SF - Earnings call transcript Q1 2022 | Stifel Financial Corp.

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter Earnings Call 2022. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session [Operator Instructions]. Please be advised that today's conference is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Joel Head Jeffrey, of Investor Relations. Please sir. go ahead

Joel Jeffrey

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

Ron Kruszewski

zero XXXX Ukraine, and least. to to taking morning our you The an interesting XX-year the forecasted listen by start the the hikes and year, to institutional and earnings generated our markets XX war favorable VIX businesses. $XXX is barrel. To oil yields barrel. good Fed short-term treasury to the we guests, and XXXX share markedly and The for more Joel. are thank investment led around business was on inflation morning the reopening record and XXXX. environment is in forecasting our off raise Thanks, in this first Last the rate forward by X.X%, today in couldn't in equity $XX post-COVID surging is be our as quarter Fast results. above to say time the oil of United treasury States. [ph] XX%, rates, a Fed's contrasts the The when was XX-year was revenue increased more volatility, specifically, rates recession X.X%, banking dot with This the year-end. different. a have yield lower resulted higher a and per X.X% the above VIX is market to and

highlight market One over rising ever-changing short-term generate rates has objectives to are Stifel. to of good diversity model, and of all is being time the the business proven our most Simply, very for conditions. which good this banks of and despite growth consistent else balance call for equal,

from As I rates the interest remainder interest the substantial increases will to benefits in net of expected look to XXXX, be income. our short-term

for our Stifel. to be fixed offset impact $XXX XXXX strong expect help businesses our In global elaborate, management XXXX. income million expected wealth in the of the revenue now income net of our will and Marischen increase can interest $XXX other by million growth lines. Jim revenues As to we is coupled with to some market-sensitive to short, This, over another more year

Management forecast Much full revenue provide quarters. had and and second results our quarter, equities to XXXX, is net have million, that quarter model for at a let's can diversified environment, with no net small recorded Stifel the which first to Global for difficult a revenue for first our income revenue like EPS record X% important market feat considering balance. highest look results. that it's year why said, business. record increased business Wealth a So interest our fee-based our quarter the illustrate our first as To in $XXX the our illustrate, especially

other XX% business, yet offset million, declined our to hand, $XXX income within our revenues and strength also equity are balanced the our institutional issuance. industry-wide as the decline XX% On fixed advisory revenue institutional roughly a of helped we in

detail $X.XX first Taken quarterly the results. businesses. together, next down of Stifel's contains our on balance year. totaled the from slightly This slide quarter revenue billion, underscores only more The prior our

our down said, modestly. I revenues were As

from our same XX%. period variable that pretax, pre-provision of on expense compared model is return last of tangible income. measure in and our However, common benefited as bottom of to year profitability line A XX% equity our resulted pretax the margins to compare

compare. let's So

income quarter per impact last $XXX per credit of pre-provision Driving to excluding share was increased Our leverage in are operating loan would provisions, our earnings XX.X%, of quarter. from by up the I which X%, improve. our our declined of have this share ratio million note, margin, continues related to $X.XX pretax, would year this our improvement operating to first as the compensation growth,

XX.X%. was full operating guidance. year expense above growth the ups, just ratio was investment totaled our And banking Additionally, excluding our XX.X%, which

our of result first quarter. EPS best our together, second $X.XX Taken quarterly represented and sixth strongest

Global on and Management. Moving operating Wealth our with to segments starting

margin. sheet, revenue productive as net record coupled by of the balance advisers, Our improving growth the net well in our financial addition driven interest with was as increased X%

