Slide 1: 2nd Quarter 2010 Earnings Conference Call
2™4 Quarter 2010 Earnings Conference Call August 10, 2010 As modified on August 12, 2010 STIFEL WININNGUNG
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: Explanation of the Modifications to our August 10, 2010 Earnings Presentation
Explanation of the Modifications to our August 10, 2010 Earnings Presentation In an effort to provide clarity around the merger with Thomas Weisel Partners Group, Inc. (“TWPG”), which closed on July 4, 2010 and the modification of our existing deferred compensation plan, which was approved by the bo
Slide 4: Chairmen's Comments
Chairmen’s Comments “We are very pleased to report record quarterly revenue and record six-month net income and revenue results, which reflect the investments we’ve made over the past several years. The merger with Thomas Weisel Partners closed on July 1, 2010, and we are confident that through the
Slide 5: Financial Highlights
Financial Highlights
Slide 6: Three Months Ended June 30, 2010 Highlights
Three Months Ended June 30, 2010 Highlights > Record net revenues of $328 million, a 25% increase over the 2"! quarter of 2009 (2Q09) and a 5% increase over the 1‘t quarter of 2010 (1Q10). » The Global Wealth Management (GWM) segment posted net revenues of $200 million, a 47% increase over 2Q09 and
Slide 7: Six Months Ended June 30, 2010 Highlights
Six Months Ended June 30, 2010 Highlights > Record net revenues of $640 million, a 33% increase over the comparable period in 2009. >» The GWM segment posted net revenues of $399 million, a 59% increase over the comparable period in 2009. > The IG segment posted net revenues of $238 million, a 3% in
Slide 8: Pro Forma Headcount
Stifel Financial Corp. Pro Forma Headcount Stel TweG Proforma ws ‘s 6/30/10 Asodates 6/30/10 3/31/10 6/30/09 3/31fl0 a /30/09 Global Wealth Management: Financial advisors 1916 8 1,924 1,900 1,562 13% 232% Branch support 1,967 6 1,082. 1,051 a9 29% 27A% Asset management & trading 152 B 5 150 235 167%
Slide 9: Three months ended June 30, 2010 Results
Stifel Financial Corp. Three months ended June 30, 2010 Results {Sin thousands} GAAP Charges Non-GAAP 6/30/2009 GAAP GAAP Netrevenues $328,008 $ - $37R009 $261,505 24% 254% Compensation and benefits 216,907 3119 -243,788 = «175,881 733K 21K Non-comp operatingexpenses 75,157 1,906 73251 59,515 263% 2
Slide 10: Six months ended June 30, 2010 Results
Stifel Financial Corp. Six months ended June 30, 2010 Results Six Months Ended kane 30, 2010 % Change Memer- Six Months Related ended Non- {$ in thousands) GAAP Charges Won-caap 6/30/2009 GAAP GAAP Netrevenues $eagosa $ * $640,039 $ 481486 329% = 32.9% Compensation and benefits 423,149 3,119 420,030
Slide 11: Source of Revenues
Source of Revenues (in thousands) Revenues P Commissions Asset mgt and service fees Investment banking Other Total operating revenues Interest revenue Total revenues cipal transactions Interest expense Net revenues STIFEL FINANCIAL Quarter Ended Six Months Ended Sof Net Revenues Sof Net Revenues % %
Slide 12: Principal Transactions
Principal Transactions Quarter Ended Six Months Ended % % {$ in thousands} 6/30/10 —_—-6/30/09_-—« Change | 6/30/10 —-6/30/09_—=— Change Principal transactions: Taxable debt $ 60,108 $ 84,830 (29.1%) | $ 124,798 $149,986 (16.8%) Municipal debt 20,032 15,461 29.6% 36,874 31,917 15.5% Equities 29,630
Slide 13: Non-interest Expenses
