Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (August 2016)
37 slides from Stifel Financial's investor presentation, Aug 16, 2016
Slide 1: Stifel Financial Corp.
Exhibit 99.1 Stifel Financial Corp. August 2016
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
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 2,298 financial $26B in total $9.4B in assets Experienced Co
Slide 5: A History of Growth
A History of Growth 2015 2016 Barclays Wealth & Eaton Partners Investment Management, Sterne Agee, ISM Capital Sidoti Joint Venture, 2014 Leumi Partners De La Rosa, Collaboration Agreement Oriel Securities, 1919 Investment Counsel, 2013 Merchant Capital Acacia Bank & 2013 Ziegler Lotsoff Knight Capi
Slide 6: Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Slide 7: Core & GAAP EPS to Converge as Deal Charges Realized
Core & GAAP EPS to Converge as Deal Charges Realized 2012 2013 2014 2015 2016 2017 Core $0.63 $0.58 $0.60 $0.53 $0.79 $0.69 $0.68 $0.64 $0.75 $0.65 $0.71 $0.60 $0.51 $0.57 $0.69 $0.60 $0.68 $0.65 $0.74 $0.72 $0.84 GAAP $0.63 $0.21 $0.40 $1.00 $0.64 $0.63 $0.58 $0.52 $0.58 $0.56 $0.27 $0.22 $0.14 $0.
Slide 8: Balance Sheet Growth
Balance Sheet Growth Balance sheet growth has resumed with ability to further lever the existing capital base Infrastructure Build Ratio 2008 2009 2010 2011 2012 2013 2014 2015 Q1 16 Q2 16 Illustrative Tier 1 Leverage 32.3% 30.5% 25.6% 21.4% 17.7% 15.4% 16.5% 16.6% 11.6% 11.5% 9.5% Tier 1 Risk Based
Slide 9: Bank Drove Significant Balance Sheet & Revenue Growth
Bank Drove Significant Balance Sheet & Revenue Growth Impact of Bank Growth LTM on Consolidated Results Bank growth has been balanced between loans and investments: (mil.) 6/30/2015 6/30/2016 Loans: Total consolidated assets $10,140 $15,385 • Comprised of securities based loans, Investment securitie
Slide 10: Potential Impact of Target Asset Levels on Results
Potential Impact of Target Asset Levels on Results Impact of Bank Growth to Targeted Levels Targeted Bank Growth Would have Normalized Preferred & Significantly Impacted Second Quarter (mil.) 6/30/2016 6/30/2016 Fully Levered Results: Average Assets $13,599 $15,000 $18,000 Risk Weighted Assets $7,48
Slide 11: Stifel Overview
Stifel Overview
Slide 12: Stifel – Premier Investment Bank and Wealth Management Firm
Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance GAAP Net Revenue - $2,446 million (Q2’16 LTM) Global Wealth Management (GWM) Institutional Group (IG) Net Revenue - $1,470 million (Q2’16 LTM) Net Revenue - $980 million (Q2’16 LTM) Private Client Equity & Fixed Income Ca
Slide 13: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Stifel’s Differentiated Value Proposition: Growth, Scale and Stability Bulge Bracket Boutique Size / scale Firm focus Large distribution Good research Size / scale Trading Growth investor access F
Slide 14: Well-diversified, low risk business model with balanced retail and institutional exposure
Well-diversified, low risk business model with balanced retail and institutional exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institutional b
Slide 15: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues ($MM) (1) Non-GAAP Net Income ($MM) (1) Total Equity ($MM) (1) CAGR: 19% CAGR: 17% CAGR: 28% Total Client Assets (1) (2) ($BN) Book Value Per Share (1) (3) $250 $220 $226 CAGR: 21% CAGR: 16% $200 $187 $166 $150 $138 $122 $1
Slide 16: Global Wealth Management
Global Wealth Management
Slide 17: 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 nearly 2,300 (1) financial advisors currently Proven organic growth and acquirer of private client business Strategy of recruiting e
Slide 18: Building Scale and Capabilities into a $1.5B Revenue Segment
Building Scale and Capabilities into a $1.5B Revenue Segment… ~100 advisors managing over $20B in AUM December 2015 ~130 advisors managing ~ $10B in AUM June 2015 Customized investment advisory and trust services November 2014 Private Client Private Client – 350 financial advisors and support Revenu
Slide 19: GWM - Private Client Group
GWM - Private Client Group Key Operating Metrics Financial Advisors (1) Branches (1) Accounts (1) Total Client Assets (1) ($MM) (1) Excludes Legacy Sterne Agee Independent Contractor Business. 19
Slide 20: GWM - Stifel Bank & Trust
GWM - Stifel Bank & Trust Overview Key Statistics (000s) Acquired FirstService Bank, a St. Louis-based, Total assets $9,431,000 Missouri-chartered commercial bank, in April 2007 Total deposits 7,881,000 Stifel Financial became a bank holding company and Total equity 613,000 financial services holdin
Slide 21: Growing Asset Management Capabilities
