Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q3 2011 Earnings Presentation
29 slides from Stifel Financial's earnings presentation, November 2011
Slide 1: Stifel Financial Investor Presentation
Stifel Financial Investor Presentation November 2011
Slide 2: Disclaimer
Disclaimer Table of Contents 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 op
Slide 3: I. Stifel Financial Overview
I. Stifel Financial Overview
Slide 4: Stifel Financial Overview
Stifel Financial Overview Stifel Financial (NYSE: SF) Financial services firm demonstrating growth, scale and stability $1.6 billion market capitalization(1) 2010 Represented 15 years of consecutive record net revenues Balanced business model Top performing financial stock since 12/31/2000
Slide 5: A Growth Story
Stifel Financial Overview A Growth Story… Net Revenues ($MM)(2) Core Net Income ($MM)(2) Total Equity ($MM)(2) $1,500 $1,382 $140 $1,400 $125 $1,254 $1,262 CAGR: 39% CAGR: 43% CAGR: 42% $120 $1,200 $1,200 $1,091 $1,060 $100 $1,000 $87 $873 $870 $900 $80 $73 $76 $763 $67 $800 $593 $600 $60 $600 $452
Slide 6: Building Scale
Stifel Financial Overview Building Scale… Strategic Growth Through Acquisitions Investment Banking Sales and Trading 2005¹ 9/30/2011 Private Client Group (IG) Retail October 2011 Financial Advisors 467 1,961 Brokerage Private Client Branches 94 287 Network Investment Banking Sales an
Slide 7: Strategic Acquisition of Stone & Youngberg
Stifel Financial Overview Strategic Acquisition of Stone & Youngberg, a Premier Public Finance Investment Bank Transaction Stifel acquired 100% of the membership interests of Stone & Youngberg LLC Expands Stifel’s public finance, institutional sales and trading, bond underwriting, particularly i
Slide 8: Stability Achieved Through A Balanced Business Model
Stifel Financial Overview 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 Contribu
Slide 9: Cumulative Price Appreciation
Stifel Financial Overview Cumulative Price Appreciation As of November 25, 2011 Since 12/31/10 Since 12/31/05 Since 12/31/00 SWS Group 3.96% Stifel Financial Corp. 74.96% Stifel Financial Corp. 670.90% S&P 500 Index -7.62% Raymond James Financial 3.61% Raymond James Financial 67.87% Edelman Financia
Slide 10: Third Quarter 2011 Overview
Stifel Financial Overview Third Quarter 2011 Overview Downgrade of the U.S. debt rating by Standard & Poors in August Macroeconomic European sovereign debt issues Headwinds Weak employment and housing data The S&P 500, Nasdaq, Dow and Russell 2000 declined 14%, 13%, 12% and 22%, respectively
Slide 11: II. Global Wealth Management
II. Global Wealth Management
Slide 12: Global Wealth Management
Global Wealth Management Provides Securities Brokerage Services and Stifel Bank Products Overview Grown from 600+ financial advisors in 2005 to over 1,950(1) financial advisors currently Proven organic growth and acquirer of private client business (56 UBS branches, Butler Wick, Ryan Beck) Ret
Slide 13: Opportunity Through Growth
Global Wealth Management Opportunity Through Growth GWM Broker Growth (1) GWM Branch Growth 1,935 1,961 300 285 287 2,000 1,885 272 1,800 250 1,600 1,400 1,315 196 200 1,163 1,200 148 1,000 150 800 735 111 644 92 100 600 400 50 200 0 0 2005 2006 2007 2008 2009 2010 09/30/11 2005 2006 2007 2008 2009
Slide 14: 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 Missouri-chartered commercial bank, in April loans and mortgage loans) within the GWM client base 2007 Built-in source
Slide 15: III. Institutional Group
STIFEL FINANCIAL IIL. Institutional Group
Slide 16: Institutional Group
