Evercore Reports Record First Quarter 2021 Results; Increases Quarterly Dividend to $0.68 Per Share

NEW YORK–(BUSINESS WIRE)–Evercore Inc. (NYSE: EVR):

	First Quarter 2021 Results
	U.S. GAAP					Adjusted
				vs. Q1 2020					vs. Q1 2020
Net Revenues ($ millions)	$	662.3		55%		$	669.9		54%
Operating Income ($ millions)	$	194.2		294%		$	201.8		145%
Net Income Attributable to Evercore Inc. ($ millions)	$	144.4		363%		$	162.5		181%
Diluted Earnings Per Share	$	3.25		339%		$	3.29		172%
Operating Margin	29.3		%	1,778 bps		30.1		%	1,115 bps

Business and Financial Highlights	■	Net Revenues on a U.S. GAAP and an Adjusted basis increased 55% and 54%, respectively, versus the prior year period for a record first quarter by both measures
	■	#1 league table ranking among independents and ranked #6 in the U.S. among all firms for announced M&A volumes over the last twelve months as of quarter-end
	■	Advising on the two largest announced M&A transactions of the first quarter
	■	Sustained ECM momentum generated $79 million in Underwriting Revenue in the first quarter, including the completion of three convertible security offerings and an overall more balanced business completing 39 assignments across six industries during the quarter
	■	U.S. GAAP and Adjusted Operating Margins of 29.3% and 30.1%, respectively
Talent	■	Mark Mahaney joined Evercore ISI as a Senior Managing Director and Head of Internet Research in March
	■	Juan Pedro Pérez Cózar joined Evercore in April as a Senior Managing Director and Head of the Advisory business in Iberia and will focus on advising clients in Spain and Portugal on M&A and capital advisory transactions across a range of sectors
	■	Ongoing investment in ECM business with focus on both further sector and capability expansion and penetration
	■	Pace of dialogue with potential senior level talent additions continues to be strong given the breadth and diversity of Evercore’s platform
Financial Transactions	■	Issued $38 million of Senior Unsecured Notes to refinance existing indebtedness. The new Notes mature on August 1, 2025 and have a 1.97% coupon
Capital Return	■	Quarterly dividend of $0.68 per share increased 11.5%, in-line with our median increase over the past decade
	■	Board approved share repurchase authorization of $750 million
	■	Offset 100% of dilution from annual bonus RSU awards through share repurchases in the first quarter
	■	Returned $275.3 million to shareholders during the quarter through dividends and repurchases of 1.9 million shares at an average price of $121.03

Evercore Inc. (NYSE: EVR) today announced its results for the first quarter ended March 31, 2021.

LEADERSHIP COMMENTARY

John S. Weinberg, Co-Chairman and Co-Chief Executive Officer, “Our first quarter results reflect our team’s intense client focus, the breadth of our business and the favorable environment for M&A and capital raising activity. In Advisory, transactions announced in 2020 amid the recovery in M&A moved towards completion and activity levels remained strong during the quarter. We maintained our #1 league table ranking for announced M&A volumes among independent firms and we are advising on the two largest announced U.S. transactions of the quarter. Our Underwriting business extended its momentum as our breadth of capabilities – including IPOs, follow-ons, convertibles and SPACs – enables us to help our clients implement capital raising strategies that best meet their needs. Our investments in convertibles and SPACs and our expanded sector coverage continue to pay off with a more balanced revenue mix for the business and further opportunities for growth. In Equities, our strong research and sales and trading capabilities continued to serve our institutional clients and our results reflect larger contributions from newer capabilities that we have invested in recently. In summary, our exceptional team continued to serve our clients with distinction by exemplifying our Core Values every day. We are proud of the way our firm is emerging from the pandemic-induced downturn and we will continue to help our clients achieve their strategic, financial and capital needs throughout the recovery and beyond.”

