SF - Earnings call transcript Q1 2021 | Stifel Financial Corp.

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Operator

Thank you for standing by, and welcome to Stifel Financial’s First Quarter 2021 Earning Conference Call. All lines are currently in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. It is now my pleasure to hand the conference over to Mr. Investor of Head Jeffrey, Relations. Joel

Joel Jeffrey

by I cast Thank to Jim Victor I Stifel This joined on Nesi welcome CEO, of to and release may without today to and slide And Jim our to material first you, GAAP on Kruszewski; quarter presented and Ron our CFO, our Co-Presidents call I’m operator. Financial’s Financial. I presentation call. XXXX Stifel not everyone conference and www.stifel.com. and like financial audio reconciliation our as turn our some this on Chairman our forward-looking Zemlyak; Chairman Earlier the Kruszewski. for to Ron non-GAAP deck to listeners an and the our the which website, issued Relations to our we found Investor and state disclosed Ron? on duplicated, CEO, note release presentation our Marischen. in earnings we Stifel I and our the would page reproduced be basis. statements non-GAAP is or that refer rebroadcast non-GAAP numbers the to I are call will at Financial of can press of morning, slide results posted would Corp. be over earnings throughout copyrighted measures. now would a release. information consent refer remind also of a

Ron Kruszewski

delivering time for my results. the of call you Thanks, Stifel thanking I’m this thank start to to at Joel to by our partners results. and morning good quarter for going taking listen first XXXX and record all

company people. is a always and value our will Our be as

will sheet And of Have Marischen So Jim let our our review I our with quarter. and balance our up before outlook give Q&A. highlights me expenses. wrap some

the of operating well to our of we environment. the X strength ongoing quarter As was from for record as the benefit as Slide in firm first XXXX as continued Stifel another see our on you can investment

quarter's non-GAAP more focus Our revenue revenue an than a a The up our second our in in resulted and revenue have represented $XX our not invested highest $X.XX expense earnings us by of record million a of made per year-on-year we've we history. enabled share had was nearly on in global have and was EPS both investments in XX% to surpassed driven in we would management which record greater to XX% wealth quarterly $X.XX magnitude record the of in than that growth business. first the far quarter groups. participate The institutional and management in the billion, last our increase and by business

return recruiting equity Annualized results which growth increased the XX%. were tangible driven XX%. our robust margins past balance markets. of Other and pre-tax book of by more sheet record than highlights Our XX% over for success, and quarter, the our in common tangible capital on value

the high the Turning year. revenue next slide, percentage early our revenue was at is consistent just our increased yet with end came to first the range a of record in XX.X% conservatively quarter policy above to compensation a $X.X of of as stated, surpassing XX% billion. calling Compensation net as which in for I our annual net

investment guidance management. expense came in banking Our to This our provision XX%. revenue operating ratio strong but and was credit operating year our ratio XX% of expense the excluding expense approximately strength about and our totaled below gross-ups, full

loan quarter. performance in banks the with our strong we As portfolio other This $X economic our a during like improves, updated release model. of provisions in resulted our the credit economic credit million outlook coupled of have

adoption year was last calculation. economic more a key into our outlook was recall of driven and the input you that negative the by CECL specifically As expense provision the

increased which Stifel’s provisions, credit $XXX million first quarter from XX% of impact the XXXX. neutralizing pre-provision totaled the So of pre-tax, income

Moving on segment starting our Management. results and Wealth Global with to

a year-on-year. totaled million revenue X% record quarter up First $XXX

the business it is at increase in believe of our strength this decline our I interest as bank it nearly impressive subsidiary. net While income understates $XX includes million a

levels of billion record and bank client of private administration increased continued in revenue levels. from driven success from XX% activity as again NII, with business our the as the billion brokerage asset Excluding management as the assets by asset finished quarter prior and $XXX we've $XX under and client improved enhanced lower impact growth benefited recruiting. the We nearly quarter. well client strength Total

strength service second in of assets slide growth line fee-based of rose and quarter of platform. should in the recruiting as terms total added a We the asset $XX highlights item growth trailing year. billion management fees of in $XXX next production this sequentially the quarter solid of XX X% additions advisor our advisors drive further had the XX-month of Additionally which - the our The we drivers million.