Asset quarter finished When was first in S&P market quarter. X%. down outlook proven up the January, and projected be we I about XX% we in year. And sequentially back as last guess were discussed Management the off the the would that XXX XXXX revenue X% we our right from

by equity strong total billion. of fee-based and $XXX was ended continued in as our assets assets billion, offset impact the quarter the were at the partially $XXX inflows client valuation decline However,

our recruiting and On an the asset next slide, growth loan we highlight activity, increased strong portfolio. client

remaining training minimum well productivity $XX advisers were we of XX $XX as production trailing The advisers that recruits production through This XX-month quarter, advisers achieve million. million. Stifel's the standards. with For XX trailing as total added XX-month includes added with of program,

additions platform, bit benefit goes was volatility we and market recurring in see and we on. terms revenue consistency The Although in net strong of a revenue our anticipate resulted recruiting, nearly revenue headwind wealth overall the a year as our management sources interest continue increased This to extremely from in coming continues to during the interest income. growth from our of in of XX% fee-based quarter. of

it our if increase a loan we And $X.X the quarter, grew in represent first the XXXX. XX% loan would up end sequentially. balances Lastly, portfolio annualize billion during by you quarter, our from X% of

broadly we in across people of our The lending. including finance, and multiple fund lending lending. commercial challenges Our and to consumer syndicated growth and growth across venture verticals was continue commercial by invest capabilities CRE as was commercial spread and both sponsor a driven channels, banking, and number

in year. Our the of moderate quarter we will in of interest be in sequential The retained higher the consumer rates drive expect second the result strong, helped mortgage be to increase in loan increase growth pace retained book in mortgage And half portfolio. our growth XX% of net increases the that income. portfolio our also our the the second interest while will anticipate continued we

and sheet. for As Jim highlight our projections our net will balance asset income the of strong are interest sensitivity discuss,

on our Moving to group. institutional

our segment view at this Let a with we segment, growth me as by start Stifel, institutional saying albeit some business, that cyclicality.

our compound five on years. have despite consistently growth chart see bottom As and down XX% revenue. you XX%, slide, minor respectively, rates XX-year of and institutional we the some the grown XXXX, can the Through our were annual from

on to While year's first last our track quarter, first are in we $XXX record quarter generate down million still highest revenue revenue second was of net institutional XX% history. versus our the

increased year-over-year, net revenue activity the revenue. advisory in resulted with transactional underwriting in Our and decline lower

Our institutional operating leverage the pretax a reflecting business XX.X%, margin generated this in business. of

components institutional the to on the Moving group. of

of business XX% million. from helping last equities down million the million generated revenue net and came was year, fact at million, that $XXX up $XX in or $XXX income or business fixed to our offset $XX Our XX%

As in done on the next I discussion transactional for revenue will I've this the leave capital one. speak to and our raising the slide past,

of income, of record record revenue fixed equity in and strongest history, income trading businesses, declines income XX%, combining rates quarter terms overall strong million, benefited Remember offset from last retail revenue Equities activity our strong the business. as quarter business. equity had a trading was the revenues first to global the markets. In volumes was and up XX%. primarily increased driven that our addition and in second Sparks, in trading fixed issuance $XXX by year's Fixed increased activity down we Vining our tied

to XXX X% look addition, the a X% was of In the On investment trading impacted XXXX, seven, we compared gain. XXXX in our decline business. banking at which S&P first our slide quarter in up

the record revenue weakest our first in $XXX we For which was some million, than of underwriting offset more by posted – the we've was record market quarter, advisory time. quarter as seen down XX% equity as revenue

strength revenue up the as continue our We of with to XX%. of advisory pleased business, $XXX was be million our

business segments. Our business is our advisory technology, we Buckfire Miller restructuring record diverse strong proxy industrial, a posted contributions well got for practice. Financials, At from as also quarter, as a while across consumer, KBW,

closings, we business. also can do impact benefiting to We while the public from to for very backlogs, investments our made our timing are Overall, outlook deal we've transactions. we advisory continue see private in always strength and the about good feel in ability

business. a the In This terms our investments made our to of share. equity in internal market according calculations, we've decline in underwriting, the despite XX% gained of underwriting, again Stifel was result

from time be than income activity. as $XX of million is this a primarily volatile. business again, business transactions business the posted of partially the industry-wide decline can share finance XX% offset number institutional of municipal greater decline underwriting of the of from to we to fixed transactional of XX.X% in our be cyclicality conditions time last helped this as expected a Our terms a market business impact our from experienced But to year. revenue, XX% market increased in quarter, and to XX.X% in Overall,

this continue that the markets the that We've our turn However, the to anticipate years, within institutional stabilize grow with Jim and to in call business as let the ability me coming over demonstrated Marischen. CFO, grow the over revenues to our our diversity we that, consistently business XX to mitigated And volatility. past periods. of

