Stifel Financial Corp. (NYSE:SF) Q2 2023 Results Conference Call July 26, 2023 9:30 AM ET

Company Participants

Joel Jeffrey - Senior Vice President Investor Relations

Ron Kruszewski - Chairman and CEO

Victor Nesi - Co-President

Jim Zemlyak - Co-President

Jim Marischen - CFO

Conference Call Participants

Steven Chubak - Wolfe Research

Devin Ryan - JMP Securities

Brennan Hawken - UBS

Alex Blostein - Goldman Sachs

Chris Allen - Citi

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'd like to turn the conference over to Joel Jeffrey. Please go ahead.

Joel Jeffrey

Thank you, operator. I'd like to welcome everyone to Stifel Financial's second quarter 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 Web site, 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 Corp and may not be duplicated, reproduced or rebroadcast without consent of Stifel Financial.

I will now turn the call over to our Chairman and CEO, Ron Kruszewski.

Ron Kruszewski

Thanks, Joel. To our guests, good morning, and thank you for taking the time to listen to our second quarter conference call. We recorded solid results in the second quarter as strength in wealth management was offset by the industry wide slowness in our institutional business. I don't want be repetitive, but as I've said, it is important to point out that over the years Stifel business model has proven its ability to navigate these types of markets and still generate solid returns. Simply put, wealth management is consistent and provides balance to the cyclical institutional business and the institutional business could be at cyclical loss. Overall, revenue came in at a little over $1.05 billion with non-GAAP EPS of $1.20. Despite a challenging environment, we generated pretax margin of 19% and return on tangible common equity of 17%. And we had some positive developments in the quarter worth highlighting. First, J.D. Power ranked Stifel number one in its annual employee advisor satisfaction survey. We also generated our 10th consecutive record revenue quarter in global wealth management. Recruiting was strong in the quarter and we're seeing further signs of improvement in the third quarter. Capital raising revenue was its highest since the fourth quarter of 2021 and book value and tangible book value per share increased 6%.