I’d quarters, cumulative is was that beginning financial approximately $XXX examine a by this recruiting time of than XXX While does typically production it and XXXX, remind recruited longer frame. we’ve Since million. fewer with cyclical advisors of in over added you recent we’ve those

I the levels As pipelines remain robust year, look at and our at year. I strong anticipate of the recruiting another reminder

first begin Stifel the channel. from Securities XXXX we've were we As you probably we we actively release, since recent In which that recruiting Independent as announced seen independent our press in quarter, to operated Century announced a rebranding Advisors. intention the

channel. and that this and outstanding fact Given the place will in that an focus be in already the enhanced plus growth overall supervisory recruiting believe our have legal we structure we efforts this by platform, our on the industry market channel renewed

this million from last million. $XXX on year prior the quarter revenue our Net Institutional was which second Group. record quarter's and Moving our Group; totaled Institutional approximately by surpassed for quarter consecutive $XX up XX% record to represented

XX% of a pre-tax same generated ago. major points from business Our which in continues operating business strong performance a our the period from as activity, margin was up market recent X,XXX the both strong year our than Europe. benefit and across all revenue basis to our was and from lines investments Canada contributions We more

to Looking by fixed XXXX. year from the million while income million at I record equity business would the With revenue increased respect $XXX as of prior continued a in comparable our XX% our institutional our components totaled equities quarter XX% first up ago we note totaled brokerage the record XX% of gains revenue set business, that $XXX quarter first trading increased. strong our generated businesses, trading surpassing activity and levels which

be Algo up quarter sequentially electronic good our XX% that progresses. we record revenue of brokerage the third the banking products first to by last $XXX second a on across we the second set quarter, revenue by consecutive by participated my coming see more driven several the quarter Fixed the note example only represented last brokerage quarterly by player revenue nearly record the trading over last at how we've XX% the quarterly as million record include quarter highest increased ATS year IPOs trailing income last last and of board Additionally our few now products the in of well years and activity a X, contributions continues I'd non-CUSIP to in comments would are in our revenue. our expect were as revenue primarily quarter than of This become a and and significant dollars was fixed in we these increased income as quarter's and investment $XXX business which surpassing million. businesses. as is launched fully book-runner Slide from by businesses our was year. was record million driven surpassing in quarter. our On the to investing more Equity raising standout million underwriting Similar $XX we capital

verticals were strongest healthcare, consumers. and Our technology, financials

during quarter. our there reported, activity an first widely SPAC was related the amount As of incredible within industry

for than in little equity underwriting XX% accounted a SPACs more However, our the quarter. of revenue

more SPAC pipeline. the about whether a represents point, recent the of saturation we confident So a slowdown strength our in pause or activity traditional are

While business equity fixed was robust, results in we our income. also recorded great quite

Our $XX XX% the of up quarter year-on-year. was for fixed a income underwriting record and million first was revenue

manage quarter represented municipal as Our market in XXX an rebounded municipal first which issues increase XX%. business challenging finance the XXXX we from of lead conditions of

if additional we While we strong to the public business. finance believe an start off were infrastructure are see our that Congress we to year, pass bill, would tailwinds a for to

from continue debt corporate also business. to solid our growing issuance We see contributions

revenue XX% for Regarding almost of record represented million any business, a $XXX third our advisory and first by a our quarter. highest revenue quarterly

terms from and see of technology we've to the and In benefited verticals, expected in continue from pickup broad healthcare. results financials consumer based

some upon Looking the change our larger previously of quarter, a second expect forward and market solid of advisory increase or transactions announced in course substantial a to see our the economy, closings in anticipated we barring revenue. to based

me optimistic very Marischen. over compared double-digits began XXXX. overall Jim that, business I And they turn we CFO, our remain banking for our And pipelines, up of the the terms now our call In with let to in year. where investment are to

Jim Marischen

Ron, and Thanks, everyone. morning good

me in impact quarter again program few on $X.X share the EPS strong earnings. quarter. first the open Let only was Similar - XX%. strong turn compensation This value by And resulted nearly and at by surpassed the billion let's book by generated ROTCE while the on highest comments our our begin the book making in increasing stock regarding which resuming to generated of generated buyback our of interest our of GAAP given to results quarter. last equity tangible earnings assets GAAP a quarter, in $X.XX income. equity we XX% value. was second seasonal the increases In ROE history accomplished last now in GAAP market net and We with returns an

totaled $X quarter million $XXX income net the sequentially. up which For interest was million

