Stifel Financial Corporation · NYSE:SF
Stifel Financial — Merger or Acquisition (May 2010)
45 slides from Stifel Financial's merger presentation, May 18, 2010
Slide 1: Building the Premier Middle-Market Investment Bank
GC STIFEL FINANCIAL Building the Premier Middle-Market Investment Bank Presentation to Investors May 2010
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation that relate to Stifel Financial Corp., as well as Stifel, Nicolaus and Company, Inc. and its other subsidiaries (collectively, "Stifel’ or the "Company") and Thomas Weisel Partners Group, Inc. (‘Thomas Weisel Partners") future plans, objecti
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed merger, Stifel will be filing a registration statement on Form S-4 that will include a proxy statement of Thomas Weisel Partners that also constitutes a prospectus of Stifel and other relevant documents relating to the acqui
Slide 4: Stifel is a Growth Story
Stifel is a Growth Story Net Revenues ($MM) Core Net Income ($MM) “ Total Equity ($MM) 31,200 soot $60 g73 $78 $4,000 9873 $900 = Seo 348 $3500 3600 932 058 9250 9300 | 4a 9217 5247 on 0 $0: cy 2002 2003 2004 2005 2006 2007 2008 2009 soz" 2002 * 2004 ” 2006 " 2008 ” 2007 " 2002 2000 2002 2003 2004 2
Slide 5: Cumulative Stock Price Appreciation
Cumulative Stock Price Appreciation (Price as of 4/1/10) Evercore Partners Inc. 39.2 Greenhill & Co, Inc. 46.2 Jefferies Group, Inc. 203.1 Greenhill &Co., Inc. 23.5 [Goldman Sachs 33.6 Raymond James 72.5 KBW, Inc. 51 [Oppenheimer Holdings 27.6 (Goldman Sachs 59.6 Jefferies Group, Inc. 27 Lazard Lid.
Slide 6: Stifel's Growth Strategy
Stifel’s Growth Strategy >» Continue to build client facing agency-only businesses in financial services > Expand private client footprint in the U.S. > Expand institutional equity business both domestically and internationally Grow investment banking Focus on asset generation within banking operati
Slide 7: Stifel and TWP Merger
Slide 8: Stifel and TWP Today
Stifel and TWP Today v STIFEL FINANCIAL Fulkservice, publicly traded investment bank (NYSE:SF) More than 4,600 associates in 294 offices Investment Banking > 159 investment banking professionals > 14 industry focused investment banking groups > Specialty groups provide coordinated financial sponsors
Slide 9: Summary of Key Transaction Terms
Summary of Key Transaction Terms Transaction > Stifel to acquire 100% of TWP's common stock in a tax-free exchange Consideration vvvy Fixed exchange ratio of 0.1364 Stifel shares for each TWPG share No caps or collars $7.60 per share based on an SF price of $55.74 (at 4/23/10) $318 million of aggreg
Slide 10: Transaction Financials
Transaction Financials ($ in 000s, except per share) Trans action Value Calculation TWP Book Value Analysis ISF StockPrice (4723110) 555.74 Ji Renorted Hook Value (12791105). |Total Shareholders’ Equity $129,837 |TWPG Stock Price (423/10) 436 Basic Common Shares Outstanding 31,693 [Fbxed Exchange Ra
Slide 11: Why this Combination Makes Sense
Why this Combination Makes Sense Highly Complementary Investment Banking, Research and Sales and Trading Platforms > Additive, not duplicative » 623 combined offerings completed between 2005 - 2009 and only 4 overlap = 1,143 unique U.S. companies under research coverage. Only 8% overlap > Expands in
Slide 12: Building the Premier Full Service Middle-Market Investment Bank
Building the Premier Full Service Middle-Market Investment Bank > $2.0+ billion combined market capitalization > $15 billion - $1.6 billion in combined 2010E revenues “) > $1.0 billion in combined equity capital as of 12/31/09 > Coast-to-coast Institutional Equity and Fixed Income > Complementary pr
Slide 13: Dramatically Increases Investment Banking Footprint
Dramatically Increases Investment Banking Footprint > Enhances scope and scale with low level of overlap rarely available Number of Offerings 2005 — 2009 M&A Transactions 2005 — 2009 # of Transactions $ Volume (M 196 700 =i 200 995 000 $33,305 600 $30,000 190 8 600 §25,000 dawn aco $20,000 100 300 $
Slide 14: Highly Complementary Investment Banking Industry Coverage
Highly Complementary Investment Banking Industry Coverage Capital Markets Activity Between 2005 - 2009 >» Of the 623 combined offerings completed between 2005 - 2009 ONLY 4 overlap “) Industry Stifel Overlap (6B) % FIG 99 12 nn a $331 27.4% Real Estate 109 10 119 a 217 18.0% U.S. Energy and Natural
Slide 15: Highly Complementary Investment Banking Industry Coverage
Highly Complementary Investment Banking Industry Coverage Completed M&A Transactions Between 2005 - 2009 # Transactions Transaction Value” Industry ($B) % Stifel Core Competencies Real Estate 4 a 4 $86 25.9% Financial Institutions 36 3 3a 55 18.6% Industrials 13 4 7 05 14% Aerospace, Defense & Gover
