Stifel Financial Q4 Earnings Call Highlights

Stifel Financial NYSE: SF used its fourth-quarter 2025 earnings call to highlight a record year for revenue and earnings, fueled by strength in Global Wealth Management and a sharp rebound in investment banking activity. Management also outlined a 2026 outlook that incorporates recent business exits while targeting higher operating leverage.

Record 2025 results and fourth-quarter momentum

Chairman and CEO Ron Kruszewski said 2025 was “another record year” for Stifel, with firm-wide revenue of $5.5 billion, up 11%, marking the first time the company surpassed $5 billion in its 135-year history. He attributed results to “record performance in Global Wealth Management” and the company’s “second-highest year of institutional revenue,” noting the year included bouts of volatility and uncertainty.

CFO Jim Marischen said the fourth quarter capped the year with record quarterly revenue of $1.56 billion, up 14% year-over-year and 9% above the prior quarter’s record. He reported record EPS of $2.63 for the quarter, a pretax margin “of more than 22%,” and return on tangible equity “of more than 31%.”

Wealth management: assets, recruiting, and balance sheet activity

Marischen said Global Wealth Management posted its 23rd consecutive year of record revenue, with 2025 wealth revenues exceeding $3.5 billion. Fourth-quarter wealth revenue was a record $933 million, driven by strength in both transactional and asset management activity.

The firm ended the quarter with record total client assets of $552 billion and record fee-based assets of $225 billion, which management said reflected market appreciation and net new asset growth in the “low to mid single digits.”

Recruiting was a key contributor. Marischen said Stifel added 181 financial advisors in 2025, including 92 experienced advisors with trailing 12-month production of $86 million. Kruszewski said he has seen productivity lift among advisors acquired from B. Riley, attributing it to Stifel’s “platform technology products” and “integrated lending and credit model.”

Balance sheet-related client activity also featured prominently. Marischen said Stifel views itself as “relatively rate agnostic” due to the floating-rate nature of assets and liabilities, with net interest income driven “primarily by client activity and balance sheet expansion rather than changes in interest rates.” For the first quarter of 2026, the company guided net interest income to $275 million to $285 million.

During the quarter, sweep balances increased by $510 million, non-wealth client funding increased by nearly $1.5 billion, and third-party money fund balances rose by more than $1.4 billion. Marischen described the non-wealth funding growth as the strongest quarter in venture-related activity, reflecting momentum from prior investments in that group.

Institutional: investment banking strength and record pipelines

On the institutional side, Marischen said 2025 segment revenue exceeded $1.9 billion, up 20% year-over-year, and the fourth quarter delivered $610 million of revenue, up 28% year-over-year.

Investment banking revenue totaled $456 million in the fourth quarter, up 50% year-over-year. Marischen said advisory revenue rose 46% to $277 million, citing continued strength in financials and “improving traction” in technology and industrials. Equity capital raising revenue was $95 million, double the prior year, led by healthcare, financials, and industrials. Fixed income underwriting reached a record $76 million, up 23%, driven by increased public finance activity and higher corporate issuance. He added Stifel remains the number one negotiated issue manager in public finance by deal count.

Transactional revenue declined 10% year-over-year due to an 18% decline in fixed income revenue, which management said was impacted by the government shutdown and the timing of gains in prior periods.

In Q&A, Kruszewski said activity is broadening beyond financial institutions, pointing to increased momentum in healthcare and improving trends in industrials, technology, telecom, and consumer, along with sponsor activity “noticeably improving.” He also highlighted KBW’s position in depository M&A, saying the subsidiary participated in approximately 75% of depository M&A advisory transactions in 2025 measured by deal volume. Stifel also announced it was representing Stellar in its sale to Prosperity Bancshares.

Capital actions, expense discipline, and 2026 guidance

Management emphasized operating leverage and capital generation. Kruszewski said that excluding a first-quarter legal accrual, Stifel delivered 2025 EPS of $7.92, a pretax margin of 21%, and return on tangible common equity of roughly 25%. Marischen said fourth-quarter compensation expense was 58% of revenue, consistent with the full year, while non-compensation expenses rose 6% year-over-year to $307 million, largely due to investment banking “gross ups” tied to higher advisory and underwriting activity.

Capital ratios improved during the quarter, with the Tier 1 leverage ratio rising to 11.4% and Tier 1 risk-based capital ratio to 18.3%. Based on a 10% Tier 1 leverage target, Marischen said the firm finished the quarter with more than $560 million of excess capital. Stifel repurchased 335,000 shares during the quarter and had 7.6 million shares remaining under its authorization.

Stifel also announced shareholder-focused actions:

• An 11% increase in the common stock dividend beginning in the first quarter of 2026.
• A 3-for-2 stock split effective February 26, 2026, for shareholders of record as of February 12, 2026.

Looking ahead, Kruszewski provided 2026 guidance calling for total net revenue of $6.0 billion to $6.35 billion. He said this outlook reflects the impact of the sale of Stifel Independent Advisors and the closing of the company’s European equities business, which together represented $100 million of annual revenue in the prior year; management expects those revenue impacts to be offset by improved expenses and margins.

For 2026, Stifel guided net interest income of $1.1 billion to $1.2 billion, supported by approximately $4 billion of balance sheet growth. The company also lowered its expense ratio outlook, with a compensation ratio of 56.5% to 57.5% and non-compensation operating ratio of 18% to 20%.

In closing remarks, Kruszewski said client engagement remains high and institutional pipelines are at record levels, adding that the firm’s advisor-led integrated model is helping attract larger teams and win larger transactions as it enters 2026.

About Stifel Financial NYSE: SF

Stifel Financial Corp. is a diversified financial services holding company headquartered in St. Louis, Missouri. Founded in 1890, the firm has grown into a full‐service brokerage and investment banking organization serving individual investors, corporations and institutions. Through its principal subsidiary, Stifel, Nicolaus & Company, Incorporated, the company delivers a broad array of financial products and services backed by research‐driven insights.

The firm’s main business activities are organized into two core segments: Private Client Group and Institutional Group.

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