Ralph Schlosstein, Co-Chairman and Co-Chief Executive Officer, “We started the year with a lot of momentum, which translated to the strongest first quarter in our history by many measures. We are delivering for our clients across sectors, geographies and capabilities. We continue to see robust announced M&A volumes and a desire for capital raising, both of which are contributing to our strong backlogs. We are pleased to be returning to our pre-pandemic approach to capital return for our shareholders, including an annual increase to our dividend consistent with historical levels and significant return of capital through share buybacks. In the first quarter, we returned $275.3 million to shareholders through buybacks and payment of dividends. Our balance sheet is strong and we remain committed to returning cash not needed for investment in our business or to fund future compensation obligations to our shareholders through additional share repurchases. In addition to our capital return objectives, we are pleased with our recruiting efforts so far this year. These important hires set the stage for continued growth of our ECM business, expansion of our research coverage and enhancement of our client coverage in Europe – all areas of strategic significance for Evercore. We continue to have active dialogues with talented individuals and we look forward to building out our teams further throughout the year.”

Roger C. Altman, Founder and Senior Chairman, “This first quarter saw Evercore perform exceptionally well amidst very strong, overall global levels of transactions. For many years, clients have responded favorably to our commitments on excellence and integrity, which is why our market share also grew again.”

Selected Financial Data – U.S. GAAP Results:

The following is a discussion of Evercore’s results on a U.S. GAAP basis.

	U.S. GAAP
	Three Months Ended
	March 31, 2021				March 31, 2020				% Change
	(dollars in thousands, except per share data)
Net Revenues	$	662,310			$	427,007			55	%
Operating Income(1)	$	194,208			$	49,303			294	%
Net Income Attributable to Evercore Inc.	$	144,352			$	31,175			363	%
Diluted Earnings Per Share	$	3.25			$	0.74			339	%
Compensation Ratio	59.7		%		63.4		%
Operating Margin	29.3		%		11.5		%
Effective Tax Rate	16.1		%		25.8		%
Trailing Twelve Month Compensation Ratio	59.9		%		60.6		%
Operating Income for the three months ended March 31, 2020 includes Special Charges, Including Business Realignment Costs, of $23.6 million and $0.1 million recognized in the Investment Banking and Investment Management segment, respectively. See “Special Charges, Including Business Realignment Costs” below for further information.

Net Revenues

For the three months ended March 31, 2021, Net Revenues of $662.3 million increased 55% versus the three months ended March 31, 2020, primarily reflecting increases in Advisory Fees and Underwriting Fees of $153.4 million and $58.1 million, respectively, and an increase in Other Revenue, net, primarily driven by a shift from losses of $22.2 million in the first quarter of 2020 to gains of $6.2 million in the first quarter of 2021 on our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. See the Business Line Reporting – Discussion of U.S. GAAP Results below for further information.

Compensation

For the three months ended March 31, 2021, compensation costs of $395.4 million increased 46% versus the three months ended March 31, 2020. For the three months ended March 31, 2021, the compensation ratio was 59.7% versus 63.4% for the three months ended March 31, 2020. The compensation ratio for the three months ended March 31, 2020 was 68.5% when the $22.0 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See “Special Charges, Including Business Realignment Costs” below for further information. The increase in the amount of compensation recognized in the three months ended March 31, 2021 principally reflects higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries. See “Deferred Compensation” for more information. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation Costs

For the three months ended March 31, 2021, Non-Compensation Costs of $72.7 million decreased 13% versus the three months ended March 31, 2020, primarily driven by decreased travel and related expenses, as a substantial number of employees continued to work remotely.

Special Charges, Including Business Realignment Costs

In 2020, the Company completed a review of operations focused on markets, sectors and people which delivered lower levels of productivity in an effort to attain greater flexibility of operations and better position itself for future growth. This review generated reductions of approximately 8% of our headcount.

In conjunction with the employment reductions, the Company incurred separation and transition benefits and related costs of $22.1 million for the three months ended March 31, 2020, which have been recorded as Special Charges, Including Business Realignment Costs, and are excluded from our Adjusted results.

Special Charges, Including Business Realignment Costs, for the three months ended March 31, 2020 also reflect the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives of $1.5 million.

