Stifel Financial Corporation · NYSE:SF
Stifel Financial — KBW Winter Financial Services Symposium 2019
42 slides from Stifel Financial's conference presentation, Feb 14, 2019
Slide 1: Investor Presentation – KBW Winter Financial Services Symposium
Investor Presentation KBW Winter Financial Services Symposium February 14-15, 2019
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 2,301 financial $30B in total $17.8B in assets Experienced s
Slide 5: A History of Growth
A History of Growth 2018 2017 Ziegler Wealth 2016 City 2015 Eaton Partners Securities Management, Business Barclays Wealth & ISM Capital Bancshares Inc. 2014 Investment Management, First Empire De La Rosa, Sterne Agee, Oriel Securities, 2013 1919 Investment Counsel, Acacia Bank & Ziegler Merchant Ca
Slide 6: Substantial Performance Improvement in 2018
Substantial Performance Improvement in 2018 millions 2018 2017 Change millions 2018 2017 Change Income Statement Balance Sheet Total net revenue $3,025 $2,928 3% Total assets $24,520 $21,384 15% Pre-tax income $592 $501 18% Bank assets $17,819 $14,996 19% Net income available to common share holders
Slide 7: Driving Shareholder Value Through Deal Integration & Balance Sheet Growth
Driving Shareholder Value Through Deal Integration & Balance Sheet Growth 7
Slide 8: Balance Sheet Growth
Balance Sheet Growth $24,520 $25,000 $23,760 $22,608 $21,715 $21,384 $20,000 $19,129 Infrastructure Build Total Assets in Millions $15,000 $13,326 $9,518 $10,000 $9,009 $6,966 $4,952 $5,000 $4,213 $3,167 $1,558 $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 2Q18 3Q18 4Q18 ` 2008 2009 2010
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.) 12/31/2017 12/31/2018 Loans: Total consolidated assets $21,384 $24,520 • Comprised of securities based loans, C&I, and Investmen
Slide 10: Stifel Overview
Stifel Overview STIFEL 10
Slide 11: Stifel – Premier Investment Bank and Wealth Management Firm
Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance 2018 GAAP Net Revenue - $3.0 billion Global Wealth Management (GWM) Institutional Group (IG) 2018 Net Revenue - $2.0 billion 2018 Net Revenue - $1.1 billion Private Client Equity & Fixed Income Capital Raising Stife
Slide 12: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Bulge Bracket Boutique Size / scale Firm focus Large distribution Good research Size / scale Trading Growth investor access Firm focus Retail Issues Stability (financial & pers
Slide 13: Well-diversified, Low Risk Business Model
Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institu
Slide 14: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues ($MM) Total Equity ($MM) $3,500 $3,500 $3,025 $3,198 $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 $1,384 $1,417 $1,495 $1,500 $1,500 $1,091 $1,254$1,
Slide 15: Global Wealth Management
Global Wealth Management STIFEL
Slide 16: 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 2,301 financial advisors currently Proven organic growth and acquirer of private client business Strategy of recruiting experi
Slide 17: Building Scale and Capabilities into a $2.0B Revenue Segment
Building Scale and Capabilities into a $2.0B Revenue Segment 55 advisors managing ~$5B in AUM March 2018 ~40 advisors managing ~$4B in AUM January 2017 ~100 advisors managing over $20B in AUM December 2015 Private Client ~130 advisors managing ~ $10B in AUM June 2015 Customized inv
Slide 18: GWM - Private Client Group
GWM - Private Client Group Key Operating Metrics Financial Advisors(1) Branches(1) 2,500 2,291 2,282 2,301 400 2,244 361 360 369 355 2,077 2,103 1,987 2,041 350 330 1,885 1,935 317 2,000 307 285 291 300 272 1,500 250 1,315 196 1,163 200 1,000 148 150 100 500 50 0 0 2007 2008 2009 2010 2011 2012 2013
Slide 19: GWM – Stifel Bancorp, Inc.
GWM – Stifel Bancorp, Inc. Overview Key Statistics (000s) (1)(2) Acquired FirstService Bank, a St. Louis-based, Missouri- Total assets $17,819 chartered commercial bank, in April 2007 Total deposits 15,864 Stifel Financial became a bank holding company and Total equity 1,233 financial services h
Slide 20: Growing Asset Management Capabilities
Growing Asset Management Capabilities Asset Management Subsidiaries with Over $30 Billion in Client Assets Assets $11.5 Billion $12.1 Billion $3.8 Billion $2.5 Billion Chicago Baltimore Milwaukee Birmingham Baltimore Offices New York Cincinnati Florham Park, NJ Boston St. Louis New York San Francisc
Slide 21: Institutional Group
Institutional Group STIFEL
Slide 22: Institutional Group
Institutional Group Overview Net Revenues ($MM)(2)(3)(4) $1,200 Provides securities brokerage, trading, research, underwriting and $1,014 $1,111 $1,055 corporate advisory services $997 $976 $900 $861 Largest provider of U.S. Equity Research $668 $626 $605 3rd largest Equity trading platform in t
Slide 23: 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 July 2010 Core of our Institutional sales, trading and research group December 2005 Enhances European debt capital markets capabilities February 2016 Equities Hig
Slide 24: Institutional Group – Advisory
Institutional Group – Advisory 2010-2019 YTD: Leadership in M&A of Public Companies and deals < $1bn. All Deals < $1 Billion in Value Public Deals < $1 Billion in Value All Firms Middle Market Firms Source: Dealogics M&A Analytics as of 1/31/19. Note: Includes all sell-side and buy-side strategic or
Slide 25: Institutional Group – Equity Underwriting
Institutional Group – Equity Underwriting Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 JPMorgan 1,940 $1,033.
