Stifel Financial Corporation · NYSE:SF
Stifel Financial — Merger or Acquisition (September 2005)
40 slides from Stifel Financial's merger presentation, Sep 15, 2005
Slide 1: Investor Presentation
Investor Presentation N call
Slide 2: Forward Statements
Forward Statements This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this presentation not dealing with historic
Slide 3: Participants
Participants Stifel Financial Ron Kruszewski Chairman and CEO Jim Zemlyak CFO Leqg Mason Capital Markets Dick Himelfarb Director, Investment Banking Tom Mulroy Director, Equity Capital Markets Joe Sullivan Director, Fixed Income Capital Markets Hugh Warns Director, Research Stifel, Nicolaus LEGG MAS
Slide 4: Create a Premier Independent Investment Banking and Brokerage Firm
Create a Premier Independent Investment Banking and Brokerage Firm Combine the Best of Stifel Nicolaus with the talents of Legg Mason's Capital Markets Group
Slide 5: Why Does this Make Sense? Consolidation
Why Does this Make Sense? Consolidation Consolidation ® Consolidation has forced companies to abandon the Alex. Brown Morgan Keegan & Company . Chicago Corp. Oppenheimer & Co. middle market C.J. Lawrence PaineWebber e . age Cowen & Co. Ragen MacKenzie There is a void in the market we Dain Rauscher R
Slide 6: The Middle Market Opportunity
The Middle Market Opportunity
Slide 7: Why Does this Make Sense? Associate Buy In
Why Does this Make Sense? Associate Buy In ° Over 90% of Senior * Legg Capital Markets Professionals have personnel will be offered the signed on to join the opportunity to purchase $25 new firm million of Stifel equity via 100 private placement 75 50 25 Stifel, Nicolaus ‘& Company, Incorporated Pag
Slide 8: Stifel is a growing firm
Stifel is a growing firm 9 Years of Record Net Revenues 2004 ROE 20 % 2005 Pre Tax Margins 15 % 625 PCG Sales Professionals and 91 Stifel Nicolaus offices Diversified Private Client Base Strong Regional Public Finance Excellent FIG Investment Banking Best of Breed Technology Entrepreneurial Culture
Slide 9: Stifel has outperformed the major indexes over trailing periods
Stifel has outperformed the major indexes over the trailing 1, 3, and 5 year periods
Slide 10: Legg Mason Capital Markets overview
Legg Mason Capital Markets is the Capital Markets arm of Legg Mason Wood Walker This subsidiary is being divested as part of Citigroup Legg Mason transaction
Slide 11: Legg Mason Capital Markets Net Before Allocated Expenses
Legg Mason Capital Markets Net Before Allocated Expenses (NBA) NBA Profit Margin
Slide 12: The Combined Firm
The Combined Firm ° The largest domestic Equity Research franchise off Wall Street ° Approximately 1,800 employees in 113 offices in US and Europe e Highly Regarded Private Client Group Manages $24 billion in Client Assets ® Since 2000 * 583 Public Offerings ($142B) a ® 262 M&A Transactions ($15B) *
Slide 13: Equity Research
A & 39; Incorporated Equity Research LEGG MASON
Slide 14: Research Model
Research Model We are an award winning, stock picking, idea shop, that Consistent winner in WSJ Best of the Street and Forbes.com/Starmine focuses on all market caps, but is a leader in Small and Mid cap. Cover the entire spectrum from emerging to mega cap blue chips We revel in our Off Wall Street
Slide 15: Research is the Key
Research is the Key 54 Analysts (combined firm) Over 670 stocks covered 38 product teams in 8 sectors 3-Tier Rating System
Slide 16: Intellectual Capital Ranked Research Group by Awards
Intellectual Capital 3 Ranked Research Group by Awards from 2005 WSJ Poll 1 Batting average for firms with more than 35 Analysts
Slide 17: Opportunistic Research Coverage Model
Opportunistic Research Coverage Model
Slide 18: Industry Expertise is Key
Industry Expertise is Key e Our Thought Leaders include: > Former Chief of Staff to the FCC Chairman CEO of Railroad Services Company Senior OCC Bank Regulator Nursing Home Administrator Softlines Retail Senior Executive Senior Healthcare Benefits Consultant 2 P&C Insurance Actuaries CFO — Publicly
Slide 19: Our Research Platform
Our Research Platform
Slide 20: Equity Sales and Trading
Equity Sales and Trading Stifel, Nicolaus LEGG MASON ‘& Company, Incorporated Page 19 CAPITAL MARKETS.