X% banks Our portfolio the our more interest by we our NII remix XXX the levels that securities our and growth firm-wide loan did Both basis some of quarter. benefited our see approved bank to basis well loan would out fees assets margin the as quarter and during NII. NIM note margin interest from and a that earned interest earning during also points. net portfolio of into as episodic XXX points in asset increased to average contributed net I

in loan quarter. the But growth this contribution to this than We occurred securities in the decline. offset somewhat more first expect and decline quarter that second will the

we such in with while over $XXX million stabilized be have As the to of quarter. quarter be a very income the Further to in the net produced to NIM second million continue quarters, we'd range last terms first asset a NIM we to interest expect a similar $XXX of sensitive. few and

what in what from actually additional cycle. update will driven increase XX% XXX continue by a of and to cycle, the deposit for to deposit be rate data competitive we we an This earnings. and I curve But much an quarter basis of note our million deposit would generate Stifel an million discussed data betas $XXX the last assuming to over to $XXX happened a last point I rates would across pre-tax later that would the environment. been As XX% portion have very to used but we highlight, beta. weighted estimate the entire that analysis was represents the this a

and into both loan next period ended the $XX.X more onto on loans investment slide; prior up Moving total We commercial banks billion portfolios. in and the net the of We detail from billion growth approximately the I'll consumer go portfolios. with quarter. $X saw a

portfolio by residential the the to wealth $XXX rates despite for interest our we loans see million sequentially mortgage Our during continue increase management increased in demand quarter. clients as from

balances. continues based to approximately momentum loans these FA in continues $XXX drive be strong as loan loan to securities increased portfolio million. by increased recruiting Growth Our

Our commercial XX% primarily which during portfolio loan increased for quarter. the comprised our by is portfolio XX% C&I accounts of loans of total and

capital that individual of it we have within out sense and well line presentations, Our while more than would million. loans is banking representing $XXX lines diversified in is felt financials note comprised loans, as PPP past call each PPP X% equity accounted funds portfolio fund exposure $XXX but capital given been highest accounted for to banking an item. C&I classified I made million fund venture of sector banking for size, in growth which approximately with of for our the its portfolio. and fund this private break

be view active banking in return. an as this will to continue look the risk-adjusted We we space as to fund attractive

end. of We value was Moving an change amortized the pleased CLO of at the holdings last fair occur to quarter expected quarter by cost in dominated of This be investment the and which continue subordination the with average price in AA seen some by provided material XX.X% to of our AAA underlying anticipation portfolio payoffs securities CLOs. from X% portfolio, credit and We've seen these any can in performance. to at in be be continues the not the which quarter. increased second to by

additional a Turning negative of more had expense and allowance calculation. provision were as our to a economic offset improved than loan the scenario through the we growth tied allowance, by to million CECL reversal reserves $X our

of the level points the allowance excluding is a the levels important during of a reserves of and loans basis inherent between portfolios growth end, was reserve portfolio commercial an release XXX at consumer declined loans our commercial As the of ratio XX of total given quarter, and XXX the basis to quarter our while to allowance points At result PPP relative the look composition to loans. It basis their to was consumer risk. total points. at loan

by less commercial by positions $X points. sectors carried charge-offs. All million these assets we credit C&I loans to of metrics did non-performing million continue Further, $XX in to at from book loans of in reserves opportunity of our X% with strong equates well them. also discount resulted see the and impacted bar. or by five we non-performing selling which X were We in sold and reducing This take basis on than to remaining excess roughly de-risk five loans COVID to more where

in our strength our our impact to by came was ratios and decline in issues sheet net $XX quarter. capital risk on leverage our earnings. and to This and the at in and growth XX.X%. equity in by driven capital the million first Moving on was settle XX.X% balance capital liquidity, the taxes retained of offset ratios base The

per late quarter. repurchased first We in our resumed $XX.XX average at shares market the program open an approximately of XXX,XXX share repurchase share. also price We

offset book value increased net share restricted $XX.XX. vesting increased modestly the of up the Our by from tangible per of $XX.XX share per the value was aforementioned Our to quarter stock on as to impact prior equity income book

financial sweep bank X% remains position results We S&P our cash to The our Financial’s total to the aforementioned the our overall program liquidity Stifel strong. used by positive would based fund I position. good that increased about highlight and also continue quarter was to feel third-party approximately during financial as operating which improved recently on growth. strong outlook