Slide 26: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1)(2) Stifel Research Highlights Largest provider of U.S. Small & Mid-cap Equity Research² #1 U.S. provider of Financial Services coverage Ranked #3 out of 152 qualifying U.S. firms with 18 Thom
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 65 person sales force 21 sales traders located in Baltimore, New York, Boston, San Experts in small and mid cap growth and value Francisco, and London
Slide 28: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Overview Client Distribution (1)(2) Comprehensive platform Other 9% Broker/Dealer 85 traders with annual client trade volume approaching 5% $500 billion Insurance Co. 40-person Fixed Income Research a
Slide 29: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel Public Finance has ranked #1 Specialty sectors: nationally in senior managed, negotiated Education municipal issues for each of the past five years, including again in2018. Local Government/Municipal Healthcare More than on in every 10 t
Slide 30: Fourth Quarter & 2018 Results 2019 Outlook
Fourth Quarter & 2018 Results 2019 Outlook 30
Slide 31: Fourth Quarter & 2018 Results 2019 Outlook
Fourth Quarter & 2018 Results 2019 Outlook millions 4Q18 Actual 4Q18 Guidance 2018 Actual 2018 Guidance 2019 Estimate Operating Net Revenue $667 $637 - $673 $2,549 $2,519 - $2,555 $2,520 - $2,800 Net Interest Income $127 $123 - $127 $476 $473 - $477 $530 - $550 Net Revenue $794 $760 - $800 $3,025 $2
Slide 32: Highlights & Full Year Results
Highlights & Full Year Results • 23rd Consecutive Year of Record Net Revenue of $3.025 billion, • Non-GAAP Comp. Ratio of 58%, down 320 bps up 3% • Non-GAAP Pre-tax Margin of 19.6%, up 250 bps • Record GAAP EPS of $4.73, up 121% • Repurchased nearly 3.4 million shares at an average price of • Record
Slide 33: Highlights & Fourth Quarter Results
Highlights & Fourth Quarter Results • Non-GAAP Net Revenue of $794 million, up 7% Q/Q. • Non-GAAP Comp. Ratio of 56%, down 400 bps Y/Y • Record Asset Management & Services Fees of $210 million, up • Non-GAAP Pre-tax Margin of 21.9%, up 180 bps Y/Y 13% Y/Y. • Non-GAAP ROCE of 16.7% & Non-GAAP ROTCE o
Slide 34: Segment Results
Segment Results STIFEL
Slide 35: Global Wealth Management
Global Wealth Management GWM Net Revenue Y/Y Sequential Y/Y $500 millions 4Q18 Change Change 2018 Change $400 Global Wealth Management Revenue Net Revenue (mil) Commissions $117 -1% -1% $472 -1% $300 Principal Transactions $40 -11% -2% $166 -11% $200 Brokerage $157 -4% -1% $638 -4% $100 Asset Manage
Slide 36: Institutional Group
Institutional Group Y/Y Sequential Y/Y millions 4Q18 Change Change 2018 Change Institutional Group Net Revenue Ins titutional Revenue $350 Equity GAAP Net Revenue (mil.) $300 Advisory $108 -9% 48% $358 4% $250 Underwriting $52 -10% -20% $214 17% $200 Brokerage $49 -2% 11% $186 -7% $150 $100 Equity C
Slide 37: Revenue & Expenses
Revenue & Expenses STIFEL
Slide 38: Brokerage Revenue and Asset Management & Service Fees
Brokerage Revenue and Asset Management & Service Fees Brokerage Revenue Three Months Ended YTD (000s) 4Q18 4Q17 % Change 3Q18 % Change 2018 2017 % Change Global Wealth Management brokerage revenue $157,331 $163,421 -4% $158,818 -1% $638,173 $661,334 -4% Institutional brokerage: Equity Capital Market
Slide 39: Investment Banking Revenue
Investment Banking Revenue Investment banking: Three Months Ended YTD (000s) 4Q18 4Q17 % Change 3Q18 % Change 2018 2017 % Change Capital raising: Global Wealth Management revenue $7,915 $8,899 -11% $7,722 3% $31,293 $40,466 -23% Equity Capital Markets 51,839 57,800 -10% 65,000 -20% 213,633 182,728 1
Slide 40: Net Interest Income
Net Interest Income Average Yields on Balance Sheet Net Interest Income Growth 4Q18 4Q17 Change 3Q18 %Change $140 $127 $117 $121 Assets: $120 $107 $111 Bank loans 4.11% 3.27% 84 bps 3.88% 23 bps Net Interest Income (mil.) $100 Commercial 4.79% 3.86% 93 bps 4.62% 17 bps $80 Securities based 4.18% 3.1
Slide 41: Stifel Bancorp, Inc.
Stifel Bancorp, Inc. % % (mil. except for %'s) 4Q18 4Q17 Change 3Q18 Change Assets: Mortgage Loans 2,875 2,594 11% 2,792 3% Commercial Loans 3,304 2,438 36% 3,127 6% Securities Based Loans 1,787 1,819 -2% 1,836 -3% Commercial Real Estate 319 116 175% 329 -3% Loans Held for Sale 206 226 -9% 262 -21%
Slide 42: Expenses
Expenses Non-GAAP Expenses & Three Months Ended Full Year Compensation Ratio % % % Pre-tax Income 61.0% 60.5% 60.0% 4Q18 4Q17 Change 3Q18 Change 2018 2017 Change 60.0% 59.0% (millions) 59.0% Compensation $444 $483 -8% $417 7% #DIV/0! $1,753 $1,791 -2% 58.0% 57.0% 56.5% Non-compensation $175 $160 9%
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