Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (March 2013)
34 slides from Stifel Financial's investor presentation, March 2013
Slide 1: Stifel Investor Presentation
Stifel Investor Presentation March 2013
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve significant risks, assumptions, and uncertainties, including statements relating to the market opportunity and futu
Slide 3: Market Overview
STIFEL Market Overview
Slide 4: Market Overview
Market Overview Market Indices Equity Mutual Fund Flows ($B) 140 $60 45 120 $40 28 100 $20 80 $0 60 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 ($20) -10 TD -18 40 -22 ($40) 20 ($60) -49 0 -64 -67 ($80) -81 ($100) Dow Russell 2000 S&P 500 Amex B/D Risk Premium Yield 1/3/11 3/31/11 6/30/11
Slide 5: Stifel Overview
STIFEL Stifel Overview
Slide 6: Stifel Overview
Stifel Overview Stifel Financial (NYSE: SF) Financial services firm demonstrating growth, scale and stability $2.0 billion market capitalization(1) 2012 Represented Stifel’s 17th year of consecutive record net revenues Balanced business model Top performing financial stock over the past ten
Slide 7: Strategy: Building the Premier Middle-Market Investment Bank
Strategy: Building the Premier Middle-Market Investment Bank Position Stifel to Take Advantage of Opportunities Unburdened by capital constraints Low leverage business model and conservative risk management Built the Company through 11 acquisitions since 2005; prudently evaluate all opportunit
Slide 8: Stifel's Market Opportunity
Stifel’s Market Opportunity Stifel’s Differentiated Value Proposition: Growth, Scale, and Stability Bulge Bracket Middle Market Size / scale Size / scale Firm focus Large distribution Firm focus Good research Investment Banking Stability (financial & Growth investor access Retail
Slide 9: A Growth Story…
A Growth Story… Net Revenues ($MM)(1) Core Net Income ($MM)(1) Total Equity ($MM)(1) CAGR: 24% CAGR: 23% CAGR: 38% Total Client Assets ($BN)(1)(2) Financial Advisors (1)(3) Book Value Per Share(1)(4) CAGR: 26% CAGR: 19% CAGR: 22% (1) CAGR reflects years 2006 to 2012. (2) Client assets - Includes FDI
Slide 10: Building Scale…
Building Scale… Each merger has been accretive to Stifel Retention remains high Fixed Income Sales and Private Client Revenue production has exceeded Knight Trading – U.S. & Europe 56 UBS Branches expectations Fixed Income Research Fixed Income Announced March 2013 October 2009 FIG Inv
Slide 11: Stability Achieved Through A Balanced Business Model
Stability Achieved Through A Balanced Business Model Balanced business model facilitates growth during volatile markets Stable GWM business is augmented by profitable and growing Institutional Group Proven ability to grow all businesses Net Revenues Operating Contribution 2011 2012 2011 2012 N
Slide 12: Strong Balance Sheet Facilitates Growth
Strong Balance Sheet Facilitates Growth As December 31, 2012 Total Assets ($ in Billions) Total Capitalization ($ in Billions) $7.0 $2.0 $7.0 $2.0 $6.0 $0.4 $5.0 $1.5 $1.4 $0.1 $1.3 $5.0 $0.1 $4.2 $0.1 $4.0 $1.0 $3.2 $1.0 $0.1 $3.0 $0.7 $1.5 $0.5 $0.1 $1.3 $1.3 $2.0 $1.5 $1.6 $0.5 $1.1 $0.3 $0.1 $0.