Jim Marischen

start Thanks, morning, addressing everyone. I'll net Ron, interest by and good income.

and XXX continue increase above sequentially. an We points. driven bank an benefited portfolio by in Our is was the increase March. in which the from NIM from grow impact basis we rate in range increase The in of the anticipate of X% points. as to the our interest rate to second $XXX would we assets, XX% We second the point occur NII from NIM basis came net rate income up of to project $XXX hikes growth interest-earning our bank quarter, in this a majority loan said, XX basis that XXX million recent second guidance a million and at two in to in in million, to our With the we see assuming quarter hike quarter. $XXX XXX

range three results NII you conservative. Fed As recall, to our the one to year was This full balance sheet for after million. was significantly funds initial March. our Well, be appears billion increases more increases, expectations growth million zero to the $XXX $X of rate $XXX rate based market to for of [ph] billion, guidance beginning on $X in in quarter's and guidance in

in asset Given a rate When beta, range additional the million. balance end would the of year million. of quarter XX% NII $XXX the of we XXX hikes hikes, high of sheet guidance to end will incremental low and for expected eight of beta, an of the deposit $X and deposit billion for range our this XX% increase impact an basis composition, the drive $XXX asset our growth modeling current to a points the billion total $X growth our rate year, second

billion prior to with which on next the loan approximately and the quarter. $X.X portfolios. up total the investment net the of ended $XX.X was I'll Moving quarter slide. loans bank's highlight We billion, from

Our commercial industrial particular million strength $XXX by in with and increased the sectors. financial portfolio

$XXX remained consumer On mortgage increased our was up strong. recruiting portfolio the as and our portfolio by million side, modestly, securities-based loan

beginning holdings. CLOs That increased investments a in of Total given Agency million $XXX we MBS sequentially are see and Moving the to environment increased opportunities to said, and decreased portfolio. CLO lower as investment rate the current by yields. result

growth metrics. loan at loan and total credit aforementioned ratio loans provision remained to totaled Turning loss basis due allowance points. $X.X The XX to million to the

metrics. assets points, credit X percentage assets continued as in of indicating a at our total remained non-performing strength basis Our

Moving on to capital liquidity. and

our leverage The and stock-based capital and risk-based and to were result seasonal growth XX.X%, of compensation. XX.X% ratios respectively. the decrease capital the in Our on declined loan modest equity impact from ratios

from During quarter, of first of the the repurchased we shares million through settlement $XX employees. vested net shares,

slight monetized of experienced in declines, value was Our recorded MBS book This corporate our tangible per of bond as stock-based impact value as relatively quarterly comprehensive to our aforementioned as income. offset in accumulated holdings. compensation, the positions an unrealized book were other the well and by loss and loss share earnings due Agency unrealized impact

plans Given loan funding bank portfolio, received our continue about to to our our questions we a grow capabilities. of number

through fund deposits years. other venture of our the As primarily direct to illustrate and $X is clients retail utilizing groups, billion billion you to $XX.X through additional money end, the Sweep banking the Through is Bancorp fund to the bank was commercial Program, of Further, hold well available and currently $X.X our chart deposit as These the can programs. quarter deposits our available grown bank retail totaling additional few of just see, funding to we've secured bank $X.X Stifel utilized outside borrowing added by deposit in third-party not a only with as billion. has also access currently, has that Sweep deposits and PCG from generated from Program swept clients other balances billion over At past an generation $X.X but the the were facilities efforts bank. an that banks. other billion