Slide 16: Creates the Largest U.S. Equity Research Platform
Creates the Largest U.S. Equity Research Platform Pro Forma U.S. Research Coverage 1,143 unique U.S. companies under coverage. Only 8% overlapt") 93 senior research analysts #1 US. equities coverage #1 US. Small Cap. equities coverage @ Cover approximately 50% of the S&P 500 Combination gets Stifel
Slide 17: Enhances a Top Tier Sales and Trading Platform
Enhances a Top Tier Sales and Trading Platform > Powerful combined research presence, with excellent sales and trading relationships across regions > #11 YTD AutEx volume among investment banks on a combined basis > Strong content, combined with excellent electronic trading team and products > TWP r
Slide 18: Enhances Global Wealth Management
Enhances Global Wealth Management > Global Wealth Management > 1,900 financial advisors > TWP advisors bring deep access to Silicon Valley clients > Private Equity Group > Global Growth Partners: $890 million growth-oriented fund of funds > Healthcare Venture Partners: $122 million device-focused ve
Slide 19: Stifel's Track Record in Integrating Transactions
Stifel’s Track Record in Integrating Transactions: Low Risk Opportunity LEGG MASON RYAN BECK &CO. UBS (66 branches from UBS Financial Services) ve Vw Successfully integrated Legg's sales and trading, research and investment banking platforms to Stifel's platform Majority of Legg Mason Investment Ban
Slide 20: Stifel Overview
Slide 21: Stifel Today — Balanced Business Model
Stifel Today — Balanced Business Model 2009 Net Revenues: $1,286mm Institutional Group 52% 1% Quarter Net Revenues Annualized: $1,457mm Institutional Group 45% cw 55% Note: Allfigures are pro fonna for TWPG acquisition (1) Includes Independent Contractors, fm - Global Wealth Management 1,900 © Finan
Slide 22: Global Wealth Management
Global Wealth Management Overview Strengths of our Brokerage Position > Provides securities brokerage services and Stifel Bank products rank fares ee > 1,800 Financial Advisors in 272 branch offices in 41 states as of Se Peceacirn oe Ga Se March 31, 2010* 2 Wile Fargo Seouries St Loe, MO 471.008 > P
Slide 23: Global Wealth Management Growth
Global Wealth Management Growth | GWM Broker Growth* December 2004 Decernber 2005 Decernber 2006, December 2007 Decernber 2008, December 2009 1.885 Q 600 4,000 4,800 2,000 nancial Advisors » Since the acquisition of Butler Wick, 717 Financial Advisors have joined Stifel, 397 through both the Butler
Slide 24: Stifel Bank
Stifel Bank Overview April 2007- Acquired First Service Financial Company and its wholly-owned subsidiary FirstService Bank, a St. Louis-based Missouri commercial bank Growth since acquisition > Assets of $1.1 billion, up over 700% from $130 million at acquisition announcement > Deposits of $1.0 bil
Slide 25: Institutional Group
Institutional Group Net Revenues ($MM) eer $e00 sess (g6ag $600 $400 $295 $275 $200 $0 2004 ©2005 «20082007 aos 200g Annualized Note: Excludes TPG Asset Management revenues Equity Capital Markets ($MM) Fixed Income ($MM) $600 300 $400 $200 $200 $100 80 80 20042008 2006 ©2007-2008 2000 at 2004 2008 2
Slide 26: Institutional Group
Institutional Group vy Overview Provides securities brokerage, trading, research services, as well as underwriting and corporate advisory SF has opportunistically expanded talent pool > Victor Nesi, Director of Investment Banking and Co-Director of Capital Markets (June 2009) > William Heinzerling,
Slide 27: Equity Research Recognition
Equity Research Recognition | Overview | | Recent Stifel Research Accolades I > Largest provider of U.S. equity research > #1 in 2010 WSJ Best on the Street Survey > Stifel is the 3 largest provider prior to TWP > The most #1 ranked analysts (4) in 2010 survey > Only firm ranked in the Top 12 each y
Slide 28: 1st Quarter Highlights
Slide 29: Chairman's Comments
Chairman’s Comments “T am very pleased with our first quarter results particularly in light of the fact that net revenues, net income and earnings per share are second only to our previous record for net revenue, net income and earnings per share set in our 2009 fourth quarter. Our Global Wealth Man
Slide 30: 1st Quarter 2010 Highlights
1st Quarter 2010 Highlights > Net revenues of $312 million, a 42% increase over the 1* quarter of 2009 (1Q09) and a 2% decrease from the 4" quarter of 2009 (4Q09). >» The Global Wealth Management (GWM) segment posted net revenues of $197 million, a 73% increase over 1Q09 and a 7% increase over 4Q09.
