Stifel posts fourth-quarter profit, boosted by brokerage

Mon Feb 25, 2013 4:57pm EST

(Reuters) - Stifel Financial Corp (SF.N) said on Monday its fourth-quarter profit rose 48 percent from a year ago, driven by gains in the company's wealth management business and institutional group.

The St. Louis-based regional investment bank and brokerage reported quarterly net income of $40 million, or 63 cents a share, up from $27 million, or 43 cents a share, a year earlier.

Excluding a 2 cent-per-share gain from the company's investment in Knight Capital Group Inc, Stifel earned 61 cents a share, above analysts' expectations of 60 cents a share, based on Thomson Reuters I/B/E/S estimates.

Quarterly net revenue rose 17 percent to $417.8 million from a year earlier, below Wall Street expectations of $418.4 million.

Net revenue from Stifel's wealth management division climbed 13.6 percent to $255 million, lifted by growth in Stifel's asset management and services fees as a result of an increase in client assets.

The company's institutional group net revenue rose 23 percent to $165.1 million, including gains from the company's investment in Knight Capital.

Stifel's financial adviser ranks were relatively unchanged from the prior quarter, with a total 2,041 advisers at the end of 2012. Client assets rose 12.6 percent to $137.9 billion.

Stifel earlier this month completed its merger with smaller rival KBW Inc KBW.N in which the company paid about $575 million in cash and stock for New York-based KBW.

By expanding further into investment banking, while most of Wall Street is moving away from the business, Stifel is also making a bet that mergers and acquisitions in the middle-market financial space will help drive profit for the company.

For Stifel, which has focused primarily on selling stock, bonds and financial advice to individual investors, the acquisition may also add to product offerings for its best brokerage clients.

(Reporting By Ashley Lau in New York; Editing by Bernard Orr)

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