Nov 5 Stifel Financial Corp said on
Monday its third-quarter profit rose 69 percent from a year ago,
boosted by gains from its retail brokerage business.
The St. Louis-based regional investment bank and brokerage
reported a quarterly net income of $37.7 million, or 60 cents a
share, up from $22.3 million, or 35 cents a share, a year
Excluding a 9 cent-per-share gain from the company's
investment in Knight Capital Group Inc, Stifel earned 51 cents a
share, still above analysts' expectations of 47 cents a share,
based on Thomson Reuters I/B/E/S estimates.
Quarterly net revenue rose 25.7 percent to $420.1 million
from a year earlier, against expectations of $366.5 million.
"Our results highlight the soundness of our balanced
business model, particularly against a challenging economic
backdrop," Chief Executive Ronald Kruszewski said in a
Revenue from Stifel's wealth management division climbed
14.7 percent to $251.7 million, in part from higher transaction
revenues, offset by a decrease in commissions revenue.
Stifel also said on Monday it would buy smaller rival KBW
Inc in a cash-and-stock deal valued at about $575
million, creating a middle-market investment bank focused on the
financial services industry.
The merger will provide investment banking, sales and
trading, and research to financial services companies through
KBW's Keefe, Bruyette & Woods broker-dealer unit.
Stifel has focused primarily on selling stock, bonds and
financial advice to individual investors.
By expanding further into investment banking, as most of
Wall Street is retreating, Stifel is making a bet that mergers
and acquisitions in the middle-market financial space will grow,
said Liz Nesvold, managing partner of Silver Lane Advisors, a
New York-based boutique investment bank.
The company's institutional group net revenue rose 49.8
percent to $169.7 million, including $25.6 million in realized
and unrealized gains from Stifel's investment in Knight Capital
Stifel's financial adviser ranks grew by 81 advisers from
last year, bringing its total to 2,042, while client assets rose
22.8 percent to $136 billion.
The firm has made several big adviser hires since the start
of the year, adding veteran brokers from major brokerages to its
adviser force. Among those new hires were three big teams from
Morgan Stanley Wealth management in Connecticut, Hawaii and
The company's shares rose 2.8 percent to $32.80 on the New
York Stock Exchange late Monday afternoon.