discipline. through year-on-year slide, increase margin revenue points to accruals lower our The the compensation and next the improved we result than quarter XXX of In continued first expenses. pre-tax growth, was On go more strong basis the XX%. expense our

our revenue. stronger and represented expected excess driven related $XXX at a issue XX% the the approximately discrete totaled rate than before as during by see our the came third our added below given Absent prior impact came down be to approximately provision compensation. and portion be fourth ratio nature quarter transactions, transactional quarters of conservative points revenue XXX XX.X%, tax the from we of a anticipate early loss Our strategy in second tax the with This The related primarily comp we vesting half our full XX% lead that stock we've business. million recent accruals any XX.X% our the in limited XX% to the in also early market rate XX.X% ratio year of That range expect would year in of was is consistent effective to in which items, of to guidance in occurs That to the conservative compensation back basis excluding banking our Non-comp XX.X% quarter. due was investment the said, to assuming benefit the was year. and year. credit strong large effective accruals flexibility that other range OpEx, the the the to in above year to and in the revenue. to of to could net expenses our stay of conditions

share turn average repurchases over Ron. increase With that, and assumption share share back our we'd diluted the our up shares. count was any stock the expect call second terms count, share price, X% assuming million fully in XXX.X a as I'll result primarily diluted share stable quarter In of our total to average the fully a for count of Absent additional price. to

Ron Kruszewski

Thanks Jim.

a I’ve start. is of As strong call, beginning the to said the off very year this at

our in then played conditions faster. XXXX, of not Looking at and highlighted have out for we for expected back cases has some only the economic market we but much happened that expectations guidance as many

success, benefiting markets past assets, debt for trading business robust metrics and activity equity, Our levels credit increased of from pipeline. equity recruiting record is bearing investment equity higher strong a interest and issuance, banking solid

the continue expect operating strong XXXX. As environment of to vaccinations for remainder economy increased we recovery, continues very and its the a

looking Additionally our a revenue year our path of $X said, factors we quarter, conditions I'm full to the wealth $X.X seeing comments the I'll and same we full based With see in favorable a so on guidance. respect and to market revenue to management to what about business above our strong seeing tracking outlook, is our year off forward billion good cited, that quarter end for high second already exceed billion our our to are a many is Global second of to a start. start. far in the guidance we're continue, year of what guidance full expectations. make some off With our

clients last benefit Our levels asset will the and the is NII engagement. quarter based continue guidance in then increase we management fee midpoint above fees quarter first assets our of and X% to from see

For institutional levels. remain investment group, our pipelines at banking robust

in factor for advisory While from particularly expectation timing our will given expect any in quarter, always given the contribution see greater investment to financials. our banking M&A we'd increased play revenue a a business in

number are have of transactions confidence the large close that for my increases this the forward, look a I of as scheduled and to Additionally remainder year. we

back levels but quarter, still Pace so have experienced remains in Tord far on strong. from activity pulled underwriting first the of In terms the quarter the

guidance the in see remains to in and year market place we sequential stable. second remain expect the Moving on would typical ratio compensation assuming expenses, to conditions the compensation in our full decline quarter

to first we as Our non-comp be operating and continue in similar expenses. entertainment to quarter in expenses travel see should the those modest increases relatively

use terms full-year represents from solid to risk-adjusted into took $X.X advantage conditions, of In as the continue returns. guidance. to of good balance The our more conditions than we continue credit of on our initial our will we in we billion grow XX% we increase sheet. could to deployment, see this see In focus as capital. guidance first quarter, we sheet If balance our growing balance sheet of always, similar returns capital credit capital deploy

We continue to offset likely be shares activity. but opportunistic repurchase will continue to to dilution, repurchase we'll otherwise with to our

Lastly, continue acquisition to and is a will business we has opportunities growth strong returns. into at historically and in our as been look company and investing investments generated has always franchise Stifel our

have all please So, me great capitalize in this proven but is environment, a that to adapt sum flexibility to current position operating only could And occur. on to that is business saying open questions. the for of let the line our up the the with changes to successfully strength not by operator,

Operator

Instructions] question line come the Chris will with from first of Allen The [Operator Compass.