Effective Tax Rate

For the three months ended March 31, 2021, the effective tax rate was 16.1% versus 25.8% for the three months ended March 31, 2020. The effective tax rate is principally impacted by the deduction associated with the appreciation in the Firm’s share price upon vesting of employee share-based awards above the original grant price. The provision for income taxes for the three months ended March 31, 2021 reflects an additional tax benefit of $16.7 million versus $0.6 million for the three months ended March 31, 2020, due to the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price.

Selected Financial Data – Adjusted Results:

The following is a discussion of Evercore’s results on an Adjusted basis. See pages 6 and A-2 to A-10 for further information and reconciliations of these non-GAAP metrics to our U.S. GAAP results.

	Adjusted
	Three Months Ended
	March 31, 2021				March 31, 2020				% Change
	(dollars in thousands, except per share data)
Net Revenues	$	669,904			$	434,977			54	%
Operating Income	$	201,809			$	82,531			145	%
Net Income Attributable to Evercore Inc.	$	162,517			$	57,818			181	%
Diluted Earnings Per Share	$	3.29			$	1.21			172	%
Compensation Ratio	59.0		%		62.0		%
Operating Margin	30.1		%		19.0		%
Effective Tax Rate	17.1		%		24.9		%
Trailing Twelve Month Compensation Ratio	58.4		%		59.0		%

Adjusted Net Revenues

For the three months ended March 31, 2021, Adjusted Net Revenues of $669.9 million increased 54% versus the three months ended March 31, 2020, primarily reflecting increases in Advisory Fees and Underwriting Fees of $153.0 million and $58.1 million, respectively, and an increase in Other Revenue, net, primarily driven by a shift from losses of $22.2 million in the first quarter of 2020 to gains of $6.2 million in the first quarter of 2021 on our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program. See the Business Line Reporting – Discussion of Adjusted Results below for further information.

Adjusted Compensation

For the three months ended March 31, 2021, Adjusted compensation costs of $395.4 million increased 47% versus the three months ended March 31, 2020. For the three months ended March 31, 2021, the Adjusted compensation ratio was 59.0% versus 62.0% for the three months ended March 31, 2020. The increase in the amount of Adjusted compensation recognized in the three months ended March 31, 2021 principally reflects higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries. See “Deferred Compensation” for more information. The Adjusted compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Adjusted Non-Compensation Costs

For the three months ended March 31, 2021, Adjusted Non-Compensation Costs of $72.7 million decreased 12% versus the three months ended March 31, 2020, primarily driven by decreased travel and related expenses, as a substantial number of employees continued to work remotely.

Adjusted Effective Tax Rate

For the three months ended March 31, 2021, the Adjusted effective tax rate was 17.1% versus 24.9% for the three months ended March 31, 2020. The Adjusted effective tax rate is principally impacted by the deduction associated with the appreciation in the Firm’s share price upon vesting of employee share-based awards above the original grant price. The Adjusted provision for income taxes for the three months ended March 31, 2021 reflects an additional tax benefit of $17.7 million versus $0.7 million for the three months ended March 31, 2020, due to the net impact associated with the appreciation in our share price upon vesting of employee share-based awards above the original grant price.

Evercore’s quarterly results may fluctuate significantly due to the timing and amount of transaction fees earned, as well as other factors. Accordingly, financial results in any particular quarter may not be representative of future results over a longer period of time.

Non-GAAP Measures:

Throughout this release certain information is presented on an Adjusted basis, which is a non-GAAP measure. Adjusted results begin with information prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and then those results are adjusted to exclude certain items and reflect the conversion of vested and certain unvested Evercore LP Units into Class A shares. Evercore believes that the disclosed Adjusted measures and any adjustments thereto, when presented in conjunction with comparable U.S. GAAP measures, are useful to investors to compare Evercore’s results across several periods and facilitate an understanding of Evercore’s operating results. Evercore uses these measures to evaluate its operating performance, as well as the performance of individual employees. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP.

Evercore’s Adjusted Net Income Attributable to Evercore Inc. for the three months ended March 31, 2021 was higher than U.S. GAAP as a result of certain business acquisition-related and disposition-related charges.

