Stifel(US:SF)2023-01-28 00:03Financial Data and Key Metrics Changes - Stifel reported total revenues of $4.4 billion for 2022, with earnings per share of $5.74, marking a 6% increase in book value and a 9% increase in tangible book value [6][7][46] - The company achieved a return-on-tangible common equity of 22% [5][46] - Net revenue increased by 86% since 2015, with net interest income rising nearly 600% and advisory revenue up 300% [8] Business Line Data and Key Metrics Changes - Global Wealth Management revenue increased by 10% to a record $744 million, with pretax margins rising by 810 basis points to 43% [18] - Institutional Group revenue for the quarter was $354 million, with full-year institutional revenue exceeding $1.5 billion [19] - Investment banking revenue totaled $224 million in Q4, with a total of $971 million for the year, marking the second strongest year ever despite a challenging market [19][46] Market Data and Key Metrics Changes - The S&P 500 experienced a 19% decline in 2022, impacting capital raising and strategic activity [25] - Stifel's market share for negotiated transactions increased to 15.3% in 2022, outperforming competitors by 710 basis points [20] Company Strategy and Development Direction - Stifel aims to reach $1 trillion in total client assets through strong recruiting and market appreciation, with a focus on long-term growth [10][12] - The company plans to continue reinvesting in its business while also returning capital to shareholders through dividends and share repurchases [14][46] - Stifel's strategy includes expanding its Wealth Management segment, which is expected to comprise a greater percentage of revenue in the future [12][104] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment in 2022 due to inflation and geopolitical turmoil but expressed optimism for 2023, particularly in the Global Wealth segment [25][75] - The company anticipates further growth in net interest income and a strong recruiting pipeline, which will contribute to net new asset growth [75][67] Other Important Information - The Board of Directors approved a 20% increase in the common dividend, raising it to $1.44 annually [7] - Stifel repurchased approximately 1.3 million shares for about $75 million during the quarter, with 8.7 million shares remaining on the current repurchase authorization [14] Q&A Session Summary Question: What are the underlying assumptions for investment banking revenue guidance in 2023? - Management indicated that guidance is based on consensus estimates, assuming a similar environment to 2022, with capital raising expected to improve while advisory fees may decline [51][52] Question: What are the biggest drivers or opportunities for Stifel in the coming years? - Management highlighted a strong recruiting pipeline and the potential for accretive acquisitions as key growth drivers [55] Question: How does the company plan to balance growth capital allocation between Wealth Management and Institutional? - Management emphasized a focus on Wealth Management while remaining opportunistic in the Institutional space, particularly in middle-market opportunities [141][104] Question: What is the outlook for share repurchases and capital management? - Management stated that while they have significant excess capital, decisions on buybacks will depend on market conditions and other opportunities [115][118]