Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q3 2009 Earnings Presentation
28 slides from Stifel Financial's earnings presentation, Nov 9, 2009
Slide 1: 3rd Quarter 2009 Earnings Conference Call
TIFEL INANCIAL 3rd Quarter 2009 Earnings Conference Call November 9, 2009
Slide 2: Forward-Looking Statements
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 future business
Slide 3: Chairman's Comments
Chairman’s Comments “We are pleased with our quarterly results. Our company is on pace for it’s 14th consecutive year of record net revenues and, despite significant investment in our platform and capabilities, is also on track to post record net income for the year. Our quarterly results were posit
Slide 4: 3rd Quarter 2009 Highlights
rd 3 Quarter 2009 Highlights ¾ Record net revenues of $290 million, a 32% increase from the 3rd Quarter of 2008 (3Q08). ¾ The Global Wealth Management (GWM) segment posted record net revenues of $157 million, a 34% increase from the 3Q08. ¾ The Capital Markets (CM) segment posted record net revenues
Slide 5: YTD 2009 Highlights
YTD 2009 Highlights ¾ Record net revenues of $771 million for the nine months ended September 30, 2009, a 21% increase from the prior-year period. ¾ The GWM segment posted record net revenues of $407 million for the nine months ended September 30, 2009, a 14% increase from the prior-year period. ¾ T
Slide 6: Stifel Financial Corp. Income Statements
Stifel Financial Corp. Income Statements Quarters Ended Change YTD Change ($ in thousands) 09/30/09 09/30/08 $ % 09/30/09 09/30/08 $ % Net revenues $ 289,683 $ 218,923 $ 70,760 32.3% $ 771,169 $ 639,351 $ 131,818 20.6% Compensation and benefits 193,131 150,203 42,928 28.6% 516,852 441,028 75,824 17.
Slide 7: Significant Quarterly Items
Significant Quarterly Items Three Months ended September 30, 2009 ($ in thousands) $ EPS UBS conversion costs $ (2,524) $ (0.04) Duplicate rent (1,946) $ (0.03) Total $ (4,470) $ (0.07) Tax credit $ 3,444 $ 0.10 Net effect $ 0.03 Page 6
Slide 8: Normalized Pro Forma
Normalized Pro Forma Three Months ended September 30, 2009 Pre-Tax Net Operating % of ($ in thousands) Revenues Contributions Net Rev As Reported $ 289,683 $ 30,836 10.6% Pro Forma Adjustments Private Client Group (PCG) PCG De Novo branches (16,408) 2,187 Conversion cost 2,524 Excess ACATs 1,067 Exc
Slide 9: Source of Revenues
Source of Revenues Quarters Ended Change YTD Change % of Net % of Net % of Net % of Net ($ in thousands) Revenues Revenues Revenues Revenues 9/30/2009 9/30/2008 $ % 9/30/2009 9/30/2008 $ % Revenues Principal transactions $ 123,238 42.5% 68,182 31.1% $ 55,056 81% $ 341,777 44.3% 200,793 31.4% $ 140,9
Slide 10: Principal Transactions
Principal Transactions Quarters Ended Change YTD Change ($ in thousands) 9/30/2009 9/30/2008 $ % 9/30/2009 9/30/2008 $ % Principal transactions Taxable debt $ 76,204 $ 39,197 $ 37,007 94% $ 226,190 $ 124,696 $ 101,494 81% Municipal debt 17,943 10,993 6,950 63% 49,859 31,395 18,464 59% Equities 18,27
Slide 11: Income Statements Non-Interest Expenses
Stifel Income Statements Non-Interest Expenses Quarters Ended Change YTD Change % of Net % of Net % of Net % of Net ($ in thousands) Revenues Revenues Revenues Revenues 9/30/2009 9/30/2008 $ % 9/30/2009 9/30/2008 $ % Net revenues $ 289,683 100% $ 218,923 100% $ 70,760 32% $ 771,169 100% $ 639,351 10
Slide 12: Segment Comparison
Segment Comparison ($ in thousands) Quarters Ended Change YTD Change Net revenues: 09/30/09 09/30/08 $ % 09/30/09 09/30/08 $ % Global Wealth Management $ 157,145 $ 117,151 $ 39,994 34% $ 406,619 $ 358,322 $ 48,297 13% Capital Markets 130,179 101,598 28,581 28% 360,787 277,548 83,239 30% Other 2,359
Slide 13: YTD Segment Comparison (Excludes Acquisitions)
YTD Segment Comparison (Excludes Acquisitions) ¾ Balanced business model facilitates growth during volatile markets ¾ Stable GWM business is augmented by profitable and growing Capital Markets. Revenue Operating Profit Cap Cap Cap GWM GWM Mkts Mkts Mkts GWM Cap 42% 53% 44% 43% GWM 47% 56% Mkts 57% 5
Slide 14: Global Wealth Management
Global Wealth Management Income Statements Quarters Ended Change YTD Change ($ in thousands) 9/30/09 9/30/08 $ % 9/30/09 9/30/08 $ % Net revenues $ 157,145 $ 117,151 $ 39,994 34.1% $ 406,619 $ 358,322 $ 48,297 13.5% Compensation and benefits 96,711 71,388 25,323 35.5% 253,169 218,661 34,508 15.8% No
