Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (June 2017)
38 slides from Stifel Financial's investor presentation, Jun 21, 2017
Slide 1: Investor Presentation June 2017
Investor Presentation June 2017 Exhibit 99.1
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 Client 2,299 financial advisors in 360 branches with more than $225B in client assets Asset Management $27B in total assets managed through various strategies Bank $13B in
Slide 5: A History of Growth
A History of Growth 2005 Legg Mason’s Capital Markets Division 2008 Butler Wick 2009 56 UBS Private Client Branches 2010 Thomas Weisel Partners 2007 Ryan Beck Acquisition Stifel Bank & Trust 2011 Stone & Youngberg 2012 Miller Buckfire 2013 Knight Capital Group’s Fixed Income Division 2014 De La Rosa
Slide 6: Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Slide 7: Infrastructure Build and Balance Sheet Growth
139% Growth 105% Growth Infrastructure Build Balance Sheet Growth
Slide 8: Bank Drove Significant Balance Sheet & Revenue Growth
Bank Drove Significant Balance Sheet & Revenue Growth Bank growth has been balanced between loans and investments: Loans: Comprised of securities based loans, C&I, and residential mortgages Focused lending to high net worth retail clients Effective duration of approximately 1. 6 years as of 3/31/17
Slide 9: Stifel Overview
Stifel Overview STIFEL 3
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) 2016 Net Revenue - $1.6 billion Institutional Group (IG) 2016 Net Revenue - $1.0 billion Private Client Stifel Bank & Trust Margin and Securities-based L
Slide 11: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Bulge Bracket Boutique Size / scale Large distribution Trading Retail Issues Lack of focus Banker turnover Lack of commitment Research indifference Lack of growth investors Firm focus Good researc
Slide 12: Well-diversified, Low Risk Business Model
Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institutional b
Slide 13: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues(1) ($MM) Total Equity ($MM) Total Client Assets(2) ($BN) Book Value Per Share(3) 2017 Non-GAAP net revenue based on annualized 1Q17 results Excludes impact of sale of Sterne Agee Independent Contractor & Correspondent Clear
Slide 14: Global Wealth Management
Global Wealth Management STIFEL
Slide 15: Global Wealth Management (GWM) Overview
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 recruitin
Slide 16: Building Scale and Capabilities into a $1.6B Revenue Segment
Building Scale and Capabilities into a $1.6B Revenue Segment Private Client Asset Management Bank 56 UBS Branches Private Client – 350 financial advisors and support Revenue production has exceeded expectations October 2009 Private Client – 75 financial advisors Public Finance December 2008 Private
Slide 17: GWM - Private Client Group Key Operating Metrics
GWM - Private Client Group Key Operating Metrics Accounts(1) Financial Advisors(1) Total Client Assets(1) ($MM) Branches(1) As of 3/31/2017 and excludes Legacy Sterne Agee Independent Contractor Business.
