Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (September 2020)
41 slides from Stifel Financial's investor presentation, Sep 9, 2020
Slide 1: Investor Presentation
Investor Presentation September 9, 2020
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 2,232 financial $26B in total $18.1B in assets Experienced s
Slide 5: A History of Organic Growth & Acquisitions
A History of Organic Growth & Acquisitions 2019 2018 First Empire Ziegler Wealth MainFirst 2017 Mooreland Partners City Management, 2016 Business GMP Eaton Partners Securities George K. Baum Bancshares Inc. 2015 ISM Capital B&F Capital Markets Barclays Wealth & 2014 Investment Management, De La Rosa
Slide 6: Stifel Overview
Stifel Overview STIFEL
Slide 7: Stifel – Premier Investment Bank and Wealth Management Firm
Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance 2019 GAAP Net Revenue - $3.3 billion Global Wealth Management (GWM) Institutional Group (IG) 2019 Net Revenue - $2.1 billion 2019 Net Revenue - $1.2 billion Private Client Equity & Fixed Income Capital Raising Stife
Slide 8: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Bulge Bracket Boutique Size / scale Firm focus Large distribution Good research Size / scale Trading Growth investor access Firm focus Retail Issues Stability (financial & pers
Slide 9: Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure
Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institu
Slide 10: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues(1)(4) ($MM) Total Equity(1) ($MM) $4,000 $3,884 $4,000 $3,615 $3,500 $3,337 $3,500 $3,168 $3,025 $2,928 $3,000 $3,000 $2,862 $2,738 $2,580 $2,335 $2,492 $2,500 $2,213 $2,500 $2,320 $1,978 $2,059 $2,000 $2,000 $1,594 $1,417
Slide 11: Balance Sheet Growth
Balance Sheet Growth $30,000 $25,896 $25,624 $24,520 $24,610 $25,000 $21,384 $19,129 $20,000 Total Assets in Millions $15,000 $13,326 $9,518 $9,009 $10,000 $6,966 $4,952 $4,213 $5,000 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q2
Slide 12: Global Wealth Management
Global Wealth Management STIFEL
Slide 13: 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 2,232 financial advisors currently Proven organic growth and acquirer of private client business Strategy of recruiting experi
Slide 14: Building Scale and Capabilities into a $2.1 Billion Revenue Segment
Building Scale and Capabilities into a $2.1 Billion Revenue Segment Private Client Bank 56 UBS Branches 14
Slide 15: GWM - Private Client Group
GWM - Private Client Group Key Operating Metrics Financial Advisors(1)(2)(3) Branches(1)(2) 450 2,500 2,291 2,282 2,244 389 2,222 2,232 382 2,152 400 369 2,077 2,103 361 360 1,987 2,041 355 2,000 1,935 350 330 307 317 285 291 300 1,500 250 200 1,000 150 100 500 50 0 0 2010 2011 2012 2013 2014 2015 2
Slide 16: GWM – Stifel Bancorp, Inc.
GWM – Stifel Bancorp, Inc. Overview Key Statistics (000s) (1)(2) Acquired FirstService Bank, a St. Louis-based, Missouri- Total assets $18,123 chartered commercial bank, in April 2007 Total deposits 16,302 Stifel Financial became a bank holding company and Total equity 1,378 financial services h
Slide 17: Growing Asset Management Capabilities
Growing Asset Management Capabilities Asset Management Subsidiaries with $25.7 Billion in Client Assets Assets $15.4 Billion $3.6 Billion $6.7 Billion Baltimore Birmingham Baltimore Florham Park, NJ Offices Cincinnati Boston San Francisco New York Philadelphia San Francisco As of June 30, 2020. 1919
Slide 18: Institutional Group
Institutional Group STIFEL
Slide 19: Institutional Group
Institutional Group Overview Net Revenues ($MM)(2)(3) Provides securities brokerage, trading, research, underwriting and $1,500 corporate advisory services $1,200 $1,214 $1,111 $1,055 Largest provider of U.S. Equity Research $997 $976 $1,014 $861 $900 3rd largest U.S Investment bank by U.S. eq
Slide 20: Building Scale and Capabilities into a $1.2 Billion Revenue Segment
Building Scale and Capabilities into a $1.2 Billion Revenue Segment Investment Banking Fixed Income Equities Knight GMP 20
Slide 21: Institutional Group – Advisory
Institutional Group – Advisory 2010-2020: 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 Stifel 436 407 843 $148.5 1 S
Slide 22: Institutional Group – Equity Underwriting
Institutional Group – Equity Underwriting Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 JPMorgan 2,282 $1,249.
Slide 23: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1)(2) Stifel Research Highlights Companies Under Coverage Largest provider of U.S. Equity Research Platform Rank Firm Overall Mid Cap Small Cap 1 Stifel / KBW 1,177 426 359 #1 U.S. provider of Fin
Slide 24: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 116 person sales force 49 sales traders located in Baltimore, New York, Boston, San Experts in small and mid cap growth and value Francisco, Geneva, Lond
Slide 25: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Institutional Fixed Income Sales Institutional Fixed Income Trading Comprehensive platform Unmatched distribution network for clients, issuers and 80+ traders with annual client trade volume more than
Slide 26: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel has been growing its public finance Total of 36 Public Finance offices practice both organically and through Nearly 200 Public Finance professionals acquisitions over the past seven years Specialty sectors: including De La Rosa, Merchant C
Slide 27: Second Quarter 2020 Results
Second Quarter 2020 Results 27
Slide 28: Diversity
Diversity STIFEL FINANCIAL CORP. 2019 ANNUAL REPORT “We can do much better with regard to diversity among our associates in particular. The business case for this effort is simple, as greater diversity – in all its forms – provides more opportunities to grow while reducing the risks of blinkered, na
Slide 29: Second Quarter Snapshot
Second Quarter Snapshot 2Q20 RESULTS millions, except per share and ratios NET REVENUES NET EARNINGS EPS GAAP $895.8 NON-GAAP $895.8 GAAP $103.0 NON-GAAP $115.3 GAAP $1.39 NON-GAAP $1.55 ANNUALIZED ROE ANNUALIZED ROTCE BOOK VALUE PER SHARE GAAP 12.6% NON-GAAP 14.1% GAAP 20.7% NON-GAAP 23.2% TBV $30.