Slide 13: Top Performing Stock
Top Performing Stock Cumulative Price Appreciation As of March 15, 2013 Since 12/31/12 Since 12/31/07 Since 12/31/00 Evercore Partners 45.38% Evercore Partners 103.67% Stifel Financial Corp. 865.80% Legg Mason 24.22% Stifel Financial Corp. 56.73% Raymond James Financial 208.52% Raymond James Financi
Slide 14: Opportunities Drive our Growth
Opportunities Drive our Growth Initiatives Attract and retain high-quality talent Continue to expand our private client footprint in the U.S. Continue to expand fixed income businesses Continue to expand investment banking capabilities Focus on quality asset generation within Stifel Bank
Slide 15: Merger With KBW
STIFEL Merger With KBW
Slide 16: KBW Merger
KBW Merger Integration Update Closed the merger February 15, 2013 Tom Michaud and Michael Zimmerman joined Stifel’s Board of Directors Key employees remain with the firm Report core vs. non-core going forward as contracts roll off until the integration is complete 16
Slide 17: KBW Merger
KBW Merger (Private Client) (Bank & Trust) (Institutional) Global Wealth Management Middle-Market Experts Financial Institution Experts Private Client Award-winning Research Focused Research Stifel Bank & Trust Institutional Equity & Focused M&A Advisory Fixed Income Brokerage Focused
Slide 18: Global Wealth Management
STIFEL Global Wealth Management
Slide 19: Global Wealth Management
Global Wealth Management Provides Securities Brokerage Services and Stifel Bank Products Overview Grown from 600+ financial advisors in 2005 to over 2,000(1) financial advisors currently Proven organic growth and acquirer of private client business (56 UBS branches, Butler Wick, Ryan Beck) Ret
Slide 20: Global Wealth Management
Global Wealth Management Opportunity Through Growth GWM Broker Growth (1) GWM Branch Growth GWM Account Growth GWM Assets Under Management Growth ($MM) (2) (1) Includes Independent Contractors. (2) Client assets - Includes FDIC-insured products as of 12/31/12 for years 2008-2012. 20
Slide 21: Global Wealth Management – Stifel Bank & Trust
Global Wealth Management – Stifel Bank & Trust Overview Strength of Brokerage Position Acquired FirstService Bank, a St. Louis-based, Offers banking products (securities based loans and Missouri-chartered commercial bank, in April 2007 mortgage loans) within the GWM client base, including establ
Slide 22: Institutional Group
STIFEL Institutional Group
Slide 23: Institutional Group
Institutional Group Overview Net Revenues ($MM)(2)(3) $800 CAGR: 20% (4) Provides securities brokerage, trading, research, underwriting and corporate advisory services $668 $626 $619 $587 $600 $559 Largest providers of U.S. Equity Research $507 $455 2nd largest Equity trading platform in the U
Slide 24: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Stifel Research Highlights Companies Under Coverage Rank Firm Overall Small Cap(2) Largest provider of U.S. equity research 1 Stifel 1,347 538 2nd largest provider of U.S. small cap equity 2 JP
Slide 25: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 110 person sales force, commission based 53 sales traders located in Experts in small and mid cap growth and value Baltimore, New York, Boston, Dallas,
Slide 26: Institutional Group – Fixed Income
Institutional Group – Fixed Income Strong Fixed Income Capital Markets Capabilities Overview Client Distribution (1)(2) Comprehensive platform 89 traders with annual client trade volume approaching $275 billion across all products 26 dedicated fixed income strategists using state- of-the-art p
Slide 27: Investment Banking
Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 Bank of America Merrill Lynch 599 $398.1 1 Ba
Slide 28: Financial Results
STIFEL Financial Results
Slide 29: Stifel Financial Corp. Results
Stifel Financial Corp. Results Three months ended December 31, 2012 Three Months Ended ($ in thousands, except per share amounts) 12/31/12 (1) 12/31/11 % Change 9/30/12 % Change Net revenues $ 417,830 $ 356,878 17.1% $ 420,080 (0.5%) Compensation and benefits 262,213 228,743 14.6% 267,652 (2.0%) Non
Slide 30: Stifel Financial Corp. Results
Stifel Financial Corp. Results Year ended December 31, 2012 Year Ended (1) ($ in thousands, except per share amounts) 12/31/12 12/31/11 % Change Net revenues $ 1,612,650 $ 1,416,562 13.8% Compensation and benefits 1,023,943 900,421 13.7% Non-comp operating expenses 362,835 377,533 (3.9%) Total non-i
Slide 31: Sources of Revenues
Sources of Revenues Quarter Ended Year Ended % % ($ in thousands) 12/31/12 12/31/11 Change 9/30/12 % Change 12/31/12 12/31/11 Change Commissions $ 134,280 $ 123,737 8.5% $ 127,966 4.9% $ 512,976 $ 561,081 (8.6%) Principal transactions 97,708 93,963 4.0% 102,979 (5.1%) 408,484 343,213 19.0% Capital r
Slide 32: Non-Interest Expenses
Non-Interest Expenses Three months ended December 31, 2012 Quarter Ended % of Net revenues ($ in thousands) 12/31/12 12/31/11 % Change 9/30/12 % Change 12/31/12 12/31/11 9/30/12 Compensation and benefits 239,714 210,924 13.6% 247,964 (3.3%) 57.4% 59.1% 59.0% (1) Transitional pay 22,499 17,819 26.3%
Slide 33: Segment Comparison
Segment Comparison Quarter Ended Year Ended % % % ($ in thousands) 12/31/12 12/31/11 Change 9/30/12 Change 12/31/12 12/31/11 Change Net revenues: Global Wealth Management $ 255,084 $ 224,569 13.6% $ 251,728 1.3% $ 995,189 $ 908,158 9.6% Institutional Group (1) 165,056 134,229 23.0% 169,679 (2.7%) 61
Slide 34: 2012 Legacy Business vs. Investments
2012 Legacy Business vs. Investments 2012 Investments include hiring 152 financial advisors and 77 fixed income sales and trading professionals YTD1. ($ in thousands, except per share amounts) 12M2012 2 Legacy Investments Total Net revenues 1,567,133 45,517 1,612,650 Compensation and benefits 981,11
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