Growing Asset Management Capabilities Total Assets: $26.3 Billion¹ Assets $11.4 Billion $10.3 Billion $2.5 Billion $889* Million $1.2 Billion Offices Chicago Baltimore Baltimore New York Florham Park, NJ St. Louis Cincinnati Milwaukee New York New York Philadelphia San Francisco ¹As of 6/30/2016 *Sa
Slide 22: Institutional Group
Institutional Group
Slide 23: Institutional Group
Institutional Group Overview Net Revenues ($MM) (2)(3) Provides securities brokerage, trading, research, underwriting and corporate advisory services Largest provider of U.S. Equity Research 2nd largest Equity trading platform in the U.S. outside of the Bulge Bracket (1) Full-service Investment Bank
Slide 24: Building Scale and Capabilities into a $1.0B Revenue Segment
Building Scale and Capabilities into a $1.0B Revenue Segment… Growth Focused Investment Banking, Research, Sales and Trading Equities July 2010 Core of our Institutional sales, trading and research group December 2005 Enhances European debt capital markets capabilities February 2016 Highly complemen
Slide 25: Institutional Group – Investment Banking
Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 Bank of America Merrill
Slide 26: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform (1) U.S. Equity Research Coverage Stifel Research Highlights Companies Under Coverage Rank Firm Overall Mid Cap Small Cap 1 Stifel/KBW 1,286 455 427 Largest provider of U.S. Equity Research 2 JPMorgan 1,127 409 175 3 BofA Merrill L
Slide 27: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 84 person sales force, commission-based Experts in small and mid cap growth and value 34 sales traders located in Team-based sales model with 2 - 4 coverage sa
Slide 28: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities (1)(2) Overview Client Distribution Trust Company Comprehensive platform Insurance 1% Other 2% Broker/Dealer Company 7% 7% 89 traders with annual client trade volume Corporation 1% approaching $500 billion
Slide 29: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel has ranked in the top ten nationally for senior Specialty sectors: managed negotiated underwritings for the past five Education years, and Stifel has ranked #1 nationally for senior Local Government/Municipal managed K-12 negotiated underwritings
Slide 30: Financial Information
Financial Information
Slide 31: Net Revenue
Net Revenue Core Net Revenue (mil.) • Total net revenue of $652 mil. in 2Q16 $700 $600 $598 $592 $581 $620 $652 was up 5% sequentially and 9% Y/Y $500 driven by: $400 $300 • Investment Banking revenue $200 increased 32% sequentially but $100 $- declined 16% Y/Y 2Q15 3Q15 4Q15 1Q16 2Q16 • Asset Manag
Slide 32: Global Wealth Management
Global Wealth Management GWM Core Net Revenue (mil.) • Total net revenue in the GWM segment $450 $400 was $386 mil. in 2Q16, up 2% sequentially $350 $300 & 12% Y/Y $250 $200 • Brokerage revenue declined less than $150 $100 1% sequentially but increased 8% Y/Y $50 $0 • Asset management revenue was fl
Slide 33: Stifel Bank & Trust
Stifel Bank & Trust $60.0 Net Revenue (mil.) • Total net revenue at Stifel Bank & Trust was $56 mil. in 2Q16 was up $50.0 5% sequentially & 36% Y/Y $40.0 $30.0 • Total bank loans of $4.6 bil. increased 23% sequentially & 75% $20.0 Y/Y $10.0 • Total investment securities of $4.6 $0.0 2Q15 3Q15 4Q15 1
Slide 34: Institutional Group
Institutional Group • Total net revenue of $261 mil. in 2Q16 increased 8% sequentially & 1% Y/Y • Investment banking revenue of $124 mil. increased 34% sequentially but declined 15% Y/Y • Advisory revenue of $68 mil. increased 43% sequentially & 7% Y/Y • Brokerage revenue of $136 mil. Core Expense R
Slide 35: Institutional Brokerage & Investment Banking
Institutional Brokerage & Investment Banking Equity & Fixed Income Brokerage Net Revenue • Brokerage revenue in 2Q16 was $136 mil. • Equity brokerage revenue of $55 mil. was down 12% sequentially & 6% Y/Y • Fixed income brokerage revenue of $81 mil. was down 3% sequentially but increased 57% Y/Y Inv
Slide 36: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation GAAP Results Three months ended Three months ended (000s) 06/30/16 03/31/16 (000s) 06/30/16 03/31/16 Total GAAP Compensation & benefits expense $ 460,023 $ 411,113 GAAP net income $ 9,772 $ 27,054 GAAP comp. ratio 70.5% 66.3% Duplicative expenses: Compensation & benef
Slide 37: Balance Sheet & Capital Return
Balance Sheet & Capital Return Net Interest Income Drivers • Balance Sheet: • Total assets increased to $15.4 bil. in 2Q16, up 7% sequentially & 50% Y/Y • Average interest earning assets increased to $11.4 bil. up 8% sequentially & 63% Y/Y • NIM decreased to 171 bps , down 15 bps sequentially & 23 b
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