Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (June 2017)
38 slides from Stifel Financial's investor presentation, June 2017
Slide 1: Investor Presentation June 2017
Investor Presentation June 2017
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: Our Strategy
Our Strategy STIFEL
Slide 4: Strategic Vision
Strategic Vision To build a premier wealth management and investment banking firm Global Wealth Management Institutional Private Asset Bank Equities Fixed Investment Research Client Management Sales + Income Banking Trading Sales + Trading 2,299 financial $27B in total $13B in assets Experienced Com
Slide 5: A History of Growth
A History of Growth 2015 2016 2017 Barclays Wealth & Investment Eaton Partners City Securities Management, ISM Capital Sterne Agee, 2014 Sidoti Joint Venture, De La Rosa, Leumi Partners Collaboration Oriel Securities, Agreement 1919 Investment Counsel, Merchant Capital 2013 Acacia Bank & Ziegler 201
Slide 6: Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Driving Shareholder Value Through Deal Integration & Balance Sheet Growth 6
Slide 7: Balance Sheet Growth
Balance Sheet Growth $21,000 $19,129 $19,136 $20,000 $17,205 $15,386 $15,000 Infrastructure $14,214 $13,326 Build Total Assets in Millions $9,518 $9,359 $10,000 $9,009 $6,966 $4,952 $5,000 $4,213 $3,167 $1,558 $- 2008 2009 2010 2011 2012 2013 2014 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2018E Ratio 2008
Slide 8: Bank Drove Significant Balance Sheet & Revenue Growth
Bank Drove Significant Balance Sheet & Revenue Growth Impact of Bank Growth LTM on Consolidated Results Bank growth has been balanced between loans and investments: (mil.) 3/31/2016 3/31/2017 Loans: Total consolidated assets $14,214 $19,136 • Comprised of securities based loans, C&I, and Investment
Slide 9: Stifel Overview
Stifel Overview STIFEL
Slide 10: Stifel – Premier Investment Bank and Wealth Management Firm
Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance 2016 GAAP Net Revenue - $2.6 billion Global Wealth Management (GWM) Institutional Group (IG) 2016 Net Revenue - $1.6 billion 2016 Net Revenue - $1.0 billion Private Client Equity & Fixed Income Capital Raising Stife
Slide 11: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Bulge Bracket Boutique Size / scale Firm focus Large distribution Good research Size / scale Trading Growth investor access Firm focus Retail Issues Stability (financial & pers
Slide 12: Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure
Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institu
Slide 13: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues(1) ($MM) Total Equity ($MM) $3,000 $2,738$2,778 $2,800 $2,581 $2,492 $2,500 $2,335 $2,400 $2,320 $2,213 $1,978 $2,059 $2,000 $2,000 $1,594 $1,417 $1,600 $1,495 $1,500 $1,384 $1,254$1,302 $1,091 $1,200 $870 $1,000 $763 $873
Slide 14: Global Wealth Management
Global Wealth Management STIFEL
Slide 15: Global Wealth Management (GWM)
Global Wealth Management (GWM) Provides Securities Brokerage Services and Stifel Bank Products Overview National Presence Grown from 600+ financial advisors in 2005 to approximately 2,300 financial advisors currently Proven organic growth and acquirer of private client business Strategy of rec
Slide 16: Building Scale and Capabilities into a $1.6B Revenue Segment
Building Scale and Capabilities into a $1.6B Revenue Segment ~40 advisors managing ~$4B in AUM January 2017 ~100 advisors managing over $20B in AUM December 2015 ~130 advisors managing ~ $10B in AUM June 2015 Private Client Customized investment advisory and trust services November 2
Slide 17: GWM - Private Client Group
GWM - Private Client Group Key Operating Metrics Financial Advisors(1) Branches(1) 2,500 400 2,291 2,282 2,299 361 360 365 2,077 2,103 1,987 2,041 350 330 1,885 1,935 317 2,000 307 285 291 300 272 1,500 250 1,315 1,163 196 200 1,000 148 735 150 111 500 100 50 0 0 2006 2007 2008 2009 2010 2011 2012 2
Slide 18: GWM – Stifel Bank & Trust
GWM – Stifel Bank & Trust Overview Key Statistics (000s) (4) Acquired FirstService Bank, a St. Louis-based, Missouri- Total assets $13,300,000 chartered commercial bank, in April 2007 Total deposits 1,170,000 Stifel Financial became a bank holding company and Total equity 932,000 financial servi
Slide 19: Growing Asset Management Capabilities
Growing Asset Management Capabilities Asset Management Subsidiaries with $27.5 Billion in Client Assets Assets $11.4 Billion $11.0 Billion $3.0 Billion $1.8 Billion Chicago Baltimore St. Louis Cincinnati Offices Milwaukee New York Baltimore Florham Park, NJ New York Philadelphia San Francisco Equity
Slide 20: Institutional Group
Institutional Group STIFEL
Slide 21: Institutional Group
Institutional Group Overview Net Revenues ($MM)(2)(3)(4) Provides securities brokerage, trading, research, underwriting and $1,200 corporate advisory services $1,014 $997 $976 $900 $861 Largest provider of U.S. Equity Research $668 2nd largest Equity trading platform in the U.S. outside of the B
Slide 22: Building Scale and Capabilities into a $1.0B Revenue Segment
Building Scale and Capabilities into a $1.0B Revenue Segment Growth Focused Investment Banking, Research, Sales and Trading July 2010 Core of our Institutional sales, trading and research group December 2005 Enhances European debt capital markets capabilities February 2016 Equities Hig
Slide 23: Institutional Group – Advisory
Institutional Group – Advisory 2010-2017 YTD: Leadership in M&A of Public Companies and deals < $1bn. All Deals < $1 Billion in Value Public Deals < $1 Billion in Value Rank Investment Bank Sell-side Buy-side Total Value Rank Investment Bank Sell-side Buy-side Total Value 1 Goldman Sachs 342 219 561
Slide 24: Institutional Group – Equity Underwriting
Institutional Group – Equity Underwriting Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 JPMorgan 1,608 $890.8
Slide 25: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Stifel Research Highlights Com panies Under Cov er age Largest provider of U.S. Equity Research Rank Fir m Ov er al l Mid Cap Sm al l Cap 1 Stifel / KB W 1 ,1 9 9 427 338 Largest provider of U.
