April 29, 2010

Stifel Shares Q1 Growth Report on Heels of Merger News

Stifel's wealth-management operations are poised to include 1,900 financial advisors and $100 billion in assets under management after its merger with Thomas Weisel Partners is completed.

St. Louis-based Stifel Financial (SF) says it had unaudited quarterly net income of $23.7 million on net revenues of $312.0 million for the quarter ended March 31, 2010, vs. $13.2 million of net income on net revenues of $220.0 million in the same year-ago period.

It missed analysts' earnings estimates for the quarter, of 69 cents a share, by 1 cent - but its shares traded up about one percent on April 29.

The firm announced April 26 that it was buying Thomas Weisel Partners (TWPG) of San Francisco.

Post-merger, Stifel says, it will include some 1,900 financial advisors and $100 billion in assets under management.

Last year, Stifel bought 56 branches from UBS.

"Our global wealth management segment, with the addition of the UBS branches, had record quarterly results. The most encouraging sign is that its performance is up sequentially over the record 2009 fourth quarter," said Chairman and CEO Ronald J. Kruszewski in a press release.

"I am confident that with the recent announcement of our strategic merger with Thomas Weisel Partners, we can build a premier middle-market investment bank and continue the growth of our core business, increase our market share and add value for our shareholders," he added.

In wealth management, Stifel's net revenues were $197.2 million in the first quarter of 2010, an increase of 73% and 7% over the first quarter of 2009 and the fourth quarter of 2009, respectively. The private-client operations had net revenues of $187.4 million, a 70% increase over the first quarter of 2009 and a 6% increase over the fourth quarter of 2009.

Asset management and service fees revenue increased 56% over the first quarter of 2009 and increased 3% over the fourth quarter of 2009.

In the first quarter, Stifel says it added 6 private-client offices and 46 financial advisors as part of its "ongoing footprint expansion efforts."

Thomas Weisel Partners Group says it had a net loss of $5.3 million in the first quarter of 2010 compared with a net loss of $23.9 million in the same year-ago period. Total net revenues increased 21% to $52.2

million for the first quarter of 2010 versus $43.1 million for the first quarter of 2009.

"Our backlog continues to build, increasing significantly to 19 IPOs on file compared with six at the beginning of the year. The majority of these IPOs are expected to price in the second and third quarters of 2010 ...," said Chairman and CEO Thomas W. Weisel.

"We are extremely pleased to have announced earlier this week our strategic merger with Stifel Financial," he said.

Thomas Weisel's latest results include brokerage revenues of $21.5 million, asset management revenue of $4.0 million.

The two firms expect the merger to close by June 30.

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