Slide 1: 2nd Quarter 2011 Financial Results Presentation
2nd Quarter 2011 Financial Results Presentation August 8, 2011
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: Non-GAAP Financial Measures
Non-GAAP Financial Measures The company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax ma
Slide 4: Chairman's Comments
Chairman’s Comments “Second quarter results improved over the year-ago period, but were impacted by a challenging market environment dominated by macroeconomic factors, and significant non-core expenses primarily related to additional legal reserves in connection with previously disclosed matters. D
Slide 5: Market Update
Market Update
Slide 6: Indices Since 1/1/07 to 8/5/11
Indices Since 1/1/07 to 8/5/11 30% 20% 10% 0% -10% -20% -30% -40% -50% -60% -70% 2007 2008 2009 2010 2011 Nasdaq Dow S&P 500 Russell 2000 2007 2008 2009 2010 Q1 Q2 YTD 2007 - Current Nasdaq 9.8% -40.5% 43.9% 16.9% 4.8% -0.3% -4.5% 4.8% Dow 6.4% -33.8% 18.8% 11.0% 6.4% 0.8% -1.1% -8.2% S&P 500 3.5% -
Slide 7: Interest Rate Environment
Interest Rate Environment 6.00 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2005 2006 2007 2008 2009 2010 2011 10 Year Trsy Fed Funds 2007 2008 2009 2010 Q1 Q2 Current* 2 Year 3.05% 0.76% 1.14% 0.61% 0.80% 0.45% 0.28% 5 Year 3.45% 1.55% 2.69% 2.02% 2.24% 1.76% 1.23% 10 Year 4.04% 2.25
Slide 8: Financial Results
Financial Results
Slide 9: Stifel Financial Corp. Results (Three Months)
Stifel Financial Corp. Results Three months ended June 30, 2011 Three Months Ended June 30, 2011 Three Months Ended 6/30/10 3/31/11 (Non- % (Non- % (1) (2) (2) ($ in thousands, except per share amounts) GAAP Non-core Non-GAAP GAAP) Change GAAP) Change Net revenues $ 358,857 $ 106 $ 358,963 $ 328,009
Slide 10: Core Net Revenues by Quarter
Core Net Revenues by Quarter ($ Millions) $450 $403 $375 $367 $359 $341 $328 $319 $312 $300 $290 $262 $225 $220 $150 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 9
Slide 11: Core Net Income by Quarter
Core Net Income by Quarter ($ Millions) $50 $47 $40 $33 $31 $30 $30 $25 $24 $24 $22 $20 $16 $13 $10 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 10
Slide 12: Core Pre-Tax Margins
Core Pre-Tax Margins 20% 19% 15% 15% 15% 14% 13% 13% 13% 11% 10% 10% 10% 5% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 11
Slide 13: Core Diluted EPS by Quarter
Core Diluted EPS by Quarter $0.80 $0.74 $0.60 $0.52 $0.50 $0.47 $0.48 $0.45 $0.45 $0.46 $0.40 $0.34 $0.29 $0.20 $0.00 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 12
Slide 14: Q2 2011 Core Results vs. Mean Estimates
Q2 2011 Core Results vs. Mean Estimates 2Q11 Core 2Q11 Mean %∆ $∆ Revenues Commissions $ 138.3 $ 140.6 (1.6%) $ (2.3) Principal transactions 79.7 98.3 (18.8%) (18.5) Commissions +Principal transactions 218.1 238.9 (8.7%) (20.8) Investment banking 64.4 51.8 24.3% 12.6 Asset management and service fee
Slide 15: Book Value Per Share
Book Value Per Share $30 $24.51 $24.50 $20 $19.24 $15.12 $12.24 $10 $8.23 $6.81 $6.01 $4.82 $3.94 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 Q2 2011 14
Slide 16: Stifel Financial Corp. Results (Six Months)
Stifel Financial Corp. Results Six months ended June 30, 2011 Six Months Ended June 30, 2011 Six Months Ended 6/30/10 % (1) (2) ($ in thousands, except per share amounts) GAAP Non-core Non-GAAP (Non-GAAP) Change Net revenues $ 725,470 $ 112 $ 725,582 $ 640,039 13.4% Compensation and benefits 461,105
Slide 17: Source of Revenues
Source of Revenues Quarter Ended Six Months Ended % % ($ in thousands) 6/30/11 6/30/10 Change 3/31/11 % Change 6/30/11 6/30/10 Change Commissions $ 138,315 $ 103,634 33.5% $ 155,786 (11.2%) $ 294,101 $ 208,669 40.9% Principal transactions 79,741 122,923 (35.1%) 92,859 (14.1%) 172,600 240,343 (28.2%)
Slide 18: Brokerage Revenues
Brokerage Revenues Quarter Ended Six Months Ended % % % ($ in thousands) 6/30/11 6/30/10 Change 3/31/11 Change 6/30/11 6/30/10 Change Taxable debt $ 43,020 $ 60,108 (28.4%) $ 51,419 (16.3%) $ 94,439 $ 124,798 (24.3%) Municipal debt 18,850 20,032 (5.9%) 19,538 (3.5%) 38,388 36,874 4.1% Equities 8,896
Slide 19: Investment Banking Revenues
Investment Banking Revenues Quarter Ended Six Months Ended % % % ($ in thousands) 6/30/11 6/30/10 Change 3/31/11 Change 6/30/11 6/30/10 Change Capital raising $ 39,689 $ 30,713 29.2% $ 32,358 22.7% $ 72,047 $ 56,020 28.6% Advisory 24,729 10,539 134.6% 9,060 172.9% 33,789 19,453 73.7% $ 64,418 $ 41,2