Slide 26: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 80 person sales force, commission-based 28 sales traders located in Experts in small and mid cap growth and value Baltimore, New York, Boston, Dallas,
Slide 27: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Overview Client Distribution (1)(2) Comprehensive platform Insurance Trust Company 1% Other 2% Broker/Dealer 125 traders with annual client trade volume approaching Company 7% 7% Corporation 1% $500 bil
Slide 28: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel has ranked in the top ten nationally Specialty sectors: for senior managed negotiated Education underwritings for the past five years, and Stifel has ranked #1 nationally for senior Local Government/Municipal managed K-12 negotiated underw
Slide 29: Second Quarter Update & First Quarter Review
Second Quarter Update & First Quarter Review 29
Slide 30: Second Quarter Financial Update
Second Quarter Financial Update Operating Environment Remains Mixed: • Institutional Segment: • Brokerage • Negatively impacted by lower sequential industry-wide volumes , low volatility, a flatter yield curve , and tighter spreads. • Global Wealth Management: • Brokerage • Impacted by move to fee-b
Slide 31: 1st Quarter Highlights
1st Quarter Highlights Financial Highlights Three Months Ended Non-GAAP (000s, except per share data) 1Q17 1Q16 4Q16 1Q17 U.S. GAAP Net revenues $675,531 $619,974 $661,391 $677,515 Compensation ratio 64.6% 66.3% 63.6% 62.3% Non-compensation ratio 23.7% 26.6% 28.1% 22.8% Pre-tax operating margin 11.7
Slide 32: Brokerage & Investment Banking Revenue
Brokerage & Investment Banking Revenue Brokerage: Three Months Ended (000s) 1Q17 1Q16 % Change 4Q16 % Change Global Wealth Management brokerage revenue $171,494 $172,965 -0.9% $160,017 #DIV/0! #DIV/0! 7.2% Institutional brokerage: Equity 53,820 62,273 -13.6% 64,007 -15.9% Fixed income 66,817 83,640
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three months ended March 31, 2017 GAAP to Non-GAAP Reconciliation for Fourth Quarter 2016 Three months GAAP Results (000s) 03/31/17 ended (000s) 03/31/17 GAAP Net Income $65,512 Total GAAP Compensation & benefits expense $436,387 Preferred Dividend 2,344 GAAP comp. ra
Slide 34: Balance Sheet & Net Interest Margin
Balance Sheet & Net Interest Margin Net Interest Income Drivers Net Interest Income Drivers: 3.00% • Total assets increased to $19.14 bil. were flat $15,000 sequentially but increased 35% Y/Y 2.50% • Average interest earning assets decreased to 2.00% $15.2 bil. down 3% sequentially but up 55% Y/Y Av
Slide 35: Segment Results
Segment Results STIFEL
Slide 36: Global Wealth Management
Global Wealth Management $500 GWM Net Revenue • Net revenue in the GWM segment was $443 mil., $400 up 9% sequentially & 17% Y/Y • Brokerage revenue increased 7% Net Revenue (mil) $300 sequentially but declined 1% Y/Y $200 • Ex. Sterne IBC & Clearing, Brokerage revenue increased 9% Y/Y $100 • Net int
Slide 37: Stifel Bank & Trust
Stifel Bank & Trust % % (mil. except for %'s) 1Q17 1Q16 Change 4Q16 Change Assets: Investments $6,557 $4,148 58% $6,209 6% Mortgage Loans 2,214 731 203% 2,161 2% Commercial Loans 1,831 1,295 41% 1,710 7% Securities Based Loans 1,729 1,346 28% 1,614 7% Total Loans, net $5,865 $3,467 69% $5,591 5% Loa
Slide 38: Institutional Group
Institutional Group Institutional Group Net Revenue $300 • Total net revenue of $237 mil. decreased 6% sequentially & 2% Y/Y GAAP Net Revenue (mil.) $250 • Investment banking revenue of $115 mil. $200 decreased 6% sequentially but increased 25% Y/Y $150 • Equity underwriting of $37 mil. decreased $1