows but expected to normalize post-tax season; venture/fund banking deposits growing .
  • Bank M&A/regulatory: approvals now as quick as 4 months; expect potential for announcements to close within the year; FIG advisory outlook stronger vs. last year .
  • Public finance and fixed income: March activity slowed amid tax uncertainty; underwriting calendar now “as busy as it’s ever been”; fixed income trading expected flat to up in Q2 .
  • Buybacks vs loan growth: math favors buybacks at current valuations; cautious on loan growth amid muted demand and adverse selection risk .

Estimates Context

  • Revenue: $1.255B actual vs $1.273B S&P Global consensus (–1.3%); management quantified ~1% shortfall * .
  • EPS: $0.49 non-GAAP diluted vs $1.64–$1.64 S&P consensus (–70%), driven by the $180M legal accrual (–$1.16 EPS after tax) *.
  • Q4 2024 and Q3 2024 context: revenue beat (+6.2% and +2.0%) and EPS beat (+13% in Q4; small miss in Q3) on stronger advisory and underwriting * *.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core franchise intact: diversified revenue drivers (asset management, advisory, equity trading) delivered record first-quarter net revenues despite macro volatility .
  • The quarter’s narrative is dominated by the legal accrual; absent this, operating EPS was $1.65, underscoring underlying earnings power .
  • Near-term NII will be volume/mix driven in a rate-neutral posture; Q2 guide $260–$270M and NIM stabilizing hinges on loan growth resuming post-tax seasonality .
  • Institutional pipelines remain active, especially FIG; faster regulatory approvals could catalyze advisory revenues in 2H’25 as uncertainty around tax/trade diminishes .
  • Wealth recruiting remains a growth engine; 52 Q1 recruits plus B. Riley advisors (~$4B AUM) should bolster recurring revenue and productivity in 2025 .
  • Capital returns are likely to be a focal point: $211M repurchased in Q1, dividend raised to $0.46; management may tilt further to buybacks given ROI vs loan growth .
  • Watch for resolution of legal matters and public finance calendar normalization; both are potential stock catalysts alongside any improvement in underwriting windows .