Chris Allen

and will you think about within be you C&I the payoff opportunities more about of kind just like industries Maybe what right what the color looks it's bit in how just you're much on achieved, balance the good. the any you credit can better the seeing can be CLO sheet it that? where terms that little of outflow - looks now, grow of a will can reduction what in sectors can you dig the talk if quarter. Nice just growth know more Maybe obviously

Ron Kruszewski

Yes, that? you to I’ll - Jim, take want do

Jim Marischen

off. can I start Yes,

growth, increase see continued I that seen to on side consumer opportunity on a opportunities the of I So, almost XQ in to or side. for think loan consumer terms compared The little in XX%. lot was we've of you’ve XQ is up over thing a XX% a the think

see to as the continue rates strong as base We relatively side interest estate on where security side demand residential real well given are.

as of a within a we of was and side, or PPP expect relatively loans the In portion is that a those regards obviously banking. anticipation that of C&I we opportunity the the those good we'll payoffs. are in in going of have The after prefunding, It's seen to occur the be transitory space. the to of kind growth anticipation emphasize the basis. growth with flat loans to of continue are some warehousing those payoff exposure of forgiven think front saw largest within I On types we individual we'd the that XQ, be that some C&I on temporary will those so to balances CLOs, we've

Ron Kruszewski

think demand. foremost organization I that demand that that in just billion lot banking adjusted and are which general just larger read management believes we $XX-ish lot investment is you And first a first AUM and a sheet say say right grow balance we see demand I is would I've the a will lot quarter banks saying always I being what that’s $XXX about an of would what say of and there's wealth returns long and demand tepid our good of is I from a we're now our we bank billion risk when the and likewise. so said in saw

Chris Allen

then frame side about trends you brokerage quarter. Any what's versus And versus side. the help anything and the industry be maybe in What of in Understood. seeing the the XQs us incremental equity pointed and of those products funds on out would course slow opportunity maybe first been Thanks. how us color coming electronic terms we're guys taking kind of the in helpful. around obviously out on share, driven environmentally

Ron Kruszewski

out ETFs build will those we that years that to optimistic both can us past, so capabilities, while market we clients our our built the reason area help increase just research transact we've cases. share, so our see with which products in over of brokerage in sort we've is funds the as of - to have where an we driven labeled needed was offerings. enhanced that that institutional because us And some buy I’m execution it's think electronic and those of side I supplement our and out suite that products the algos

and But products how them. we're out. are running using So and up those investors adapt we’ll seeing see plays to that

Operator

line come will from Devin with Ryan The question JMP next the of Securities.

Devin Ryan

the Independent start but color for can on really push never give Advisor on been kind the and a just a you of big the independent made expectations Clearly business. have Initiative Maybe you guys before Ron side that there. bit more in

be kind moving So type in strategy forward? around of of kind I'm the to then of going What advisers be kind different curious thoughts what targeting? you'll And of will is just this be market Stifel outlet be any are with migrate considerations, kind to little employee an potential for an advisors just to a there so of helpful? would and bit more color

Ron Kruszewski

an we place. at When Well, way competitive legal two advisors go different channel competitors, advisor to potentially all the so look of independent we're to offering a in since we've it's never for different from space it advisors do had just and something we we course on, have that separate very to and number scratch us, - us Jim just an want to them service we had we anymore. terms would supervisory broker to starting of just a like talk but and XXXX, not space of our is of independent in our as tell that we're space about that mindset. dealer often really structure, But not structures or frankly was evident the independent a and focused looked it built going then so structure I to platform of

up it. that's going focus one to We put We're running. just have offering and and very some compelling on a

I growth include that channel. advisors will that I’ve that think I independent with. So said really believe our as future now engage previously we And didn't a it's recruiting

that, running goals visits we to any do I would see have So that for we're And saying the and we’re hosting already in that's it. early how or out it’s like don't anything channel. not game, market but

Devin Ryan

Yes.

Helpful back right where Thanks incremental most the And making Ron. a just the clearly momentum. with to you're kind good on creating is of Business and to into just I now investments excess think there's here maybe color. kind a business. compelling Okay. able up you're be what's cash. business year reinvest period tremendous lot in follow starting the of of And a

market the growth focused. about to of more transactions even you of you'd kind come perspective maybe the M&A across in you're seeing also of And types for of prevalent then some of right kind investing stuff an maybe where of the priorities for have and appetite? guys guys now, love So that are I'd are just types talk maybe you in of terms where the kind from