recent per payout a quarter. per $X.XX doubling dividend $X.XX Lastly, resulted XX% to ratio the I share wanted in our in to highlight our that of annual share from

the On we slide, through next expenses. go

XX.X% year from but basis the Our comp-to-revenue year, last high was ratio of XXX down of points our end full guidance. above

of rate XX% year. the the the The quarter loss between the Non-compensation we in guidance. effective and Ron transactions updated presentation, expense at operating expenses credit in to and quarter stated and net be investment XX.X% represented during the million banking comment totaled effective ratio rate excluding revenue. the came expect will conservatively in on approximately tax our $XXX As we XX.X% our and accrue to earlier Later typically compensation in XX%. we related comp expenses, past, provision second

average count we'd quarter stock count Ron. stable that, diluted in a share any was our to with our million And be with Finally, the Absent repurchases XXX.X guidance. fully call I'll line to assuming fully second additional diluted assumption for share back the shares. turn and share price, expect over

Ron Kruszewski

Thanks, Jim.

in our that the history. far off market and exactly XXXX, we're strongest management, a fixed first diversification not second the we generated from XXXX institutional said, of we also So been fair emphasized projected, record what that is consistently That the environment in had we've as start business be to up wealth strong revenue quarter initially drove to of XXXX. income say shaping our it's has model. different very This is our importance to why

diversity is from long growth see the through consistent have revenue the market of various top to due we can much a of You record slide, of which the conditions, of lines. our track

and potential are As XXXX. such, we market volatility in that could emerge we that to believe the economic well weather positioned headwinds

$X.X to revenue are billion maintaining full $X.X As guidance of year we such, our billion.

Management that revenues interest revenue. increased by continued factors strength and include will be Wealth asset Global solid our in net a management number at driven of recruiting Looking income, segment,

limited In as may revised as if terms the our guidance increase sensitivity in the rates the is Reserve increases in the raised Fed That represent in for low income, increase which in and prior points, our Federal market. funds to said, in account earlier, basis mentioned rate. much of high be from The XXXX. XX% million still guidance our XXX end increases increased underscores interest guidance on we lower been can of underappreciated Jim end revised they net by of we've increasing only guidance rates I based guidance end believe slow. above economy our would – believe business, to $XX an NII meaningful the The has asset the of high begins increase end is our our our the how

impacted they by be group continue volatile market. group. revenues institutional institutional XXXX can to a we Our the in our said, believe be that results illustrated more how quarter first for year are our solid the changes That will in and

as from expect the advisory first levels pipelines capital from we contributions should are the from Our our raising practice, low our revenue as and quarter. robust business improvement investment banking consistent improve our in

should seasonal training as gains. increased due revenue in transactional Additionally, increase well as improvements volume, to

our ratio additional lowered our the to we due XX% primarily Lastly, revenue XX%, guidance NII. compensation to for to from

While low will source, to we compensatory try early additional this from conservative accrue be relatively already increasing year, us to allow in we our enhance in anticipate the compensation revenue how we expected leverage. the revenue operating that

resemble too observed, tightening war and more chasing reflects of an emergence U.S. monetary policy, much and and [ph] So only inflation, inflation, through the its money latter economists created a increase reduction With which federal money of stimulus. expect in the quantity in of considering of increase a not Ukraine monetary a especially vast do conclusion, be the in respect and to can rapid policy easy too XXXX fiscal output. the of we spending XXXX, few of combination Milan to goods. by produced the the succinctly treatment inflation requires

of of thoughts these the free a war the dollar position imagine impact Ukraine, of in that do in humanitarian economy, a the diplomatic tragedy, Regardless are not and trade to hierarchy. all, with solution, the the that inflation is laid XX a it money foundation the increase during over broad XXXX think to current years rate With safe in I pre-COVID times growth that the in to say at for four the in it's U.S. XXXX. above that and U.S. XXXX that peaked order, people the to rate existed hard supply world the Ukraine. our it's to respect events MX global

our that to result, acquisitions That XX factors for of capable as that, adapting we Taken said, for please model, together, years, environments. company and The by changing inherent has operator, Stifel both confidence demonstrated open ability well as creates generate balance over risk. results. to strong introduced continued are gives for and positioned and in opportunities us a these is significant With a more of augmented questions. line growth business our the uncertainty,

