Slide 1: 2nd Quarter 2010 Earnings Conference Call
2"4 Quarter 2010 Earnings Conference Call August 10, 2010 STIFEL ININNGUNG
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: 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 4: Financial Highlights
Financial Highlights
Slide 5: 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* quarter of 2010 (1Q10). > The Global Wealth Management (GWM) segment posted net revenues of $200 million, a 47% increase over 2Q09 and r
Slide 6: 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 $238 million, a 3% inc
Slide 7: Associate Growth
Stifel Financial Corp. Associate Growth Proforma 6/30/2010 (1) 5/30/09 Change % change Global Wealth Management: Financial advisors 1,940 1562 354 22.7% Branch support 1,067 849 218 25.7% Stifel Bank & Trust 100 76 24 31.6% 3,107 2487 596 24.0% Institutional Group: Investment banking 272 159 113 711
Slide 8: Three months ended June 30, 2010 Results
Stifel Financial Corp. Three months ended June 30, 2010 Results Three Months Ended June 30, 2010 % Change Three Merger Months Related ended Non {$in thousands) GAAP Charges Non-GAAP 6/30/2009 GAAP = GAAP Net revenues $3009 $ - $328,009 $261,505 25.4% 25.4% Compensation and benefits 216,907 3119 213,
Slide 9: Six months ended June 30, 2010 Results
Stifel Financial Corp. Six months ended June 30, 2010 Results Six Months Ended June 30, 2010 % Change Merger- Six Months Related ended Non {$n thousands) GAAP Charges = NonGAAP 6/30/2009 «GAAP = GAAP Net revenues $ean039 $- $600,039 $ 481,486 329% = 32.9% ‘Compensation and benefits 423,149 3,119 420
Slide 10: Source of Revenues
Source of Revenues (Bin thousands) Revenues Principal transactions Commissions Asset mgt and servi Investment banking Other Total operating revenues Interest revenue Total revenues fees Interest expense Net revenues STIFEL FINANCIAL Quarter Ended Six Months Ended Sof Net Revenues Sof Net Revenues %
Slide 11: 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 12,359
Slide 12: Non-Interest Expenses
Stifel Financial Corp. Non-Interest Expenses Quarter Ended ‘She Months Ended sof Net revenues sof Net revenues __Mofietrerenuer — {$10 thowsends) efan/ eas Change Gato 6/x/09 | Gfso/m ——6/s0/0s_——Change 9/8/10 eyatyos Netrevenues $ 328,009 $ 261,505 230% = 3000% 1000% |$ SeaDOsa $ 481486 329% 100% 1
Slide 13: Segment Comparison
Segment Comparison Quarter Ended Six Months Ended {$ in thousands) 6/30/10 6/30/09 %Change | 6/30/10 6/30/09 4 Change Net revenues: Global Wealth Management $ 199,940 $ 136,200 468% |$ 399,361 $251,252 58.9% Institutional Group 124,602 125,136 (0.4%) 237,894 230,608 3.2% Other 3,467 169 ‘ 2,784 (374
Slide 14: Global Wealth Management
Global Wealth Management Quarter Ended Six Months Ended {$ in thousands) 6/30/10 e/sojog = Change | 6/30/10 6/30/09 % Change Net revenues $ 199,949 $ 136,200 46.8% | $ 399,361 § 251,252 58.9% Compensation and benefits 108,436 74,244 46.1% | 218,303 138,496 57.6% Transition pay 15,173 9,585 58.3% 30,
Slide 15: 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 _ {22.999 3,175 2,046 _ 55.2% Total revenues 9,233 5,153 79.2% 19,433 9,480 105.0% Interest ex
Slide 16: 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 mi end balance of $579 million n, up 28% from the prior year- Strategy & Opportunity Maintain solid asset quality: > Non-performing loans to gro
Slide 17: Institutional Group
Institutional Group Quarter Ended Six Months Ended {$ 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% 8185 7,507
Slide 18: Institutional Group Revenues
Institutional Group Revenues Quarter Ended Slx Months Ended % % (Sin 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 (29.8%) 88,608 116,502 (23.994) 88,362 101,132 (12.69) 171,359 191,367 (
Slide 19: Financial Condition
Financial Condition
Slide 20: Statement of Financial Condition
Statement of Financial Condition $4900 $3,000 $2000 $1,000 $0 20@ "mod m5 2006 2007 2008 2009 2HIO Total Assets (6 millions) 2002” 2004 2005-2006 2007 2008 STIFEL Leverage Ratio FINANCIAL 209 qaae 50 seo ws0 00 350 mS 20 «mes te 2H He 2 GrATO Total Capitalization (¢ mitiions) Defined as stackholder’
Slide 21: Capital Structure
Capital Structure As of June 30, 2010 {$ 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 22: 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 23: 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 24: TWP Merger
TWP Merger
Slide 25: TWP Merger: Deal Consideration
TWP Merger Deal Consideration {in thousands, except price to book valve) Shares Value {1} TWPG common stock 3,719 $ 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 consid
Slide 26: 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 95,241 7,252 92,493 Investment banking BATB 46,235 121,708 Other
Slide 27: Estimated Annual Fixed Operating Expenses
TWP Merger Estimated Annual Fixed Operating Expenses Twe (Sin thousands) Stifel (1) _ Estimate (2) Total Fi rating expen: 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 Other operati
Slide 28: Breakeven Sensitivity Model
TWP Merger Breakeven Sensitivity Model Breakeven eof net Breakeven at net {8 in thousands) net income _ revenues EPS (1) revenues Net revenues $ 109,575 100% $ 147,500 100% Fixed compensation 5,000 4.6% 5,000 3.4% Variable compensation 55,000 50.2% 73,900 50.1% Total compensation 60,000 54.8% 78,900
Slide 29: Estimated Merger-Related Costs
TWP Merger Estimated Merger-Related Costs Quarter Ended Year ended {$n thousands) 6/30/10 _ 9/30/10 12/31/10 12/31/14. Operating expenses: ‘Compensation and benefits $ 3,100 $177,050 m) $ 700 - Occupancy and equipment rental : 7,000 500 500 ‘Communication and office supplies - 5,500 1,500 1,250 Comm
Slide 30: Estimated Unit Modification Charge
Estimated Unit Modification Charge On August 3, 2010, the Board approved the madification 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 fram an event of ter
Slide 31: Pro Forma Equity Roll Forward
Stifel Financial Corp. Pro Forma Equity Roll Forward Proforma Unit, {S in thousands) 6/30/10 TWPG: Combined Modification —_Stifel Proforma Beginning Equity (1/1/2010} $ 873500 § - $ 873500 § - $ 873,500 Net income 45,000 - 45,000 - 45,000 Merger Consideration - 274,000 274,000 - 274,000 Share repurc
Slide 32: Regulatory Reform
Regulatory Reform
Slide 33: 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 VwvVv¥W¥ New Fees > Higher Deposit Insurance Costs >» SIPCFees >» Volcker Rule STIFEL 32
Slide 34: Q&A
O&A FINANCIAL 33