Ron Kruszewski

in look the proposition. No, wouldn’t do we invest deliver if our for investment. probably always investing today our investing I to we but say Well, table in their of we the in specific our areas, advisors technology terms all you’re are are help stakes that people, that's technology [indiscernible] - looking we in advice business and/or digital

is So investment. evolving. market's technology ever The that's certainly evolving an ongoing always

and always the in relevance anything high. an can not in good I is have, have any clients - the think our future it's we for acquisition looking values as a helping percentage It's did That's of front, them. we invest that the that our ongoing to continue to a serve built organized very in a lot ongoing operating do expenses. - or with and foundation we're that and get our improve always on communicating Yet always that market never it are technology going we've we’re serve. where we and any we that asset allows us it And thing. we're to market help we clients again

that and look previous made when will years press had back the and our I did I quarter near not revenues that in that moment highlighted the and investments this business say which level said the that acquisition I look we take of five we I we'd in made the release, are at via revenue today. is what As be the some we’ve this of nowhere we to

So prologue. past that is

absolutely to to to going that. continue have do we're do need there’s So something. no to But

Operator

of the The line comes Credit with Craig next Suisse. from Siegenthaler question

Gautam Sawant

wanted This Sawant the just Craig. should kind trended advisory pipeline just about follow-up advisory the in filling of pace the And to far? there through for channel. with is and on rest independent please of dynamics? How of we And also the Gautam recruitment commentary conversations onboardings Can initial your how so advisors I the of the year? think some you expand have on on

Ron Kruszewski

question that a I will increase. said so a I with first, that I from had announced of even huge your second percent For days conversations XX number of conversations, from zero we've mean with ago, that we say just - having not

channel. So that we've field of landscape There's expect in number - is to very And conversations. with playing offering. we competitive independent established There had having really from those visits the land continue. on We we the that not feel a a a players. compelling we some

pandemic, by prepared beginning. what I be was on to continue ability that more of they were is Zoom who mean compelling recruiting So, to are people hire to commentary, of move There actually it of in pipeline With would to has - hiccup. I the are will clients. if share and going is our to pipeline, and our to recruiting see at the that flow sort of had with will beginning have there or out an able people into has that the recruiting, the ebb And respect had as on has probably it. and XX any days some the end of no and found it - both to do the things we of we the than we impact share I say onboard I been, that of seasonal, hire some we really the the people pandemic would said, that

maybe not slowed months, at to I say it the over down. to being I to prepare, go As that couple would being people look not of the properly have able it office, last able

the people, a We're but that fact pipeline. I have is That's impacted which to I of in by to office. recruiting are trajectory it's our many able instinct. but to go people do people, pipeline it just think of in gut our lot being very no when moving, been the look I And talking not the pace Our people my and strong. the there's no at change or at talk see

a at flows, that where will and And robust. very it's swinging also more we're competitive increased, pendulum think competitive but that landscape I the average. than I has now ebbs it's say but

pandemic of up. normal things as recruiting times, pick would will we the those come put all I will together So, it out say

Gautam Sawant

recruiting to the should we And speak as in XXXX, one the if you down? normalizes future XQ decline conservative for conservative you compensation in quarters a expect and mentioned - follow-up, revenue sorry ratio occurring how ratio can

Ron Kruszewski

a great if record revenue guess I we've think that's normalizing normalized question. that. of years down I of I XX got revenue. not to mean consecutive tend And I was revenue mean

of. of think I normalizing revenue no

hopefully this One year. of one. these But I'd not areas be wrong, not this

be happened what be and look history, and conservative and look up the with is and may trend of we're That I M&A if years of you just chart strong And this of is and we've year year. I historically today. back second we’ll just in revenue historically always by think comp in we where seasonality And last the the the in I that. the at year. second at And coming. see always before suspect and that up true the so the deals the year first of guidance firm, number goes what year done. back see public normally ratio with That changes do business, a that to to at the think finance this has as comp the to best of within the to with and you'll down go want things and way our picks look point year see we year the said, then generally range stronger half at do. half just timing what four revenue people to the tax quarter our our we'll you'll last half our is then the but it of quarter is in before we look it tend what our and business ends understand

I past question an just basis. on your have answer to we historical would how at look to the So, our as compensation accrued

Jim Marischen

path is there point remarks thing if we there. And exceed guidance revenue see flexibilities just prepared to out talked a yet. that levels, at we see updated remain highlight well. wanted remains path But these again as put not that to a strong We've guidance does our if maybe add in the we the do revenue we for bit little in to one a more just strong, do