Slide 20: Core Compensation & Benefits
Core Compensation & Benefits (% of Net Revenue) 19
Slide 21: Core Non Comp Operating Expenses
Core Non Comp Operating Expenses ($ Millions) 20
Slide 22: Segment Comparison
Segment Comparison Quarter Ended Six Months Ended % % % ($ in thousands) 6/30/11 6/30/10 Change 3/31/11 Change 6/30/11 6/30/10 Change Net revenues: Global Wealth Management $ 225,645 $ 199,940 12.9% $ 238,446 (5.4%) $ 464,091 $ 399,361 16.2% Institutional Group 132,915 124,602 6.7% 126,994 4.7% 259,
Slide 23: Global Wealth Management
Global Wealth Management Quarter Ended Six Months Ended ($ in thousands) 6/30/11 6/30/10 % Change 3/31/11 % Change 6/30/11 6/30/10 % Change Commi s s i ons $ 93,593 $ 79,521 17.7% $ 101,762 (8.0%) $ 195,355 $ 159,108 22.8% Pri nci pa l tra ns a cti ons 51,263 58,675 (12.6%) 56,163 (8.7%) 107,426 118
Slide 24: Stifel Bank & Trust
Stifel Bank & Trust (an operating unit of GWM) Quarter Ended Six Months Ended ($ in thousands) 6/30/11 6/30/10 % Change 3/31/11 % Change 6/30/11 6/30/10 % Change Net revenues: Interest 13,419 8,171 64.2% 11,203 19.8% 24,622 16,258 51.4% Other income 2,943 1,062 177.1% 1,932 52.3% 4,875 3,175 53.5% T
Slide 25: Stifel Bank & Trust: Low Risk Asset Growth Strategy
Stifel Bank & Trust (an operating unit of GWM) Low Risk Asset Growth Strategy & Opportunity Assets of $1.8 billion as of June 30 2011 remained consistent with Maintain solid asset quality: December 31, 2010. Non-performing loans to gross loans of 0.13% Investment portfolio of $1.1 billion, a
Slide 26: Institutional Group
Institutional Group Quarter Ended Six Months Ended ($ in thousands) 6/30/11 6/30/10 % Change 3/31/11 % Change 6/30/11 6/30/10 % Change Commi s s i ons $ 44,721 $ 24,113 85.5% $ 54,025 (17.2%) $ 98,746 $ 49,561 99.2% Pri nci pa l tra ns a cti ons 28,477 64,249 (55.7%) 36,696 (22.4%) 65,173 121,798 (4
Slide 27: Institutional Group Revenues
Institutional Group Revenues Quarter Ended Six Months Ended ($ in thousands) 6/30/11 6/30/10 % Change 3/31/11 % Change 6/30/11 6/30/10 % Change Sales and trading: Equity $ 41,695 $ 44,100 (5.5%) $ 52,398 (20.4%) $ 94,093 $ 82,751 13.7% Fixed income 31,503 44,262 (28.8%) 38,323 (17.8%) 69,826 88,608
Slide 28: Financial Condition
Financial Condition
Slide 29: Statement of Financial Condition
Statement of Financial Condition As of June 30, 2011 Total Assets ($ in Billions) Total Capitalization ($ in Billions) 28 Leverage Ratio Book Value Per Share Per share information adjusted for April 2011 three-for-two stock split 28
Slide 30: Level 3 Assets
Level 3 Assets Carrying Value ($ in thousands) 6/30/11 12/31/10 (1) Auction Rate Securities (ARS) $ 118,411 $ 94,795 Stifel Bank & Trust Investments - - Trading Securities 18,342 (2) 40,243 (3) Other Investments 38,958 38,502 Level 3 assets (excluding ARS) 57,300 78,745 Total Level 3 assets $ 175,71
Slide 31: Other Financial Data
Other Financial Data As of As of 6/30/11 6/30/10 % Change 3/31/11 % Change Total assets (000s): Stifel Nicolaus & Stifel Financial $ 2,705,749 $ 1,977,879 36.8% $ 2,749,674 (1.6%) Stifel Bank 1,807,859 1,392,828 29.8% 1,787,531 1.1% Total assets $ 4,513,608 $ 3,370,707 33.9% $ 4,537,205 (0.5%) Total
Slide 32: Stone & Youngberg LLC Acquisition
Stone & Youngberg LLC Acquisition 31
Slide 33: Stifel Financial Acquires Stone & Youngberg
Stifel Financial Acquires Stone & Youngberg Summary of Strategic Acquisition with a Premiere Public Finance Investment Bank Transaction Stifel to acquire 100% of the membership interests of Stone & Youngberg LLC Expands Stifel’s public finance, institutional sales and trading, bond underwriting,
Slide 34: Complimentary Public Finance Operations
Complimentary Public Finance Operations Locations and Senior Mandated Negotiated State Volume Comparison 2010 16 Public Finance Locations Stifel • Brookfield, WI • Okemos, MI • Cleveland, OH • San Antonio, TX • Columbus, OH • St. Louis, MO • Denver, CO • Wichita, KS $1 million - $100 million • E
Slide 35: Municipal Rankings
Municipal Rankings Public Finance Combined Rankings First Half of 2011 Negotiated Rankings* 2010 Negotiated Rankings* 34 *Source: Thomson Reuters SDC - Negotiated Senior Managed. Full credit to Book and equal credit if Joint.