Slide 15: Stifel Bank & Trust Income Statements
Stifel Bank & Trust Income Statements Quarters Ended YTD Flux Flux Flux ($ in thousands) 09/30/09 06/30/09 09/30/08 09/30/09 09/30/08 Revenues Interest 4,962 3,823 30% 4,130 20% 12,395 13,318 -7% Other Revenues 865 1,365 -37% 540 60% 3,284 1,977 66% Total Revenues 5,827 5,188 12% 4,670 25% 15,679 15
Slide 16: Stifel Bank & Trust Balance Sheet
Stifel Bank & Trust Balance Sheet ¾ Assets increased 78% to $966 million as of 9/30/2009 ¾ Investment portfolio increased 126% from $133 million as of 6/30/09 to total $301 million as of 9/30/09 • Purchases since quarter-end increased the portfolio to $492 million • Agency MBS comprise over 74% of t
Slide 17: Capital Markets Income Statement
Capital Markets Income Statement Quarters Ended Change YTD Change ($ in thousands) 9/30/09 9/30/08 $ % 9/30/09 9/30/08 $ % Net revenues $ 130,179 $ 101,598 $ 28,581 28.1% $ 360,787 $ 277,548 $ 83,239 30.0% Compensation and benefits 77,483 62,030 15,453 24.9% 214,251 171,875 42,376 24.7% Non-comp ope
Slide 18: Capital Markets Revenues
Capital Markets Revenues Quarters Ended Change YTD Change ($ in thousands) 9/30/09 9/30/08 $ % 9/30/09 9/30/08 $ % ECM flow business $ 39,733 $ 44,827 $ (5,094) -11% $ 114,598 $ 115,361 $ (763) -1% FICM flow business 58,196 34,050 24,146 71% 174,698 105,399 69,299 66% Total sales & trading 97,929 78
Slide 19: Other Segment Analysis
Other Segment Analysis Quarters Ended Change YTD Change ($ in thousands) 09/30/09 09/30/08 $ % 09/30/09 09/30/08 $ % Net revenue $ 2,359 $ 178 $ 2,181 1225% $ 3,763 $ 3,485 $ 278 8% Compensation and benefits 18,937 10,325 8,612 83% 49,432 31,368 18,064 58% Non-comp operating expenses: Occupancy and
Slide 20: Stifel Financial Balance Sheet Graphs
Stifel Financial Balance Sheet Graphs $2,891 $3,000 $1,000 $916 $83 $2,400 $677 $750 $1,800 $1,499 $1,562 $520 $83 $500 $95 $834 $1,085 $1,200 $842 $225 $290 $595 $166 $600 $423 $412 $382 $250 $115 $135 $70 $425 $35 $70 $220 $35 $35 $131 $155 $80 $100 $0 $0 2002 2003 2004 2005 2006 2007 2008 Q3 2009
Slide 21: Capital Structure
Capital Structure ($ in thousands) Total Assets $ 2,890,795 Stockholders' Equity $ 833,594 Debentures to: Stifel Financial Capital Trust II - LIBOR plus 1.70% (fixed at 6.38% until 9/30/10), due 9/30/35 $ 35,000 Stifel Financial Capital Trust III - LIBOR plus 1.85% (fixed at 6.79% until 6/6/12), due
Slide 22: Level 3 Assets
Level 3 Assets Carrying Value Change ($ in thousands) 9/30/09 12/31/08 Auction Rate Securities $ 55,786 $ 18,509 $ 37,277 Stifel Bank & Trust Investments 11,700 10,423 1,277 Trading Securities 767 4,161 (3,394) Other Investments 5,093 5,169 (76) $ 73,346 $ 38,262 $ 35,084 Percentage of Equity 9% 7%
Slide 23: Other Financial Data
Other Financial Data Quarterly Data % Change vs vs Other Data 9/30/2009 6/30/2009 9/30/2008 Q2 2009 Q3 2008 Bank Assets $ 965,569 $ 532,308 $ 327,279 81% 195% SN & SF Assets 1,925,226 1,755,684 1,714,146 10% 12% Total Assets (000's) $ 2,890,795 $ 2,287,992 $ 2,041,425 26% 42% Stockholders Equity (00
Slide 24: Stifel Outlook
Stifel Outlook ¾ Unstable conditions in the private client market presents opportunity for Stifel to continue to grow organically and through M&A ¾The uncertainty surrounding the largest domestic and European private client platforms impacts thousands of US-based Financial Advisors. ¾Success with UB
Slide 25: Growth
Growth Total As of % YTD Business Units 2004 9/30/2009 Change Additions Firm Net Revenues (millions) . . . . . . . . . . . . . . . . . . . . . . $247 $1,028 * 317% Equity Capital (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . $131 $834 535% Share Price . . . . . . . . . . . . . . . .
Slide 26: ACAT Fee Reimbursement
ACAT Fee Reimbursement Automated Customer Account Transfer System 2009 2008 Reimbursed Reimbursed Qtr No. ACAT Fees No. ACAT Fees Q1 15,857 ($1,384,000) 4,872 ($406,000) Q2 39,151 (3,657,000) 7,708 (653,000) Q3 27,055 (2,454,000) 16,528 (1,386,000) Total 82,063 ($7,495,000) 29,108 ($2,445,000) Page
Slide 27: De Novo Branches
De Novo Branches (1) % of Net % of Net % of Net ($ in thousands) Quarter Revenues YTD Revenues Potential Revenues (2) Revenues $ 16,907 100% $ 36,464 100% $ 110,000 100% Compensation and benefits 10,957 65% $ 24,028 66% $ 66,200 60% Non-compensation expenses 4,148 25% $ 10,703 29% $ 17,800 16% Pre-t
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