Acquisition-related charges for 2021 include professional fees incurred.

Evercore’s Adjusted Diluted Shares Outstanding for the three months ended March 31, 2021 were higher than U.S. GAAP, as a result of the inclusion of certain Evercore LP Units.

Further details of these adjustments, as well as an explanation of similar amounts for the three months ended March 31, 2020 are included in Annex I, pages A-2 to A-10.

Reclassifications:

Certain balances in the prior period were reclassified to conform to their current presentation in this release. “Commissions and Related Fees” has been renamed to “Commissions and Related Revenue” and principal trading gains and losses from our institutional equities business have been reclassified from “Other Revenue, Including Interest and Investments” to “Commissions and Related Revenue.” For the three months ended March 31, 2020, this resulted in a reclassification of $185 thousand from “Other Revenue, Including Interest and Investments” to “Commissions and Related Revenue.” There was no impact on U.S. GAAP or Adjusted Net Revenues, Operating Income, Net Income or Earnings Per Share.

The prior period reclassifications from “Other Revenue, Including Interest and Investments” to “Commissions and Related Revenue” are as follows: Q1 2020: $185 thousand; Q2 2020: $215 thousand; Q3 2020: $150 thousand; Q4 2020: $375 thousand; Q1 2019: ($2) thousand; Q2 2019: $25 thousand; Q3 2019: $320 thousand; Q4 2019: $249 thousand.

Business Line Reporting – Discussion of U.S. GAAP Results

The following is a discussion of Evercore’s segment results on a U.S. GAAP basis.

Investment Banking

	U.S. GAAP
	Three Months Ended
	March 31, 2021				March 31, 2020				% Change
	(dollars in thousands)
Net Revenues:
Investment Banking:
Advisory Fees	$	511,918			$	358,564			43	%
Underwriting Fees	79,257				21,118				275	%
Commissions and Related Revenue	53,526				55,566				(4	%)
Other Revenue, net	2,584				(21,592)				NM
Net Revenues	647,285				413,656				56	%
Expenses:
Employee Compensation and Benefits	386,682				261,991				48	%
Non-Compensation Costs	69,851				79,386				(12	%)
Special Charges, Including Business Realignment Costs	—				23,644				NM
Total Expenses	456,533				365,021				25	%
Operating Income	$	190,752			$	48,635			292	%
Compensation Ratio	59.7		%		63.3		%
Non-Compensation Ratio	10.8		%		19.2		%
Operating Margin	29.5		%		11.8		%
Total Number of Fees from Advisory Client Transactions(1)	248				222				12	%
Investment Banking Fees of at Least $1 million from Advisory Client Transactions(1)	103				73				41	%
Total Number of Underwriting Transactions	39				12				225	%
Total Number of Underwriting Transactions as a Bookrunner	31				8				288	%
Includes Advisory and Underwriting Transactions.

Revenues

During the three months ended March 31, 2021, fees from Advisory services increased $153.4 million, or 43%, versus the three months ended March 31, 2020, reflecting an increase in the number of Advisory fees earned and an increase in revenue earned from large transactions. Underwriting Fees of $79.3 million for the three months ended March 31, 2021 increased $58.1 million, or 275%, versus the three months ended March 31, 2020, reflecting an increase in the number of transactions we participated in, as well as the relative size of our participation in those transactions. Commissions and Related Revenue for the three months ended March 31, 2021 decreased 4% versus the three months ended March 31, 2020.

Other Revenue, net, for the three months ended March 31, 2021 increased versus the three months ended March 31, 2020, primarily reflecting a shift from losses of $22.2 million in the first quarter of 2020 to gains of $6.2 million in the first quarter of 2021 on our investment funds portfolio, which is used as an economic hedge against our deferred cash compensation program.

