UPDATE 1-Stifel Financial Q4 profit jumps 68 pct

Tue Feb 15, 2011 11:05am EST

* Stifel posts 68 percent rise in Q4 profit

* Q4 EPS of $0.97 vs $0.71 estimate

* Strong revenues in investment banking, brokerage units

By Helen Kearney

NEW YORK, Feb 15 (Reuters) - Stifel Financial Corp (SF.N) reported a 68 percent rise in fourth-quarter profit, beating market expectations, on strong wealth management and investment banking revenue.

The St-Louis based regional brokerage firm on Tuesday reported net income of $41.4 million, or 97 cents per share, compared with a profit of $24.7 million, or 71 cents a share, a year ago. Stifel's shares soared more than 8 percent on the report.

Revenue jumped 26 percent from a year ago, bolstered by the company's July 2010 purchase of investment bank Thomas Weisel Partners, but its quarterly earnings were shaved by 14 cents a share due to merger-related expenses.

Analysts were expecting Stifel to report a profit of 85 cents a share, according to Thomson Reuters I/B/E/S.

"We are seeing the retail and private client investor reengaging," said Chairman and Chief Executive Ron Kruszewski in a conference call with analysts. "We are well-positioned to continue to gain market share."

Stifel, which in 2009 bought 56 Midwestern retail branches with more than 300 advisers from UBS Financial Services (UBSN.VX) (UBS.N), reported a 27 percent jump in wealth management revenue to $237 million during the fourth quarter.

Pre-tax profit for the division was $62.7 million, up 83 percent from a year earlier, thanks in large part to integration of the UBS brokers, Kruszewski said.

The retail unit had a "muted" year of recruiting, adding a net 50 financial advisers in 2010 -- including 15 during the fourth quarter. It ended the year with 1,935 advisers, including 160 at its Century Financial independent brokerage unit, up 3 percent from a year earlier.

Kruszewski, who in 2007 purchased New Jersey-based broker Ryan Beck & Co., said the slow adviser growth reflected Stifel's concentration on the new Weisel business as well as better retention rates at rival brokerages.

"A lot of firms have gotten their act together" following a big exodus in 2009, he said.

Kruszewski laid out a welcome mat for brokers, saying Stifel is eager to fill empty desks at its approximately 300 branches. The branches are at about 70 percent capacity, he said.

Stifel reported quarterly merger-related expenses of $5.9 million related to the Weisel acquisition. Investment banking revenue, spurred by Weisel's technology industry expertise, jumped 80 percent to $81.6 million from a year earlier.

Overall revenues for the company climbed 26 percent jump from a year earlier to $401.6 million.

Shares of Stifel were up 8.4 percent in midmorning trading on the New York Stock Exchange at $71.71.

(Reporting by Helen Kearney, Editing by Jed Horowitz)

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