Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q3 2011 Earnings Presentation
23 slides from Stifel Financial's earnings presentation, Nov 9, 2011
Slide 1: 3rd Quarter 2011 Financial Results Presentation
34 Quarter 2011 Financial Results Presentation November 9, 2011 STIFEL WININNGUNG
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: Non-GAAP Financial Measures
Non-GAAP Financial Measures The company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax ma
Slide 4: Chairman's Comments
Chairman’s Comments “Our third quarter demonstrates the importance of a balanced business model, particularly in a volatile environment. While not immune to the current macroeconomic headwinds, our Global Wealth Management segment generated impressive results, while the dearth of capital markets act
Slide 5: 3Q11 Overview: Macroeconomic Headwinds
Macroeconomic Headwinds 3Q11 Overview Downgrade of the U.S. debt rating by Standard & Poors in August European sovereign debt issues Weak employment and housing data Speculation of a double-dip recession Market Performance The S&P 500, Nasdaq, Dow and Russell 2000 declined 14%, 13%, 12% and 22%, res
Slide 6: Financial Results
Financial Results
Slide 7: Stifel Financial Corp. Results: Three months ended September 30, 2011
Stifel Financial Corp. Results Three months ended September 30, 2011 ‘Three MonthsEnded GAAP Non-GAAP * Non-GAAP * {$ in thousands, except per shore amounts} 9/20/11 9/30/10 Change = 6/20/11. Change Net revenues $ maze $ 341207 (21%) |$ 35896 © (6.9%) Compensation and benefits 210,573 212,760 (1.0m)
Slide 8: Stifel Financial Corp. Results: Nine months ended September 30, 2011
Stifel Financial Corp. Results Nine months ended September 30, 2011 Nine Months Ended September30, 2011 Nine Months Ended 9/30/10 % {$ in thousands, except per share amaunts) GAAP Nor-core "Non-GAAP (Non-GAAP) Change” Net revenues $ 105964 6 § 112, «$ «1059796 «= § = (981,366 2.0% ‘Compensation and
Slide 9: Source of Revenues
Source of Revenues Quarter Ended Mine Months Ended * * petoenit spon 910 mee gf XChree | ont —ofay10 Charge Commissions $120 $96,986 Th §$ 138315 ask |S 497384 S$ 30,65 1% Principal transactions 7650 123,194 (37.8%) 77a ax aaa 363,537 (ALAN) Asset met and service fees sansa 5087 «145% 56,981 22% mga
Slide 10: Brokerage Revenues
Brokerage Revenues (Quarter Ended Nine Months Ended ™ ™ ™ (Sin deems} sro gyscnio Chance gysoyi1—Chanee | oysysa —gaoyi0— Shae Principal transactions: Taxable debt S$ 41871 $ @20R (USK) $ 44m0 (27K)|$ 195310 $ 1m0CF PEI) ‘Municipal debt 19,355 mo (8am) RHO ex | E72 56.964 13% Equities oar 7829 (6.76
Slide 11: Investment Banking Revenues
Invest t Banking Revenues Quarter Ended Nine Months Ended * * * £8 in thousands) 9/30/11 gpsofio Change gy30fi1_—— Change | 9/20/11 gfsofi0 Change Capital raising $ w7s4 S$ 28593 (117K) $ 39,689 (364%)/$ 97,301 $ 84,613 15.0% Advisory 12419 73063 _ (46.2%) 24,729 _(49.8%)| 46,208 42,516 am $ 37673 $
Slide 12: Core Compensation & Benefits
Core Compensa & Benefits (% of Net Revenue) 70.0% 65.0% 60.0% + 55.0% ~ 50.0% = 1stQtr 2nd Qtr 3rd Qtr 9 Months 2010 =2011 STIFEL FINANCIAL
Slide 13: Core Non Comp Operating Expenses