Slide 18: GWM – Stifel Bank & Trust
GWM – Stifel Bank & Trust Acquired FirstService Bank, a St. Louis-based, Missouri-chartered commercial bank, in April 2007 Stifel Financial became a bank holding company and financial services holding company Substantial Balance sheet growth with low-risk assets Funded by Stifel Nicolaus client depo
Slide 19: Growing Asset Management Capabilities
Growing Asset Management Capabilities Asset Management Subsidiaries with $27.5 Billion in Client Assets EquityCompass Strategies is a research and investment advisory unit of Choice Financial Partners, Inc. (“Choice”). Choice and Ziegler Capital Management, LLC (“ZCM”) are wholly-owned subsidiaries
Slide 20: Institutional Group
Institutional Group STIFEL 20
Slide 21: Institutional Group Net Revenues
Institutional Group Net Revenues ($MM)(2)(3)(4) Fixed Income Brokerage + Investment Banking (4) Overview Equity Brokerage + Investment Banking (4) Provides securities brokerage, trading, research, underwriting and corporate advisory services Largest provider of U.S. Equity Research 2nd largest Equit
Slide 22: Building Scale and Capabilities into a $1.0B Revenue Segment
Equities Fixed Income Investment Banking 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 Knight Fixed Income IB, Sales and Trading, Private
Slide 23: Institutional Group – Advisory
Institutional Group – Advisory 2010-2017 YTD: Leadership in M&A of Public Companies and deals < $1bn. Public Deals < $1 Billion in Value All Deals < $1 Billion in Value Source: Dealogics M&A Analytics as of June 2017. Note: Includes all sell-side and buy-side strategic or sponsor-backed disclosed va
Slide 24: Institutional Group – Equity Underwriting
Institutional Group – Equity Underwriting Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions Bookrun Equity Deals Since 2010 All Managed Equity Deals Since 2010 Source: Dealogic. Rank eligible SEC registered IPOs and Follow-On offerings since 2010. Includes demutualizations. A
Slide 25: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Coverage Balanced Across All Market Caps (1) Stifel Research Highlights Largest provider of U.S. Equity Research Largest provider of U.S. Small Cap Research² #1 U.S. provider of Financial Services
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 Extensive Distribution Network Relationships with over 3,500 institutional accounts globally Active daily market maker in over 3,700 stocks Traded over 7.4 bil
Slide 27: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Overview Client Distribution (1)(2) Platform & Products Comprehensive platform 125 traders with annual client trade volume approaching $500 billion 50-person Fixed Income Research and Strategy Group Widespr
Slide 28: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel has ranked in the top ten nationally for senior managed negotiated underwritings for the past five years, and Stifel has ranked #1 nationally for senior managed K-12 negotiated underwritings for 2016. Stifel’s Public Finance Group ranked #1 in mun
Slide 29: Second Quarter Update & First Quarter Review
Second Quarter Update & First Quarter Review
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-based account
Slide 31: 1st Quarter Highlights
1st Quarter Highlights Three Months Ended Non-GAAP 1Q17 1016 4Q16 1Q17 (000s, except per share data) 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% 228% Pretax operating margin 11.7% 7TA% 8.3% 149% Net i
Slide 32: Brokerage & Investment Banking Revenue
Brokerage & Investment Banking Revenue
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three months ended March 31, 2017
Slide 34: Balance Sheet & Net Interest Margin
Balance Sheet & Net Interest Margin Net Interest Income Drivers: Total assets increased to $19.14 bil. were flat sequentially but increased 35% Y/Y Average interest earning assets decreased to $15.2 bil. down 3% sequentially but up 55% Y/Y NIM increased to 224 bps , up 33 bps sequentially & 23 bps Y
Slide 35: Segment Results
Segment Results STIFEL 35
Slide 36: Global Wealth Management
Global Wealth Management Net revenue in the GWM segment was $443 mil., up 9% sequentially & 17% Y/Y Brokerage revenue increased 7% sequentially but declined 1% Y/Y Ex. Sterne IBC & Clearing, Brokerage revenue increased 9% Y/Y Net interest income increased 14% sequentially & 73% Y/Y 2,299 total FAs u
Slide 37: Stifel Bank & Trust
Stifel Bank & Trust 1Q17 1016 4Q16 Change $6557 $4,148 | 58% | $6209] 6% 2214 731 | 203% 2161| 2% 1831 1295 | 41% 1710 | 7% 1729 1346 | 28% 1614] 7% Total Loans, net $5,865 $3467 | 69% | $5,591 5% Loans Held for Sale 207 133 | 56% 229 | 10% Total Assets $13,233 $8,172 | 62% |$12,798 | 3% $11,701 $7,
Slide 38: Institutional Group
Institutional Group Total net revenue of $237 mil. decreased 6% sequentially & 2% Y/Y Investment banking revenue of $115 mil. decreased 6% sequentially but increased 25% Y/Y Equity underwriting of $37 mil. decreased 5% sequentially but increased 97% Y/Y Debt underwriting of $25 mil. decreased 10% se