Slide 30: Second Quarter Results
Second Quarter Results FINANCIAL RESULTS SECOND QUARTER HIGHLIGHTS Sequential millions 2Q20 Y/Y Change YTD VS 2019 Change ■ Second quarter Non-GAAP Net Revenue of $896 million, up 12% Y/Y. Global Wealth Management $506 -5% -13% $1,089 4% ■ Record Institutional Group Net Revenue of $398 million, up 4
Slide 31: Global Wealth Management
Global Wealth Management GLOBAL WEALTH MANAGEMENT REVENUE HIGHLIGHTS Sequential millions 2Q20 Y/Y Change YTD VS 2019 ■ Record 6-Month Net Revenue of $1.1 billion, up% 4 Y/Y Change Brokerage $159 -2% -12% $339 7% ■ Pre-tax Pre-provision Margin of 34.7% Asset Management & Service Fees 199 -6% -16% 437
Slide 32: Wealth Management Metrics
Wealth Management Metrics RECRUITING DRIVES REVENUE GROWTH DYNAMIC BUSINESS $180 250 ■ 85% of FAs joined Stifel in past 10 years came through organic $160 recruiting, 15% through acquisitions $140 200 Financial Advisors $120 ■ Recruiting remotely during pandemic 150 millions $100 ■ Growth of average
Slide 33: Institutional Group
Institutional Group INSTITUTIONAL GROUP REVENUE HIGHLIGHTS Sequential millions 2Q20 Y/Y Change YTD VS 2019 Change ■ Record Quarterly Revenue of $398 million, up 47% Y/Y Advisory $98 18% 29% $174 -7% ■ Record Institutional Brokerage of $184 million, up 86% Y/Y Capital Raising $111 29% 19% $204 51% ■
Slide 34: Institutional Equities & Fixed Income
Institutional Equities & Fixed Income INSTITUTIONAL EQUITIES REVENUE INSTITUTIONAL FIXED INCOME REVENUE Sequential Sequential millions 2Q20 Y/Y Change YTD VS 2019 millions 2Q20 Y/Y Change YTD VS 2019 Change Change Brokerage $63 55% -10% $133 68% Brokerage $121 107% 21% $220 75% Capital Raising $63 7
Slide 35: Investment Banking Revenue
Investment Banking Revenue INVESTMENT BANKING REVENUE HIGHLIGHTS Sequential millions 2Q20 Y/Y Change YTD VS 2019 ■ Third Strongest Investment Banking Quarter Change Capital Raising: ■ Second Strongest Capital Raising Quarter ■ Strongest Verticals were Financials, Healthcare, Technology, and Equity $
Slide 36: Net Interest Income
Net Interest Income CONDENSED NET INTEREST INCOME NET INTEREST COMMENTARY 2Q20 Y/Y Change Sequential Change ■ 2Q20 NII within previous guidance range, but negatively impacted by Average Average Average Average Average Average rate environment & impact of senior note issuance Balance Interest Balance
Slide 37: Investment Portfolio & CLOs
Investment Portfolio & CLOs INVESTMENT PORTFOLIO HIGHLIGHTS millions Total Portfolio % of Portfolio ■ AAA /AA CLOs with a Portfolio Credit Enhancement of 28.6% CLO $4,396 70% ■ 83% of CLO Collateral is BB/B Agency MBS 752 12% ■ Using Severely Adverse Default Expectations Results in Remaining Corpora
Slide 38: Stifel Bancorp Inc. Loan Portfolio
Stifel Bancorp Inc. Loan Portfolio HIGHLIGHTS LOAN PORTFOLIO ■ Lending facilities for Stifel WM and Institutional clients, as well as % of Total banking relationships outside of Stifel millions 2Q20 Portfolio ■ Over 50% of the loan portfolio is to Wealth Management clients Residential Real Estate $3
Slide 39: CECL Impact
CECL Impact ASSUMPTIONS CECL 2Q20 FACTORS Economic Factors ■ Moody’s forecast: $13.2 Portfolio Changes ■ 40% Baseline (sudden - Changes to $5.9 sharp recession) Economic Factors macro-economic - New loans, less variables $14.3 amortization, and ■ 30% Downside Portfolio Changes credit performance (do
Slide 40: Expenses
Expenses NON-GAAP EXPENSES & PRE-TAX INCOME COMPENSATION RATIO Sequential 65.0% millions 2Q20 Y/Y Change YTD VS 2019 Change 62.5% Compensation $537 16% -6% $1,108 21% 63.0% Ex. IB Gross Up & Loan Loss Provision $167 2% -10% $355 10% 3.5% 61.0% 60.0% Loan Loss Provision & IB Gross Up $32 114% 18% $58
Slide 41: Capital & Liquidity
Capital & Liquidity FIRM-WIDE ASSETS & CAPITAL RATIOS HIGHLIGHTS $25,896 $26,000 $25,624 25.0% ■ Sweep Balances Continued to Increase in 2Q20 23.0% ■ Capital Ratios Increased Meaningfully in 2Q20 $25,000 $24,610 $24,344 21.0% $24,161 ■ Projecting No Material Change in the Size or Composition of the
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