Core Non Comp Operating Expenses ($ Millions) $249 $250 $200 $150 $100 $50 | $0 5 1stQtr 2nd Qtr 3rd Qtr 9 Months 2010 @2011 STIFEL 12 FINANCIAL
Slide 14: Core Segment Comparison
Core Segment Comparison Quarter Ended Mine Months Ended * ~ * (8 in thousands} 9/30/11 970/10 Change 6/30/11 Change | 9/0/11 9730/10 Change (Net revenues: Global Wealth Management $ 219,498 $ 207,484 58% $ 225,645 (27%) |$ e8g589 $ 606,845 126% Institutional Group 113,259 138,043 (18.0%) 132,915 (14
Slide 15: Global Wealth Management
Global Wealth Management Quarter Ended Mine Months Ended {Sin thousands) 930/11 9780/1D MChamge 6/30/11 % Change | 9/30/11 9/30/10 % Change Commissions S$ 9209 $ 69875 317% $ 8593 (LIK) |S 287,381 $ 228983 255% Principal transactions 4236 62,785 (22.2%) 51263 (47%) | 156,262 181331 (13.8%) Asset man
Slide 16: Stifel Bank & Trust
Stifel Bank & Trust (an operating unit of GWM) Quarter Ended Nine Months Ended ($ in thousands) 9/30/11 9/30/10 %Change 6/30/11 %Change | 9/30/11 9/30/10 %Change Net revenues: Interest 15,230 9601 58.6% 13419 13.5% 39852 25859 541% Other income 6536 1924 _ 239.7% 2943 _1221% |_11,411 5099 _ 123.3% T
Slide 17: Stifel Bank & Trust: Low Risk Asset Growth Strategy
Stifel Bank & Trust (an operating unit of GWM) Low Risk Asset Growth Strategy & Opportunit > Assets of $2.3 billion as of September 30 2011, an increase of > Maintain solid asset quality: 30.4% from December 31, 2010. > Non-performing loans to gross loans of 0.22% > Investment portfolio of $2.3 bill
Slide 18: Institutional Group
Institutional Group Quarter Ended Nine Months Ended (Sin thousands} spon 9/30/10 % Change 6/30/11 Change | 9730/1 9/30/10 % Charge Commissions $ maze $ man mx $44,721 yam |$ 199co $ 76672 555X Prindpal transactions ams eae A) 28,077 23x} 2,958 182,205 (49.0%) Investment banking 3,985 5538 (EX) 58,00
Slide 19: Institutional Group Revenues
Institutional Group Revenues Quarter Ended Nine Months Ended (in thousands} spon. —9yao0 Chm Gyan. Chane | gy3son1 —gyzoyio, Change Sdles and trading: Equity $ amass $43,711 79% $ 41,695 132% /$1M1278 — $ 126,462 117% Fixed income 31808 43808 27.3%) 31,503 1a% | 101670 132416 (232%) 79,923 37519 am
Slide 20: Stone & Youngberg
Stone & Youngberg Stifel to acquire 100% of the membership interests of Stone & Youngberg LLC Strategic Rationale Expands Stifel’s public finance, institutional sales and trading, bond underwriting, particularly in Arizona and California, and adds more than 30 financial advisors Builds a national pu
Slide 21: Financial Condition
Financial Condition
Slide 22: Other Financial Data
Other Financial Data Asof As of spso/11 9/30/10 %Change 6/30/11 %Change Total assets (000s): Stifd Nicolaus &Stifel Financial $ 2,630,993 $ 2,614,225 06% $ 2,705,749 ean Stifd Bank 2.311371 1,516,489 S2A% 1,807,859 29% Total assets Sasarzea $4,130,714 195% $ 4,513,608 95% Tota! shareholders’ equly 0
Slide 23: Level 3 Assets
STIFEL Level 3 Assets Carrying Value {S$ io thousands) 9Ofs0fi1 12/31/10 Auction Rate Securities (ARS) © $137,871 94,795 Stifel Bank & Trust Investments 12,000 - Trading Securities 1,201. 40,243 Other Investments 37,603 38,502 level 3assets (exduding ARS) 50,804 BS Total Level 3assets $ 188675 173,5