Slide 31: Stifel Financial Corp. Income Statements
Stifel Financial Corp. Income Statements Quarter Ended % % (8 in thousands) 038140 038109 Change | 4281/09 Change Net revenues $312,030 $ 219,981 418% |$ 319,467 (23% Compensation and benefits 206,242 147,840 395% | 201,263 25% Non-comp operating expenses 66,223 49,986 325% 76,890 13999 Total non-in
Slide 32: Segment Comparison
Segment Comparison Quarter Ended % % ($ in thousands) 03/3110 03/31/09 Change 12131109 Change Net revenues: Global Wealth Management $ 197,195 $ 114,164 72.7% | $ 184,704 6.8% Institutional Group 113,292 105,472 7.4% 133,305 (15.0%) Other 1,543 345 347.3% 1,458 5.8% $ 312,030 $§ 219,981 41.8% |$ 319
Slide 33: Global Wealth Management Income Statements
Global Wealth Management Income Statements Quarter Ended % % ($ in thousands) 3/3110 3/31/09 Change | 12/31/09 Change Net revenues $197,195 $114,164 72.7% | $184,704 6.8% Compensation and benefits 109,867 64,252 71.0% | 105,147 4.5% Transition pay 14,871 8,377 77.5% 11,841 25.6% Total compensation a
Slide 34: Stifel Bank & Trust Balance Sheet
Stifel Bank & Trust Balance Sheet » Assets increased 122% to $1,115.3 million at March 31, 2010 from $503.3 million at March 31, 2009. > Investment portfolio increased $495.5 million to $549.1 million at March 31, 2010, primarily as a result of the expansion of our investment strategy + Agency MBS c
Slide 35: Institutional Group Income Statements
Institutional Group Income Statements Quarter Ended % % (8 in thousands) 373110 3R103 Change | 1273109 Change Net revenues $113,292 $105,472 7.4% | $133,305 (15.0%) Compensation and benefits 62,221 59,024 54% 70,355 (11.6%) Transition pay 4,083 3.494 16.9% 3,229 26.4% Total compensation and benefits
Slide 36: Institutional Group Revenues
Institutional Group Revenues Quarter Ended % % (8 in thousands) 3/310 31/09 Change | 121/09 Change Sales and trading: Equity $ 38,651 $ 36,787 5.1% | $ 38,668 (0.0%) Fixed income 44,346 53,448 (17.0%) 47,308 (6.3%) 82,997 90,235 (8.0%) 85,976 (3.5%) Investment Banking: Capital raising 20,004 3,429 4
Slide 37: Statement of Financial Condition Graphs
Statement of Financial Condition Graphs $4,000 $1,250 $3,000 $1,000 $750 $2,000 $500 $1,000 $250 $0 $0 + 2003 = 2004-2005 2006 «= 2007 2008 §=— 2009» QI 2010 2003 2004 2005 a r 2007 3 2008 = 2009 QL 2010 - Total Capitalization (¢ mitions) Total Assets (s mittions) Defined as stockholder’ s equity pl
Slide 38: Capital Structure
Capital Structure As of March 31, 2010 (in thousands, except percentages and ratios) Total Assets $3,227,383 Stockholders’ Equity $ 912,404 Debentures to: Stifel Financial Capital Trust II - LIBOR plus 1.70% (fixed at 6.38% until 9/30/10), due 9730. $ 35,000 Stifel Financial Capital Trust III - LIBO
Slide 39: Level 3 Assets
Level 3 Assets Carrying Value (3 in thousands) 3/31/10 12731409 Change Auction Rate Securities (ARS) $ 75,691 $ 56,003 35.2% Stifel Bank & Trust Investments - 2,693 (100.0%) Trading Securities 7,042 1,243 466.5% Other Investments 5,418 5,426 (0.1% Level 3 assets (excluding ARS) 12,460 9,362 366.4% T
Slide 40: Other Financial Data
Other Financial Data Total assets (000s): Stifel Nicolaus and Stifel Financial Stifel Bank Shareholders’ equity(000's ) Book value per share Financial advisors* Fulltime associates Locations Total client assets (000's) * Includes all retail Financial Advisors, As of %Change Q110vs. Qt 10 vs. 3R1H0 1
Slide 41: Pro Forma Effect of Unit Awards Modification
Pro Forma Effect of Unit Awards Modification Shareholders’ Outstanding Book (in thousands, except share and per share data) Equity Shares Value March 31, 2010, as reported $ 912,404 30,926,500 $ 29.50 Assume unit vesting and conversion 60,454 4,710,450 12.83 Pro forma $ 972,858 35,636,950 $ 27.30 Ch
Slide 42: Looking Forward
Slide 43: We See Opportunity
We See Opportunity Stifel is well-positioned in the current market: » Dislocation creating opportunity for market share gains >» Ability to add talented professionals > Expand Fixed Income/High Yield » Evolving regulatory framework (Stifel is already regulated by the Fed) > Expand Traditional Asset
Slide 44: Driving Value for Stakeholders
Driving Value for Stakeholders > Expands services across Institutional Group and Global Wealth Management platforms > Broader industry focus > Deeper talent pool for serving clients > Complementary investment banking and research platforms with almost no overlap provide continuity of client facing p
Slide 45: Q&A