Operator

comes [Operator line of Research. first from Instructions] the from question The Steven Chubak Wolfe

Your line is open.

Steven Chubak

morning, Hi. Good morning, Ron. Jim. Good

Ron Kruszewski

Good Steven. morning,

Jim Marischen

Good morning.

Steven Chubak

Last started off betas first of - had cash ramp low moment, topic the start at into headwinds it to cash organic just and you're some the may a time, you which better hikes. even manifest. That sorting. with cycle the raise deposit XXX feel pretty coming bps CDs growth. you significantly, because very be on to admittedly started This sorting as Wanted with different hot to cycle, does

here You pool noted a to larger $XX swept for funding a of sense be billion. that balances? do as support of cash available there's roughly I case much to XXXX? impacting of And Bank see to sustainably wanted to a growth? is from can how sorting And even $XX cash you billion beyond But get growing Stifel credible how readily there

Ron Kruszewski

of A questions Steve. lot in that,

Steven Chubak

I two would heavy part. consider a

Ron Kruszewski

yeah. two Heavy part,

when - when commercial deposits of funding of too, and we been to base. continue grown our that. recruiting. retail, we building funding build-out fund the build We've I grow done we've to seen we instead First also through And looking just going - all, you've it continue through at we're it, AUM. and in acquisition. I about at we'll banking, look our we've way as and I consistently, both mean targets AUM our through have we've can talked recruiting source and to organic

billion $X believe growth, if next of to funding. we that. easily you this we that about have year billion into to do We're So plus take have I $X year, adequate funding talking

May bit. that jump of think a part here So little let Jim the segment. I the in I'll was first

base. I deposit a think talking you're about bit little

Jim Marischen

of a base. different there's cash this We're asset I From couple perspective, around, yield think one Yeah. starting a things. from that's higher our a sorting maybe on time thing

return. cash So sorts acceptable deposits to with we of on more still that beta deposit more the a searching can and on rate-sensitive to to That we've put be said, more competitive also programs make some higher-yielding deposit hold deposit. an in for deal

guidance income, put in the those [ph] think some we're about us last we position. a out is what the factors when low XX% think And experienced end, in different of then cycle. on a on than so our talking we the deposit interest you which put about net And beta, vastly significantly I higher

inherent net even I of are margin of kind interest at bit your about under betas, So beginning NII these this those you things the And we types of a and different the question, think types produce. can talked deposit little as of time.

Steven Chubak

that more for for I color, I just that by for hoping on just guidance. maybe don't what the you year one backdrop next it's advisory as some one to businesses Certainly, surprise your The think was and next which provide from Jim. guidance? here? is think Thanks conservative market-sensitive given markets for could mark-to-market And least the full just tougher assuming of ECM fee macro the any guidance. for we about 'XX, equity at businesses. should taking granularity backlog also on you're And fee advisory, but over admittedly, few cited quarters the the the of over challenging in couple quarters. a outlook speak you record the convert

Ron Kruszewski

take, mean, business things and you Look, need I'll in in monitor. still that see - I we all the drive environment the our the place. overall We business to environment are okay? is place, that advisory something But of Yeah. if

business. And a million. first advisory good quarter our had about optimistic we're $XXX that we said, well so And of as

base in we expected think respect a the the had case our what And first Jim, to I then in quarter. was As decline fee-based, was...

