Stifel Financial Corporation · NYSE:SF

Stifel Financial — Investor Presentation (September 2012)

37 slides from Stifel Financial's investor presentation, Sep 13, 2012

  1. Slide 1: Stifel Financial Investor Presentation

    Stifel Financial Investor Presentation September 2012

  2. Slide 2: Disclaimer

    Disclaimer Table of Contents 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 op

  3. Slide 3: Market Overview

    STIFEL FINANCIAL Market Overview

  4. Slide 4: Market Overview

    Market Overview Average Daily Share Volume ($M) Equity Mutual Fund Flows ($B) $40 28 5,000 NYSE NASDAQ $20 4,000 $0 2,135 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 2,053 3,000 1,995 1,825 ($20) -10 1,802 1,764 -18 -22 2,000 ($40) 1,578 1,698 1,000 1,383 1,412 ($60) 1,202 1,234 -64 ($80) 0 -81 Q1 11 Q2 11

  5. Slide 5: Markets Going Forward

    Markets Going Forward Yield 1/3/11 3/31/11 6/30/11 9/30/11 12/31/11 3/31/12 6/30/12 Current S&P 500¹ 7.2% 7.0% 7.2% 8.3% 7.6% 7.4% 7.6% 7.1% 10 YR 3.3% 3.5% 3.2% 1.9% 1.9% 2.2% 1.7% 1.7% Risk premium² 3.8% 3.5% 4.0% 6.4% 5.7% 5.2% 6.0% 5.5% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 1/3

  6. Slide 6: Strategy

    STIFEL FINANCIAL

  7. Slide 7: Successful Growth Strategy

    Stifel Financial Successful Growth Strategy Net Revenues & Market Cap Growth $2,500 Net Revenue Market Cap $2,000 ($ in millions) $1,500 $1,000 $500 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Strategy Position the Company to take advantage of opportunities.  Unburdened by capital constraints 

  8. Slide 8: Stifel's Differentiated Value Proposition: Scale, Investor Clout, Focus

    Stifel Financial Overview Stifel’s Differentiated Value Proposition: Scale, Investor Clout, Focus Bulge Bracket Middle Market  Size / scale  Size / scale  Firm focus  Large distribution  Firm focus  Good research  Investment Banking  Stability (financial &  Growth investor access  Retail p

  9. Slide 9: Execution of Strategy Impacts Margins

    Execution of Strategy Impacts Margins 2012 Investments: • Hired 103 financial advisors YTD • Opened 12 private client offices YTD and 25 since 1/1/2011 • Building our fixed income sales and trading operations Hired 52 professionals • Selectively hired professionals in areas we see opportunity Senior

  10. Slide 10: Legacy Business vs. Investments

    Legacy Business vs. Investments ($ in thousands, except per share amounts) 6M 2012 Legacy¹ Investments Total Net revenues 760,512 14,228 774,740 Compensation and benefits 476,560 17,518 494,078 Non-comp operating expenses 166,658 10,875 177,534 Total non-interest expenses 643,219 28,393 671,612 Inco

  11. Slide 11: Stifel Financial Overview

    STIFEL FINANCIAL Stifel Financial Overview

  12. Slide 12: Stifel Financial Overview

    Stifel Financial Overview Stifel Financial (NYSE: SF) Financial services firm demonstrating growth, scale and stability  $1.9 billion market capitalization(1)  2011 Represented our 16th year of consecutive record net revenues  Balanced business model  Top performing financial stock over the past

  13. Slide 13: A Growth Story

    Stifel Financial Overview A Growth Story… Net Revenues ($MM)(1) Core Net Income ($MM)(1) Total Equity ($MM)(1) $1,500 $1,382 $1,417 $150 $1,600 CAGR: 26% CAGR: 23% CAGR: 36% $1,372 $125 $1,200 $120 $114 $1,254 $1,302 $1,091 $1,200 $870 $900 $763 $775 $90 $873 $73 $76 $67 $800 $61 $600 $60 $593 $452

  14. Slide 14: Building Scale: Strategic Growth Through Acquisitions

    Stifel Financial Overview Building Scale… Strategic Growth Through Acquisitions  Investment Banking  Sales and Trading 2005¹ 6/30/12  Private Client Retail  October 2011  Financial Advisors 467 2,028 Brokerage  Private Client Branches 94 301 Network  Investment Banking  Sales and Trading  R

  15. Slide 15: Stability Achieved Through A Balanced Business Model

    Stifel Financial Overview Stability Achieved Through A Balanced Business Model  Balanced business model facilitates growth during volatile markets  Stable GWM business is augmented by profitable and growing Institutional Group  Proven ability to grow all businesses Net Revenues Operating Contribu

  16. Slide 16: Cumulative Price Appreciation

    Stifel Financial Overview Cumulative Price Appreciation As of August 31, 2012 Since 12/31/11 Since 12/31/07 Since 12/31/02 FBR & Co. 47.80% Stifel Financial Corp. 39.87% Stifel Financial Corp. 780.07% Edelman Financial 34.25% Evercore Partners 14.62% Raymond James Financial 167.75% Piper Jaffray 21.