Operator

The next of question will the Sachs. come with line Goldman from Alex Blostein

Alex Blostein

the potentially with You quite on billion given of guess think $X but momentum imply I about number you in the are that in like be that last the the comp point your on a would to the we full the high kind guidance revenue operating the question, kind what picture for guess front rate confidence single-digit fact that last operating not that guys your a seeing Jim a of business in the leverage leverage lower my year. expressed head model for kind I revenue as you year? the exceeding guys bigger on on the clearly of Ron know year growth lot ready should you revenue of

Ron Kruszewski

able going spite you're again how Well look on. I just about goes I've of year is we ratio as I operating level okay. forward come comp to going see to accrue said the to I just been think comps the down what as comp ratio,

efficient I been expense pretty think the level. operating we've on

we've really point expenses job revenue. been acquisitions and have done back integrating. did a a XXXX is think guidance I operating few good of those at and Remember really, this at below in we’ve as percentage great our a that we of

the flexibility So operating can Jim on increased even I more And side. give think would revenue. will said you us see that both as leverage that in comp

competitive margins that's by So not in factors. think seeing don't huge compensation you're is expansions because bounded I

Jim Marischen

provision $XXX at add revenue our absolute that excluding that points up do ID of expenses But two end we of number just percentage was OpEx ups. - have point I specific would little million the a the of to non-comp below strong quarter. non-comp. full Maybe had guidance of very were to bit excluding gross low out dollar color a we Obviously We a in the specific terms the and more are revenue. there. tied

below said forward our really remain these of in comp That until being here. said in the the up. low see numbers similar to we strong of see we where don't As of picking any really change see end material ability potential range T&E guidance any conferences a come do and ratio, we with we we do look revenues year the latter the half

Alex Blostein

I then, the these Got around comments expansion sense M&A. it. another always for for of Stifel guys strokes think you're broader All guys makes - one right. about And makes heard for you levels? That makes kind lookout particular sense. but on you an guys where any at kind areas of things, organic what you are

Ron Kruszewski

history down. big when see our look is out don't things that like don't it. relevant have - make feel we We're if as as I write more and we opportunistic. change. go they're I three and And know - these we'll I done it we acquisition going And to businesses. lot of that a we're in want they're to us for not something factors and

to we pick which hurdles. opportunistic management, needs practice, So, trunk and opportunities we when our our people think it about execute needs can to of that as our as be more will we And well it is think you the area, historical long may specific to to European joining would needs all the if accretive fixed those operations, themselves. accretive be sort meet, financial a the Canada, institutional and wealth we us be as then of our us. at very will present to we equity It anything want look those importantly income, to make relevant, shareholders meets

Operator

come of Research. question next The Instructions] with the Steven will Chubak line from Wolfe [Operator

Steven Chubak

strength value I'm strategy. a does at in given have The you to ask bit as I independent sorry, just what position, sense think capital than build to thing compelling I'm trying as more follow-ups your we least on your it you your to about going make Ron, understand have some one offering competitive is area? more more think buy just to scale better makes earlier said to the question actually efforts the of follow-up advisory of a the a or the some prop And incumbents? to versus So little that this

Ron Kruszewski

have zero, competitive. all - starting Well recognized all from could say. ground okay. that, and I not say someone we it. you I approvals of we that trying to the need, okay, our our offering didn't from you need What have remotely which and as we've better you out let's need more technology you need trying - applications, you independent to that - channel not or that's mean do. built was broker that, we cloud-based here point said And And sitting first but an our more to an ability we've and to I'm working of well, get have to was make dealer, do channel saying We're independent service another platform that capital learned we're I what that was

and So, we're competitive have in a that we just, we’re another we believe offering. marketplace participant

competitive. as So established that's what in we I but will - I say there is mean players believe be some think that we to the space,

Steven Chubak

this Right, and regarding thanks one.