Jim Marischen

in it the low terms the increases the mid of year. XXX S&P was management, In of single digit end asset through

Ron Kruszewski

Yeah.

we forecasting And the on basis so were that's management. that asset

recent pullback it the isn't thought, but so. is So recent, this

Steven Chubak

adds that the of even hoping the disclose Fair in you for whether of long-term adviser still just the challenging do the a quarter, to I win independent saw [ph] nascent in just that organic organic platform. you a one independent enough. the Despite contribution could from help whether while that recognizing in could you large on quarter, client term, certainly a was squeeze I organic algorithm? the more what buoy and and the volatility see see growth level backdrop. growth the early, And nice could outlook. it level long channel And sustainable the the if growth was recruitment as over

Ron Kruszewski

Our you're about I assets or growth, organic mean... talking advisers,

Steven Chubak

Assets?

Ron Kruszewski

ahead? Go

Jim Marischen

Yeah. more single dynamics mirror for bit that's terms first over would is growth But new still or to. that digits. quarter experienced there I And say, of challenging probably think No. I It mid little obviously, assets. net probably was in the low a think historically that guide cycles. of of or more the X% X% we X% multiple what would operating kind we've I

Ron Kruszewski

Yeah. mean, And approaching business recruiting that historically, channel I channel. about are successful. historical our channel of in shoots. augmenting in at certainly something we green The it. that - optimistic look, terms see is as recruiting. in But we're our I is a different of independent years terms employee the recruiting bit long, into it's We what We're looking little

Steven Chubak

Very so for questions. my taking helpful color. Thanks much

Operator

The next [ph] question comes from the line Your of Kevin is Ryan open. line

Unidentified Analyst

thanks. Hey,

Ron Kruszewski

Kevin. Hey,

Unidentified Analyst

Kevin Ryan.

that If guys? are How you get you one.

Ron Kruszewski

Kevin was if name Ryan... Devin middle I don't your know

Unidentified Analyst

Yeah. Exactly.

questions with try Steven take the asked think different but route. three me parters a all there, these to let I [ph]

So what And well. bit that Jim, seeing you're obviously, market you as kind of capacity the little time. about more of had are more interest firms, lot Can maybe I and mentioned just bit growth want what there's as bank obviously how and in competitive little to is has appreciate capacity kind rates type I'm the bank a up, there, Obviously, parse dynamics? expanding been well. there, you of attractive you guys and a have as through yields of a curious think around CLOs success. the going other in long a

where high a competitive of in on looking? level kind the just and So you're dynamics then bank

Ron Kruszewski

last money that And all, factor much in as demand increase seen as first be rapid lot Look, for going to MX. that say, me of year, of there's the Yeah. in makes to believe that XX% want a we supply saw deposits. not we've people

would the that bit, a not there's is argue will [ph] is the And this they're factor could that sheet But a scenario being it of unknown tune way. I goes where Fed - and a the seen to its different balance shrinking be be that other little deposits Devin, about. against So world over I'm that. we've wash that But liquidity, And it's not the also the talked how here much place. all think time. the factor sure

Jim Marischen

And Yeah. maybe specific categories the of a growth. back to pivoting little bit

and diversified channels. that, confident I think feel lending venture, the There to a And number we've banking, reason growth. grow of in into whether our Ron number to us different helping CRE. a been then in the there. comment teams years XXX We're of few diversify the capabilities we've based, lending, seeing that last yielding really over are and invested capacity kind private residential just the And that that's ability people that portfolio, additional range. it's fund the CLOs about of that spoke we banking, is in is CLO securities

see that rate mix. asset rates kind attractive happily of overall we add so floating of asset as to as And would continue rise we that's our part an

Ron Kruszewski

bank funding growth, think, what I in to XX% funding. our deposit $X five billion see want generate fund sources. to constrained going to the and billion funding, it underappreciated to sometimes the grow. continue going kind ability just that. think We'll I place. say a bank, years, is organically blocks to grown again, funding, our we're We've I for we're growing our goes balance building loans We've do grow to to also, both funding do last $X don't sheet while Devin, billion. $X demand of the and we're and look are of $X to that, XX% the our billion continue But to And year you and to at grow to for the I by is if generate a That's loan as year. it us shown

