What Stifel Financial (SF) Said on Its Q3 Earnings Call

Key Points

• Stifel reported record third-quarter EPS of $1.46, up 12% year over year, on $1.43 billion in net revenue. Management said the firm remains on track for another record year, with year-to-date revenue up 9% and EPS up 57%.
• Global Wealth Management reached record revenue of $980 million, supported by higher asset-management revenue, net interest income and growth in client assets and fee-based assets. Loan growth also lifted net interest income to $302 million, above guidance.
• Institutional revenue fell 14% to $430 million as market volatility and September rate moves hurt transactional revenue, though advisory revenue improved sequentially. Stifel expects fourth-quarter revenue to match the prior-year record and EPS to exceed the year-earlier period.

Stifel Financial NYSE: SF reported third-quarter results that included record earnings per share for the period, supported by growth in its Global Wealth Management business, higher net interest income and expense discipline that offset weaker transactional revenue in its institutional segment.

Chairman and Chief Executive Officer Ron Kruszewski said the firm remains on track for another record year. Through the first nine months of 2026, Stifel generated revenue of $4.3 billion, up 9% from a year earlier, while earnings per share rose 57% to $4.33. Excluding the impact of a legal charge recorded in the prior year, year-to-date EPS increased 22%, he said.

For the third quarter, Stifel posted non-GAAP earnings per share of $1.46, up 12% year over year, on net revenue of $1.43 billion. The company’s pre-tax margin was 22.5%, while its compensation ratio declined to 56.6%, the lowest level since the fourth quarter of 2022.

Wealth Management Sets Revenue Record

Global Wealth Management generated record net revenue of $980 million in the third quarter, up 8% from the prior-year period. Chief Financial Officer Jim Marischen said the performance reflected record asset-management revenue and a record third-quarter contribution from net interest income, partly offset by lower transactional revenue.

Stifel ended the quarter with $576 billion in total client assets and $240 billion in fee-based assets, increases of 6% and 9%, respectively. Excluding assets associated with SIA, total client assets increased 8% and fee-based assets rose 12%, aided by equity-market appreciation and net new asset growth.

Net flows were slightly negative during the quarter, though management said advisor recruiting remained a source of confidence. Over the past 12 months, the firm added 90 advisors, including 28 experienced advisors with $19 million of trailing production.

Kruszewski said Stifel is focusing on recruiting larger teams rather than expanding the absolute number of advisors it engages with. He described the recruiting market as highly competitive but said the company has continued to achieve net positive recruitment over time.

“We’re a firm that we have net positive recruiting and we’ll continue to do so,” Kruszewski said. “I’m optimistic about who we’re talking to.”

Loan Growth Lifts Net Interest Income

Stifel increased loans by $1.3 billion in the third quarter, including nearly $1 billion in incremental fund-banking loans and more than $200 million in residential mortgages. For the year to date, the loan book has expanded by roughly $3.6 billion, approaching the company’s full-year target of $4 billion.

Net interest income reached $302 million, above the high end of the company’s guidance and near its highest quarterly level, Marischen said. The result was driven by loan growth and higher loan-fee income. Stifel expects fourth-quarter net interest income of $295 million to $305 million.

The company said its net interest margin has remained relatively stable as its balance sheet has grown. Stifel cited approximately $2.9 billion of deposits held off balance sheet, roughly $18 billion in money-market funds and $7 billion in short-term Treasuries as potential sources to support additional funding needs.

Stifel also disclosed a strategic investment in Meow Technologies and a long-term licensing agreement that will provide the firm access to the fintech company’s current and future platform capabilities. Kruszewski said the arrangement will support a white-label treasury-management platform for venture-fund banking and commercial clients.

Management said the technology investment is intended to accelerate Stifel’s venture and fund banking platform, broaden capabilities for institutional and wealth clients, and help generate deposits without adding branches or physical infrastructure.

Institutional Results Pressured by September Market Moves

Institutional revenue totaled $430 million in the third quarter, down 14% from a year earlier. Investment banking revenue was $300 million, down 6%, though advisory revenue rose 10% sequentially to $173 million, supported by activity in financials, industrials, consumer and healthcare.

Equity capital-raising revenue was $69 million, down 13% year over year, while fixed-income underwriting revenue of $58 million was in line with the prior-year quarter. Stifel said higher rates weighed on new-issue volume during the quarter, although fourth-quarter activity had begun strongly.

Fixed-income transactional revenue fell to $80 million from approximately $123 million a year earlier. Marischen attributed the decline partly to $9 million in trading marks resulting from sharp interest-rate moves in September, as well as $32 million in restructuring and aircraft gains recorded in the prior-year period. Equity transactional revenue declined to $41 million from $59 million, reflecting the company’s European restructuring, lower equity volumes and about $7 million of marks on equity facilitation inventory.

Absent another rate move similar to September’s, Stifel expects fourth-quarter institutional transactional revenue in a range of $145 million to $150 million. The company’s institutional pre-tax margin for the first nine months of the year was 18.9%, up 530 basis points from the year-earlier period, reflecting lower compensation and non-compensation ratios following the international restructuring.

Capital Deployment and Fourth-Quarter Outlook

Stifel repurchased 1.6 million shares during the quarter and had 6.2 million shares remaining under its current authorization. Its Tier 1 leverage ratio was 10.8%, and management estimated excess capital of nearly $360 million based on a 10% leverage target, after loan growth and buybacks.

Kruszewski said the company expects to match its record fourth-quarter 2025 revenue of $1.56 billion, despite market volatility that slowed what he characterized as a strong investment-banking environment earlier in the year. He also expects fourth-quarter earnings per share to exceed the prior-year period, citing cost discipline and the effect of 6.8 million shares repurchased.

Management said it remains mindful of geopolitical risks, higher interest rates, energy prices and elevated asset valuations. Still, Kruszewski pointed to wealth-management fundamentals, client engagement, investment-banking backlogs and sponsor-led transaction activity as reasons for confidence heading into the final quarter.

About Stifel Financial (NYSE:SF)

Stifel Financial Corp. is a financial services holding company headquartered in St. Louis, Missouri. Through its principal operating subsidiaries, including Stifel, Nicolaus & Company, Incorporated, the company provides wealth management, investment banking, securities brokerage and related financial services to individual investors, corporations, municipalities and institutional clients.

Its wealth management business offers investment advice, brokerage services, financial planning, banking and lending solutions, and access to a range of investment products.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.