Ron Kruszewski

business buying years. versus opportunity scale if - way to way into you the came attractive well the that an we've scaling, were offered over you an again built know And saying Stifel that

The need we believe is that capability, I right. buy would something not don't that's we to difference against. be So here the

we so to which to adding and looking it capability be management to so into adding we're we traditional no this, have the have a capability. it at have would hire me capability space again can just We the and that wealth different this or we the

we've case, In deals that Sometimes And not we've acquisitions think we - where that's not really offering. the of we've the made I particular done don't product because had case. this reason.

scale, space management. with wealth independent the - have product We scalable covered on but effectively it's the the is

the system, cases - structure. same same So supervisory many base in technology same clearance

still competitive space. space. that driver play opportunity other look just is channel. see, And you be to - we’re know growth our rate But to in that's So employee - what very to our our just in continue seen we we going

Steven Chubak

valuation on deliver buyback, was perspective that to to in on run you trying focused that the peers you for your of encouraging admittedly on on So, relatively with still the bullish or but to Thanks XXXX it's hoping that and just somewhat know relation commentary follow-up certainly it's your Ron. reconcile some quarter. just I a versus still see just outlook perspective, tepid? been buyback not call run I But earnings you’ve to buyback very as higher gap relation to the capital remains your a, rate well? in position get And light that in the strength XXXX appetite just rate general? - especially this reinstituted

Ron Kruszewski

I valuation Well, you I'm on still been glad have gap. significant. the it's up, focused brought that

But its actually If stock. material. and look it - because look at We we as really in I’d will in buy have. you always points you of my deploy that more be back opinion your capital on like interested opportunistic look gap that at view we we're it’s

deploy certainly buying see Our but to opportunities we're dilution, it back we for capital comment elsewhere. also now

capital investment balance is so, our our attractive I'm interested on put you revenue base. always our our certainly franchise and - and making stock grow transaction an multiplier return. And acquiring me not just to building on at a balance I'm ability by that's looking then some growth But on to financial kind shrinking the building of

And for to by growth. the enhance deployment at the returns look So We lever at right the time pulling are our do balance we right understand repurchases. dilution. to and constantly trying we'll dividends shareholder through so. continue at understand look We we sheet capital we need acquisitions and share and

Steven Chubak

I in the Thanks squeeze of and loans Ron. just just If the on on securities. I more the dynamic and quickly, could resiliency on a asking asset in-balance yields in one couple both NII had the

much the you're episodic what that industry and drove yield Maybe could loan to well fees. yields trend in how today? expansion did size just you where the the I'm buck that loan that. as wondering flagged if You the speak clearly contribute securities higher reinvesting to the

Ron Kruszewski

what said obviously so prepared our and didn't size remarks. we Yes, in we it

early aided you you as it where fees the points XXX is portfolio, that table between at where last you you in basis PPP significantly C&I it saw the that look somewhere see points. the by in was well within call It's the Obviously and today. payoffs. call as almost - pretty pretty yield release earnings on basis around If saw increase some loan a quarter, to yield substantial C&I specifically XXX

continue will XQ. fees Some of those into

when lesser being continue. definitely I to a in we that portfolio. think bit whether it's it's highlighted securities I will that definitely think as That But meet they the some you extent, the whether said portfolio, NII about loan but of little think well.

NIM. been proven we reach able we've think have stabilized that to a out I

would We sheet have for loan outlook the asset really the the into NII opportunities think And really are sensitive. you think specific I growth getting think I want all of and or additional things we very without a remain minutia that those are there. the those and to balance about we takeaways key fee highlight not when

Jim Marischen

I’ll final add and on Yes just the color that.

good in I said nature balance are but I about we strength. credit. and of we've demand position a talked think also balance we our remixing that, asset as how built the certainly a terminal of NIM, we that - to factor we towards there sheet, have - that feel have going our right lot now sensitive is just sheet. forward. we We a very talked We're that remix conservative I about feel where

in rates which at my spot the during so So - feel we the rates positioned very I we uptick in pretty balance stays point this career But about good in very sheet an see. have believe position I uptick for lower longer rates if well if feel an a have we do we're good and and of will we'll in we're anyway time.

Ron Kruszewski

current of terms the in other described one XQ comment, guidance just XXX our those of NII. And to factors XXX in are we of all just

Jim Marischen

Yes.

Operator

any [Operator audio questions. we closing Do were have to no presenters Instructions] the With remarks? that, showing further

Ron Kruszewski

quarter is participants for for see these our a July. results thank first strong our you, listening forward to were results. I’ll which late our to our continuing financial momentum And quarter off I reporting to We in do always to to you in close start. conditions. look I We second as probably

you have thank So a great and day.

Operator

call. your that conference your today's and you This lines. for thank you participation conclude disconnect please does ask We

Stifel Financial (SF) 27 Apr 212021 Q1 Earnings call transcript