Expenses

Compensation costs were $386.7 million for the three months ended March 31, 2021, an increase of 48% from the first quarter of last year. The compensation ratio was 59.7% for the three months ended March 31, 2021, compared to 63.3% for the three months ended March 31, 2020. The compensation ratio for the three months ended March 31, 2020 was 68.6% when the $21.9 million of separation and transition benefits expense, which is presented within Special Charges, Including Business Realignment Costs, is also included. See page 4 for further information. The increase in the amount of compensation recognized in the three months ended March 31, 2021 principally reflects higher levels of incentive compensation, higher amortization of prior period deferred compensation awards and higher base salaries. See “Deferred Compensation” for more information. The compensation ratio in any given period is subject to fluctuation based, in part, on the amount of revenue earned in that period.

Non-Compensation Costs for the three months ended March 31, 2021 were $69.9 million, a decrease of 12% compared to the first quarter of last year. The decrease in Non-Compensation Costs from last year primarily reflects decreased travel and related expenses, as a substantial number of employees continued to work remotely. The ratio of Non-Compensation Costs to Net Revenues for the three months ended March 31, 2021 of 10.8% decreased from 19.2% for the first quarter of last year.

Special Charges, Including Business Realignment Costs, for the three months ended March 31, 2020 reflect $22.1 million for separation and transition benefits and related costs as a result of the Company’s review of its operations and the acceleration of depreciation expense for leasehold improvements and certain other fixed assets in conjunction with the previously announced expansion of our headquarters in New York and our business realignment initiatives of $1.5 million. See page 4 for further information.

Investment Management

	U.S. GAAP
	Three Months Ended
	March 31, 2021				March 31, 2020				% Change
					(dollars in thousands)
Net Revenues:
Asset Management and Administration Fees	$	14,949			$	12,747			17	%
Other Revenue, net	76				604				(87	%)
Net Revenues	15,025				13,351				13	%
Expenses:
Employee Compensation and Benefits	8,708				8,751				—	%
Non-Compensation Costs	2,861				3,900				(27	%)
Special Charges, Including Business Realignment Costs	—				32				NM
Total Expenses	11,569				12,683				(9	%)
Operating Income	$	3,456			$	668			417	%
Compensation Ratio	58.0		%		65.5		%
Non-Compensation Ratio	19.0		%		29.2		%
Operating Margin	23.0		%		5.0		%
Assets Under Management (in millions)(1)
Wealth Management(2)	$	10,555			$	8,273			28	%
Institutional Asset Management	—				1,250				NM
Total Assets Under Management	$	10,555			$	9,523			11	%
Assets Under Management reflect end of period amounts from our consolidated subsidiaries. Assets Under Management includes Evercore assets which are managed by Evercore Wealth Management of $76.4 million and $321.2 million as of March 31, 2021 and 2020, respectively.

Revenues

	U.S. GAAP
	Three Months Ended
	March 31, 2021				March 31, 2020				% Change
	(dollars in thousands)
Asset Management and Administration Fees:
Wealth Management	$	14,949			$	12,328			21	%
Institutional Asset Management	—				419				NM
Total Asset Management and Administration Fees	$	14,949			$	12,747			17	%

Our historical Investment Management results include the following businesses, which were previously included in Institutional Asset Management above. These businesses were deconsolidated in 2020:

• On July 2, 2020, we sold the trust business of Evercore Casa de Bolsa, S.A. de C.V. (“ECB”).
• On December 16, 2020, we sold the remaining ECB business to certain former employees.

Following these transactions, there are no remaining consolidated businesses in Institutional Asset Management.

Asset Management and Administration Fees of $14.9 million for the three months ended March 31, 2021 increased 17% compared to the first quarter of last year, driven by an increase in fees from Wealth Management clients, which increased 21% compared to the first quarter of last year, as associated AUM increased 28%.

Other Revenue, net, which includes income from our legacy private equity investments, decreased 87% versus the three months ended March 31, 2020.

Expenses

Investment Management’s expenses for the three months ended March 31, 2021 were $11.6 million, a decrease of 9% compared to the first quarter of last year, primarily due to a decrease in Non-Compensation Costs.

Contacts

Investor Contact:
Hallie Miller

Head of Investor Relations, Evercore

917-386-7856

Media Contact:

Dana Gorman

Abernathy MacGregor, for Evercore

212-371-5999

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