Stifel Financial Corp. Non-interest Expenses Quarter Ended ‘She Months Ended sof Net revenues sof Net revenues __Moflietrevenues:_ ee {$10 thoasands] efn/ faqs“ Change G/a/t0 6/x/09 | Gfso/wm ——6//os_——Change 6/80/10 eyatyos Netrevenues $ 328,009 $ 261,505 250% = 3000% 100% |$ saDOsa $ 481486 329% 1
Slide 14: Segment Comparison
Segment Comparison Quarter Ended Six Months Ended ($ in thousands) 6/30/10 6/30/09 %Change | §/30/10 6/30/09 % Change Net revenues: Global Wealth Management $ 199,940 § 136,200 46.8% |$ 399,361 $251,252 58.9% Institutional Group 124,602 125,136 (0.4%) 237,894 230,608 3.2% Other 3,467 169 * 2,784 (37
Slide 15: Global Wealth Management
Global Wealth Management Quarter Ended Six Months Ended ($ in thousands} 6/30/10 6/30/09 %Change | 6/30/10 6/30/09 % Change Net revenues $ 199,940 $ 136,200 46.8% | $ 399361 $ 251,252 Sao% Compensation and benefits 108,436 74,284 46.1% | 218,303 138,496 S7.6% Transition pay 15,173 9,585 583% 30,044
Slide 16: Stifel Bank & Trust
Stifel Bank & Trust Quarter Ended ‘Six Months Ended {($ in thousands) 6/30/10 6/30/09 Change | 6/30/10 6/30/09 % Change Net revenues: Interest aya 3,776 116.4% 16,258 7,434 118.7% ‘Other income 1,062 1,377_ _ (22.9%) 3,175 2,046 _ 55.2% Total revenues 9,233 5,153 79.2% 19,433 9,480 105.0% Interest e
Slide 17: Stifel Bank & Trust: Low Risk Asset Growth
Stifel Bank & Trust Low Risk Asset Growth > Assets of $1.40 billion, up 22% from the prior year-end balance of $1.14 billion > Investment portfolio of $740 million, up 28% from the prior year- end balance of $579 million > Loan portfolio of $436 million, up 9% from prior year-end balance of $401 mil
Slide 18: Institutional Group
Institutional G Quarter Ended Six Months Ended {$ in thousands) 6/30/10 6/30/09 = % Change | 6/30/10 6/30/09 -% Change Net revenues $ 124,602 $ 125,136 (0.4%) | $ 237894 $ 230,608 3.2% Compensation and benefits 68,476 70,237 (2.5%) 130,697 129,261 11% Transition pay 4,102 4,013 2.2% 3185 7,507 9.0%
Slide 19: Institutional Group Revenues
Institutional Group Revenues Quarter Ended ‘Skx Months Ended % % ($ in thousands) 6/30/10 6/30/09 Change | 6/30/10 6/30/09 Change Sales and trading: Equity $ 44,099 $ 38,078 15.8% |$ 82,751 $ 74,865 10.5% Fixed income 44,263 63,054 (29.894) 88,608 116,502 (23.9%) 88,362 101,132 (12.6% | 171,359 191,
Slide 20: Financial Condition
Financial Condition
Slide 21: Statement of Financial Condition
Statement of Financial Condition $4,000 3,000 $32,000 $31,000 so 20” 204 2005 2005 | 2007 OEE 2602 GRIM Total Assets (§ millions) 2002” 2004 2005-2006 2007 2008 2000 QR2MO STIFEL Leverage Ratio FINANCIAL ss0 seo 50 wer]. S166 $225 250 2M 204 052806 20 He” 2009 NTE Total Capitalization (5 millions) D
Slide 22: Capital Structure
Capital Structure As of June 30, 2010 {$ in thousands} Total Assets $ 3,370,707 Stockholders‘ Equity $ 927,087 Debentures to: Stifel Financial Capital Trust Il -LIBOR plus 1.70% (fied at 6.38% until 9/30/10), due 9/30/35 $ 35,000 Stifel Financial Capital Trust III -LIBOR plus 1.85% (fied at 6.79% un
Slide 23: Level 3 Assets
Level 3 Assets {$ in thousands} Auction Rate Securities (ARS) Stifel Bank & Trust Investments Trading Securities Other Investments Level 3 assets (excluding ARS) Total Level 3 assets Percentage of Equity Percentage of Equity (excluding ARS} STIFEL FINANCIAL Carrying Value 6/30/10 12/31/09 73,634 $ 5
Slide 24: Other Financial Data