Institutional Group Overview Net Revenues ($MM)(1) $800 Provides securities brokerage, trading, research, CAGR: 18% (3) $668 underwriting and corporate advisory services $587 $626 $600 $559 $174 $84 One of the largest provider of U.S. Equity Research $455 $197 2nd largest Equity trading platfo
Slide 17: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Stifel Research Highlights Companies Under Coverage (2) Currently cover more than 50% of the S&P 500 Rank Firm Overall Small Cap 1 JPMorgan 1,052 206 Second largest provider of U.S. Small-Cap 2
Slide 18: The Stifel Research Model
Institutional Group – Research The Stifel Research Model The Stifel Research Model Research Accolades >50% of analysts worked in the field they cover Proven, Consistent - Qualitative Results Only firm ranked in the top 12 each year for the last 8 ~35% of analysts initially joined as associates
Slide 19: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 130 person sales force, commission based 40 coverage traders located in Experts in small and mid cap growth and value Baltimore, New York, Boston, Dall
Slide 20: Institutional Group – Fixed Income
Institutional Group – Fixed Income Strong Fixed Income Capital Markets Capabilities Overview Client Distribution Comprehensive platform Approximately 50 traders averaging 14 years of experience Money Other Manager Annual client trade volume approximately $275 7% billion 34% No proprietary tr
Slide 21: Institutional Group – Investment Banking
Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2005 Bookrun Equity Deals Since 2005 ($ in billions) # of $ ($ in billions) # of % $ Rank Firm Deals Volume Rank Firm Deals Bookrun Volume 1 Bank of Ameri
Slide 22: IV. Financial Results
STIFEL FINANCIAL IV. Financial Results
Slide 23: Stifel Financial Corp. Results
Stifel Financial Corp. Results Nine months ended September 30, 2011 Nine Months Ended September 30, 2011 Nine Months Ended 9/30/10 % ($ in thousands, except per share amounts) GAAP Non-core(1) Non-GAAP (Non-GAAP) Change (2) Net revenues $ 1,059,684 $ 112 $ 1,059,796 $ 981,366 8.0% Compensation and b
Slide 24: Sources of Revenues
Sources of Revenues Nine Months Ended % ($ in thousands) 9/30/11 9/30/10 Change Commissions $ 437,344 $ 305,655 43.1% Principal transactions 249,250 363,537 (31.4%) Asset mgt and service fees 172,914 136,117 27.0% Investment banking 143,509 127,129 12.9% Other 11,352 9,358 21.3% Total operating reve
Slide 25: Brokerage Revenues
Brokerage Revenues Nine Months Ended % ($ in thousands) 9/30/11 9/30/10 Change Principal transactions: Taxable debt $ 136,310 $ 185,007 (26.3%) Municipal debt 57,722 56,964 1.3% Equities 26,916 79,343 (66.1%) Other 28,302 42,223 (33.0%) $ 249,250 $ 363,537 (31.4%) Commissions 437,344 305,655 43.1% $
Slide 26: Core Segment Comparison
Core Segment Comparison Nine Months Ended % ($ in thousands) 9/30/11 9/30/10 Change Net revenues: Global Wealth Management $ 683,589 $ 606,845 12.6% Institutional Group 373,168 375,937 (0.7%) Other 3,039 (1,416) nm $ 1,059,796 $ 981,366 8.0% Operating contribution: Global Wealth Management $ 172,510
Slide 27: Statement of Financial Condition
Statement of Financial Condition As of September 30, 2011 Total Assets ($ in Billions) Total Capitalization ($ in Billions) $4.9 $1.5 $5.0 $1.3 $1.3 $0.1 $0.1 $4.2 $1.2 $4.0 $1.0 $3.2 $0.9 $0.1 $3.0 $0.7 $0.6 $0.5 $0.1 $1.3 $1.3 $2.0 $0.1 $1.5 $1.6 $0.9 $0.3 $1.1 $0.3 $0.3 $0.6 $1.0 $0.8 $0.1 $0.4 $
Slide 28: V. Conclusion
STIFEL FINANCIAL
Slide 29: Opportunities Drive our Growth
Opportunities Drive our Growth Stifel is Well-Positioned to Take Advantage of Opportunities Strategic Initiatives Attract and retain high-quality talent Continue building client facing, agency-only businesses Continue to expand private client footprint in the U.S. Continue to expand institut