2024-07-24 14:49:07 ET
Stifel Financial Corp. (SF)
Q2 2024 Earnings Conference Call
July 24, 2024 09:30 am ET
Company Participants
Joel Jeffrey - Senior Vice President and Head of Investor Relations
Ron Kruszewski - Chairman and CEO
Victor Nesi - Co-President and Institutional Group Head
Jim Zemlyak - Co-President
Jim Marischen - CFO
Conference Call Participants
Devin Ryan - Citizens JMP
Steven Chubak - Wolfe Research
Alexander Blostein - Goldman Sachs
William Katz - TD Cowen
Brennan Hawken - UBS
Christopher Allen - Citi
Presentation
Operator
Good day, and welcome to the Stifel Financial Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Joel Jeffrey, Head of Investor Relations. Please go ahead.
Joel Jeffrey
Thank you, operator. I'd like to welcome everyone to Stifel Financial's second quarter 2024 conference call. I'm joined on the call today by our Chairman and CEO, Ron Kruszewski; our Co-Presidents, Victor Nesi and Jim Zemlyak; and our CFO, Jim Marischen.
Earlier this morning, we issued an earnings release and posted a slide deck and financial supplement to our website, which can be found on the Investor Relations page at www.stifel.com. I would note that some of the numbers that we state throughout our presentation are presented on a non-GAAP basis, and I would refer to our reconciliation of GAAP to non-GAAP as disclosed in our press release. I would also remind listeners to refer to our earnings release, financial supplement and our slide presentation for information on forward-looking statements and non-GAAP measures. This audio cast is copyrighted material of Stifel Financial and may not be duplicated, reproduced or rebroadcast without the consent of Stifel Financial.
I will now turn the call over to our Chairman and CEO, Ron Kruszewski. Ron?
Ron Kruszewski
Thanks, Joel. Good morning. Thanks to everyone for taking the time to listen to our second quarter 2024 earnings conference call. I'm pleased to be with my partners here this morning in New York and look forward to seeing them as well. Stifel's strong results in the second quarter reflected our operating leverage as market conditions improved, particularly in our Institutional business. Stifel's second quarter net revenue totaled $1.22 billion, up 16% from 2023 and represents the second best quarter in our history. All revenue line items showed improvement, except for our predicted decline in net interest income. Commissions and principal transactions increased 24% as a result of stronger client activity levels in both Wealth Management and our Institutional Growth.
Investment Banking increased 40% as advisory revenue was up 50% and capital raising growth of 29%. Record asset management revenue was up 19%, reflecting organic growth and market appreciation. Net interest income declined $40 million or 14%. However, although NII decreased both quarterly and the first -- both quarterly and in the first half of the year, the declines were within our guidance. The efficiency of our diversified business model is illustrated by our second quarter pretax margin of 21%, operating earnings per share of $1.60, which was a 33% increase from the prior year, as well as an annualized return on tangible common equity of 22%. We generated record first half net revenue of nearly $2.4 billion, an increase of 10% as improving institutional revenue more than offset the predicted decline in NII....
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Stifel Financial Corp. (SF) Q2 2024 Earnings Call Transcript