Other Financial Data Q2 10 vs. Q2 10 vs. 6/30/10 3/31/10 6/30/09 Q110 Q2z209 Total assets (000s): Stifel Nicolaus and Stifel Financial $ 1,977,879 $ 2,112,054 $ 1,755,684 (6.4%) 12.7% Stifel Bank 1,392,828 1,115,329 532,308 24.9% 161.7% $3,370,707 $3,227,383 $2,287,992 44% 473% Shareholders’ equity
Slide 25: TWP Merger
TWP Merger
Slide 26: TWPG Merger: Deal Consideration
TWPG Merger Deal Consideration fin thousands, except price to book vatue) Shares Value (1) TWPG common stock 3719 $ 161,389 ‘TWPG exchangable shares 780 33,847 Price to less: TWPG shares held by Stifel (53) (2,308) _Book Value 4,446 192,928 1.08x ‘TWPG restricted stock units 1,868 81,064 Total consi
Slide 27: Pro Forma Combined Net Revenues
Stifel Financial Corp. Pro Forma Combined Net Revenues Six Months Ended June 30, 2010 Pro Forma {8 in thousands) Stifel TWPG Combined Revenues Principal transactions & commissions § 449012 $ 37,730 $ 486,742 Asset mgt and service fees 85,241 7,252 92,493 Investment banking BATB 46,235 121,708 Other
Slide 28: Estimated Annual Fixed Operating Expenses
TWPG Merger Estimated Annual Fixed Operating Expenses TwPG (Sn thousands} Stifel ay _Estimate (2) Total Fixed operating expenses: ‘Occupancy and equipment rental $103,000 $ 10,400 $113,400 Communication and office supplies 60,600 10,800 71,400 Commissions and floor brokerage 22,000 2,300 24,300 Othe
Slide 29: Breakeven Sensitivity Model
TWPG Merger Breakeven Sensitivity Model Breakeven of net Breakeven x net (Sin thousands} net income _revenues EPS (1) revenues Net revenues $ 109,575 100% $ 147,500 100% Fixed compensation 5,000 46% 5,000 3.4% Variable compensation 55,000 50.2% 73,900 50.1% Total compensation 60,000 54.8% 78,900 535
Slide 30: Estimated Merger-Related Costs
TWPG Merger Estimated Merger-Related Costs Se recenal, 6/30/10 _9f30fto_— 12/31/10 _ 12/31/11 ‘Compensation and benefits $ 3,100 $177,050 0) $ 700 = Occupancy and equipment rental - 7,000 500 500 Communication and office supplies - 5,500 1,500 1,250 Commissions and floor brokerage - 150 150 150 Othe
Slide 31: Estimated Unit Modification Charge
Estimated Unit Modification Charge On August 3, 2010, the Board approved the modification of the existing Stifel Financial Corp. deferred compensation plan to align the requirements for vesting with that of the TWPG deferred compensation plan, whereby forfeiture would not result from an event of ter
Slide 32: Pro Forma Equity Roll Forward
Stifel Financial Corp. Pro Forma Equity Roll Forward Proforma Unit Stifel (S in thousands) efaafio TWPG Combined _ Modification __Proforma Beginning Equity (1/1/2010) $ 873500 $ oa $ 873,500 $ = $ 873,500 Netincome 45,000 * 45,000 = 45,000 Merger Consideration - 274,000 274,000 - 274,000 Share repur
Slide 33: Pro Forma Estimate and Unit Vesting
Stifel Financial Corp. Pro Forma Estimate and Unit Vesting Stifel 20106 Stifel Breakeven — pre-unit after Unit (in thousands, except pershare data) Consensus (1) Consensus (2) Eps Vesting Unit Vesting Vesting Net revenues $ 1352,100 $ 66950 $ 70 $ 749200 $ $ 749,300 Compensation and benefits 878,600
Slide 34: Regulatory Reform
Regulatory Reform
Slide 35: Dodd-Frank Wall Street Reform and Consumer Protection Act
Dodd-Frank Wall Street Reform and Consumer Protection Act Provisions of Interest to Stifel Financial Corp. Fiduciary Duty SEC Authority to Restrict Mandatory Pre-Dispute Arbitration Consumer Financial Protection VvVvVVvW¥ New Fees > Higher Deposit Insurance Costs » SIPC Fees >» — Volcker Rule STIFEL
Slide 36: Q&A
Q&A STIFEL 35 FINANCIAL