Slide 21: Sales & Trading Locations
Sales & Trading Locations Chicago 3professionals Cleveland 5 professionals Boston 10 professionals New York 26 professionals Baltimore 76 professionals / Atlanta Sen crancacs 3 professionals Sprofessionals Denver / / 12 Professionals a International Kansas City 4 Professionals London 5Professionals
Slide 22: Equity Sales and Trading
Equity Sales and Trading Deliver differentiated ideas and information Add value through knowledge, not capital commitment Aim to be a top provider of equity research and sales & trading Stable model - continuity of coverage Sales teams of 2 - 4 people 24 coverage traders based in Baltimore, Clevelan
Slide 23: Investment Banking
Investment Banking LEGG MASON
Slide 24: Investment Banking
Investment Banking The combined firm will have over 100 Professionals in 7 vertical industry groups and 3 focused product groups As a result of the combination, investment banking gains a much broader industry footprint
Slide 25: Public Offering Summary
Public Offering Summary Transaction Number of Dollars Raised Transactions ($MM) Public Stock Offerings 268 $48, 106 (IPOs and Follow-ons) Preferred Offerings 124 $12,765 Public Debt Offerings 48 $11,549 Total 540 $72,422 Combined firms since January 1, 2000. Transactions Lead or Co managed (excludes
Slide 26: M&A and Private Placement Summary
M&A and Private Placement Summary
Slide 27: Fixed Income
Fixed Income Stifel, Nicolaus LEGG MASON & Company, Incorporated Page 26 CAPITAL MARKETS
Slide 28: Fixed Income Capital Markets
Fixed Income Capital Markets Stifel has an Excellent Municipal Business but ... No Taxable Sales & Trading 67 Institutional Sales and Trading Professionals Expertise in Municipal, residential MBS CMBS, Corporate and Government Trading Strong Public Finance Broad institutional coverage Deep relations
Slide 29: Institutional taxable fixed income sales and trading
67 institutional taxable fixed income sales and trading professionals with over 1,600 active institutional taxable fixed income clients Average daily taxable trade volume in excess of $250 million, with annual taxable trade volume exceeding $66 billion Institutional Investor All-Star nominated Taxab
Slide 30: Transaction Summary
Transaction Summary LEGG MASON
Slide 31: Transaction Structure
Transaction Structure Transaction Type ....Asset Purchase Transaction Structure: Assets Acquired & Liabilities Assumed Purchase of Net Trading Inventory at Fair Value (Estimated at $25 - $50 million of liquid marketable securities) (1) Purchase of Net Assets estimated at $6 - $8 million (Primarily f
Slide 32: Consideration
Consideration Estimated Net Fixed Assets............ $6,000 $8,000 Cash at Closing (Premium to Net Assets).. $7,000 $7,000 3) YearEarniOutgesyrle se ey ae - $30,000 PV of Tax Benefit (1)...............5. ($3,602) ($10,413) After Tax Consideration.............. $9,398 $34,587 (1) Deal allows goodwill
Slide 33: Other Incentives Stock Units
Other Incentives Stock Units
Slide 34: Estimated Share Issuance Units
Estimated Share Issuance Units Diluted private placement
Slide 35: Transaction Success Factors
Transaction Success Factors Financial People Integration
Slide 36: Net Revenue Diversification
Net Revenue Diversification
Slide 37: A Powerful, Balanced Combination
A Powerful, Balanced Combination
Slide 38: Proforma Ownership
Proforma Ownership 20% 16% OInsider OC Institutional HM Other
Slide 39: Today's Market
Today's Market Geaorantaes eo ee ed
Slide 40: Appendix A: About Stifel Financial Corp.
Appendix A Stifel Financial Corp. is the parent company of Stifel, Nicolaus & Company, Incorporated, a regional, full-service brokerage and investment banking firm founded in 1890 and headquartered in St. Louis, Missouri, which operates 91 offices in 17 states, mostly in the central United States. A
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