Unidentified Analyst

and are either on that obviously, - side, as brokerage for go raising And Okay. I appreciate question you a income to And as little implications just of that capital to the maybe Vining ECM the I'm from institutional you what outlook and going earlier some outlook rates particularly, round kind well. the there implications maybe the we're Sparks advisory been your on business, But healthy fixed for color. have a high level. now some to Great. [ph] talk the backdrop Thanks out fixed isn't on fixed income. up, income hit pretty on then it's bit about all new rate degree. Steven's or curious, in

we just well? of some the puts as that in business as takes So bit maybe a and transition

Ron Kruszewski

Yeah.

is additions in. I'll as we've put give I've business just both trading, look quarter, and as we We The a sense. business equity, think the said, see I income as that - comment finance first fixed improving positive both income to forward, that and some factors public the high-yield fixed and that's also flat a was we market from we seasonal been first challenged market that's been happening the And quarter. year, by the but some under in think to a very stress. relatively - that what's good public is finance. finance public which just up Overall, from also it's been last in year,

the also market mix, in certainly first the decline businesses. and equity-linked the markets, impact the has is the I - a advisory issue, mentioned good the going Our business, XX% PE but advisory equity capital going the Equity of firepower, lot as and our have was will that that the quarter And factors, that's help volatility - new the help very, will to in volatility the PE we're that. lot seeing very issuance we'll trading a backlog. benefit what I from to said, on side and firms in that and that's

institutional I'm forward. a as picture overall, to in our we paint of trying today sit So here business going improvement

Unidentified Analyst

Appreciate it, I Thanks, it. well. Great. appreciate Jim Ron. as

Ron Kruszewski

Thanks.

Operator

of line Our next question comes Blostein Sachs. the Alex with Goldman from

line Your is open.

Alex Blostein

morning. Good guys. Hey,

Ron Kruszewski

Good Alex. morning,

Alex Blostein

multi-parter. top multi-parter add the probably of to on I'll the

keep we'll talking a the So for about second. bank

I set alternative to could customer cash could out yields now. the yield the money fees given exhaust will fund right? market in So accounts that versus here some yields, kind cash aside the things of $XX pretty hoping a of was of pay sort ultimately shortly. sort you terms fact chase that frame of are have Is attractive for I of So maybe something in of right billion that higher a guess you what's truly level there that to stress operational, guys way a frame

of first then talking XXXX. to that's on side course of kind the And we're over deposit is just make to the want kind XX% average So I of really that beta the sure XX% things, to the of part.

entering north beta. could message? that of we So deposit be the and potentially, XX% potentially XXXX Is

Ron Kruszewski

I'll the first. one take first Maybe

balances And significantly obviously, so manner regulatory operational a in the classification those That's terms are balances small. the there. to There's a say we're The in million-plus where cash, in operational vast program of cash is in I larger talking But the bank majority group. about. sweep in that classifying of we're relatively you're average that that get cash clients not regime will is nature.

what see in balance. And of consistency that back a time But over lot of is so money forth. and movement you'll a going there's there's lot

have to item majority is we're And bigger the growth recruiting. think that on success that's vast just going to to program I clients. held going in so cash And there overall the And balance the continued to focus by in higher. the to available based access of the drive continued upon the continue

Second item were purposes. was XX% end. the a beta. for beta for on the talking We low pure this the full Again, illustrative about just cycle on

So And of market where the guide. talking NII actual be XX%. deposits. the we'll XXX, the that about to be $XXX see of up But be were - be up going on overall guide to we're beta to end going includes to and we that the at we're a going. going frame competitive, betas beta. and The where our competitive what moving with end could we're day, the We're the XX% on the million trying just NII could impact

Jim Marischen

within modeled impact our Yeah. that [ph] - you've think of beta, on any NII, range which the just I the I any add I actually pretty is mean on Alex, based would well, significant.

