Stifel Financial Corp. Q4 FY2025 earnings call

• 2025 was a record year for Stifel with firm-wide revenue of $5.5 billion, up 11%, surpassing $5 billion for the first time. - Record performance in Global Wealth Management and second-highest institutional revenue drove results. - J.D. Power ranked Stifel number one in employee adviser satisfaction for the third consecutive year, and 2025 was the strongest financial adviser recruiting year since 2018. - KBW subsidiary participated in approximately 75% of depository M&A advisory transactions in 2025. - Balance sheet supports clients but is not a separate business line. - Excluding first quarter legal accrual, EPS was $7.92, pretax margin 21%, return on tangible common equity ~25%. - Continued investing in the business, growing the adviser-led client-serving platform, acquiring Brian Garnier and the employee wealth business from B. Riley, and repurchasing shares.

Global Wealth Management: 2025 total revenues exceeded $3.5 billion, driven by record asset management and transactional revenue, and second-highest net interest income. Fourth quarter revenue was a record $933 million. Institutional: 2025 revenues nearly doubled over ten years to $1.9 billion. Fourth quarter revenue was $610 million, up 28% year over year, with investment banking revenue up 50% year over year. Global Wealth Management contributed significantly to the firm's earnings, capital generation, and long-term growth, while Institutional provided meaningful upside as market conditions improved.

• Total net revenue expected to be in the range of $6 billion to $6.35 billion. - Net interest income forecasted to be between $1.1 billion and $1.2 billion, supported by approximately $4 billion of balance sheet growth. - Compensation ratio in the range of 56.5% to 57.5%. - Non-compensation operating ratio 18% to 20%. - The guidance reflects the impact of the sale of Stifel Independent Advisors and the closing of the European equities business, which totaled $100 million in annual revenue.

• Market volatility, geopolitical risk, and policy uncertainty. - Potential impact of interest rate changes on net interest income. - Competition for talent affecting compensation and productivity. - Uncertainty in private credit markets and their impact on the portfolio.

Q: Mike Brown asked about factors shaping recruitment in 2026, update on high net worth adviser recruitment, and productivity expansion from experienced advisers.

A: Ronald James Kruszewski said noticed productivity increase in B. Riley advisers due to platform technology, recruiting past is prologue, and past recruitment trends show teams bringing broad mix of business.

Q: Steven Chubak inquired about ECM outlook, share strength, and confidence in ECM fees continuing.

A: Ronald James Kruszewski and James Marischen discussed gaining market share in ECM deals, past ECM fees, and confidence in continued growth due to increased participation levels.

Q: Devin Ryan asked about adviser mix equilibrium and net interest income guide.

A: Ronald James Kruszewski talked about remixing of advisers with slowing independent channel trends, and James Marischen discussed net interest income guide, balance sheet growth mix, and liability side assumptions.

Q: Brennan Hawken asked about C&I loan growth, asset beta, and private credit markets.

A: James Marischen discussed loan growth drivers, asset beta considerations, and positive trends in private credit markets with high quality and subordination.

Q: Bill Katz asked about strategic use of capital, margin from SIA repositioning, and client cash dynamics.

A: Ronald James Kruszewski spoke about conservative approach to capital use, margin considerations from SIA and European operations, and James Marischen discussed client cash dynamics and deposit growth.

Q: Michael Cho asked about bank M&A runway and wealth side recruitment.

A: Ronald James Kruszewski talked about bank M&A consolidation trends and potential for increased recruitment allocation, and Michael Cho's questions were addressed on bank M&A and wealth recruitment expansion.

Q: Alex Blostein asked about expense outlook.

A: James Marischen discussed the expense guide, including adjustments from SIA sale and European reorg, and the impact on margins.