Alex Blostein

Makes guys. sense. Yeah. Thanks,

The here, a improving. other power go had is stock question up, comes call, every earnings but the obviously, rough

sub around eight I up Any earnings guys think thoughts buyback? you times this are point. at ramping trading updated the

Ron Kruszewski

when historically stock at will back would these mindful the - in we in We're I and be will these of levels that. to always - result the stock. us pricing historically speaking, levels buy weakness

looking returns. So decrease of at at capital the Obviously, the the way, we it stock by always that look return, increases. utilization we're to price the highest

of not out market. we're So the

Jim Marischen

$XX highlight, I settled a seasonal XQ thing other I million referenced. XQ, impact net there's always shares, We the of and phenomenon. mean I would which of that's a

going continue won't forward. that so And

more market of a probably you'll appetite open terms in so little bit share And see just repurchases.

Alex Blostein

Understood. much. so Thanks

Operator

comes Compass next Allen The Point. Chris Instructions] question [Operator of from line from the

open. is line Your

Chris Allen

guys. for the Morning, Thanks potential moving Maybe in pretty seasonal improvement questions. any quarter? forward cleanup areas the for decent. books, taking some negative about during the Obviously, you just backdrop there and certain my question. In your talked were looks marks trading

result if the quarter? in movements in out markets negative the market there wondering any first Just

Ron Kruszewski

negative marks. There were no

you some took necessarily of look not but first XXXX. the that the I there ago, some a quarter, and gains a of from gains this year trading P&L from were the fluctuation and causing positive that's when some trading losses really perspective, think back quarter warrants we

Jim Marischen

it's year-over-year. not And a but then material well, income terms losses, it's as significant comparative market difficult basis, in been of - been but look fixed on a a

Chris Allen

correctly, if securities-based And If just you obviously volatile Understood. and the here. and recall headwinds outlook could just they the maybe then typically environment. provide in I rates some on color for I see think higher more loans some

So to how there? is component loan about going the you book are growth of thinking drive that

Ron Kruszewski

book. this there use capacity increase And we is of there's vertical activity that's A - there. grow the really lot think balances potential in continue of which by a that quarter. see kind to will lot of we a definitely loan million, modest lot experienced in good of downs to loan going first the I a driven pay and of new led say still just recruiting. to what I generated some But still $XXX be quarter. to that loan growth to

Chris Allen

one me. last the And Understood. for

other sequentially line, Just operating and down looking at the down expense year-over-year.

color any declines? Just was decent There there. pretty

Ron Kruszewski

Total saying? expenses you're

Chris Allen

million expenses, other No, on $XX.X the operating an adjusted basis?

Jim Marischen

have there. you Might in... other segment? you in Are the saying saying Are

Chris Allen

total... The

Jim Marischen

total Obviously, $XX gross And the be decline the probably about down ups to activity, ECM are - you in given about is saw banking gross it's investment going significantly. down banking on investment basis, a million.

And so also a came that year-over-year, when was the kind the biggest the driver bit T&E little first did of there. And in say quarter out. I Omicron the decline would variant obviously,

Apologize. saying that talking and... you factors you so those when were the were segment about thought main the there. I And two are other

Chris Allen

So seeing wasn't the I fluctuation.

Thank So that’s guys. it you. from me

Operator

like further Ron to turn at Kruszewski. the There question no to time. would conference back Mr. this now I

Ron Kruszewski

Well, to over I and look want you. forward for growth we thank us, call. everyone joining we everyone the have seeing years. forward Thank to next on the to our delivering as on Look

Operator

for conference you Thank participating. today's concludes This call.

may now You disconnect.

Stifel Financial (SF) 27 Apr 222022 Q1 Earnings call transcript