  17. Slide 17: Statement of Financial Condition

    Statement of Financial Condition As June 30, 2012 Total Assets ($ in Billions) Total Capitalization ($ in Billions) $7.0 $1.8 $6.1 $1.6 $6.0 $1.5 $0.2 $1.3 $1.4 $5.0 $0.1 $5.0 $0.1 $0.1 $4.2 $1.2 $4.0 $1.0 $3.2 $0.9 $0.1 $3.0 $0.7 $0.5 $0.1 $1.3 $1.3 $1.4 $0.6 $2.0 $1.5 $1.6 $0.1 $0.9 $0.3 $1.1 $0.3

  18. Slide 18: Global Wealth Management

    STIFEL FINANCIAL Global Wealth Management

  19. Slide 19: Global Wealth Management

    Global Wealth Management Provides Securities Brokerage Services and Stifel Bank Products Overview  Grown from 600+ financial advisors in 2005 to over 2,000(1) financial advisors currently  Proven organic growth and acquirer of private client business (56 UBS branches, Butler Wick, Ryan Beck)  Ret

  20. Slide 20: Global Wealth Management: Opportunity Through Growth

    Global Wealth Management Opportunity Through Growth GWM Broker Growth (1) GWM Branch Growth 2,400 350 1,987 2,028 301 1,935 300 285 291 2,000 1,885 272 250 1,600 1,315 196 200 1,163 1,200 148 150 735 111 800 100 400 50 0 0 2006 2007 2008 2009 2010 2011 6/30 2006 2007 2008 2009 2010 2011 6/30 GWM Acc

  21. Slide 21: Global Wealth Management – Stifel Bank & Trust

    Global Wealth Management – Stifel Bank & Trust Overview Strength of Brokerage Position  Acquired FirstService Bank, a St. Louis-based,  Offers banking products (securities based loans and Missouri-chartered commercial bank, in April 2007 mortgage loans) within the GWM client base, including establ

  22. Slide 22: Institutional Group

    STIFEL FINANCIAL Institutional Group

  23. Slide 23: Institutional Group

    Institutional Group Overview Net Revenues ($MM)(2) $800 CAGR: 20% (3)  Provides securities brokerage, trading, research, $668 underwriting and corporate advisory services $587 $626 $600 $559 $507  One of the largest providers of U.S. Equity Research $455 $400  2nd largest Equity trading platform

  24. Slide 24: Institutional Group – Research

    Institutional Group – Research Third Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Stifel Research Highlights Companies Under Coverage  3rd largest provider of U.S. equity research Rank Firm Overall Small Cap(2)  2nd largest provider of US small cap equity coverage 1 JPMo

  25. Slide 25: Institutional Group – Research: Proven, Consistent Research

    Institutional Group – Research Proven, Consistent - Qualitative Research Research Model Award Highlights  >50% of analysts worked in the field they  #3 (tied) in 2012 FT/StarMine Survey cover  Most #1 awards in 2011 FT/StarMine Survey  ~35% of analysts initially joined as associates  Most top 1

  26. Slide 26: Institutional Group – Equity Sales and Trading

    Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading  96 person sales force, commission based  34 coverage traders located in  Experts in small and mid cap growth and value  Baltimore, New York, Boston, Dalla

  27. Slide 27: Institutional Group – Fixed Income

    Institutional Group – Fixed Income Strong Fixed Income Capital Markets Capabilities Overview Client Distribution (1)(2)  Comprehensive platform All Other Bank/Thrift/  86 traders with annual client trade volume 6% Credit Union approaching $275 billion 22%  17 dedicated fixed income strategists 

  28. Slide 28: Institutional Group – Investment Banking

    Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2005 Bookrun Equity Deals Since 2005 ($ in billions) # of $ ($ in billions) # of % $ Rank Firm Deals Volume Rank Firm Deals Bookrun Volume 1 Bank of Ameri

  29. Slide 29: Financial Results

    STIFEL FINANCIAL Financial Results

  30. Slide 30: Stifel Financial Corp. Results – Three Months Ended June 30, 2012

    Stifel Financial Corp. Results Three months ended June 30, 2012 Three Months Ended (1) ($ in thousands, except per share amounts) 6/30/12 6/30/11 % Change 3/31/12 % Change Net revenues $ 374,407 $ 358,857 4.3% $ 400,333 (6.5%) Compensation and benefits 239,374 229,939 4.1% 254,704 (6.0%) Non-comp op

  31. Slide 31: Stifel Financial Corp. Results – Six Months Ended June 30, 2012

    Stifel Financial Corp. Results Six months ended June 30, 2012 Six Months Ended (1) ($ in thousands, except per share amounts) 6/30/12 6/30/11 % Change Net revenues $ 774,740 $ 725,470 6.8% Compensation and benefits 494,078 461,105 7.2% Non-comp operating expenses 177,534 209,806 (15.4%) Total non-in

  32. Slide 32: Sources of Revenues

    Sources of Revenues Quarter Ended Six Months Ended % % ($ in thousands) 6/30/12 6/30/11 Change 3/31/12 % Change 6/30/12 6/30/11 Change Commissions $ 127,427 $ 138,315 (7.9%) $ 123,303 3.3% $ 250,730 $ 294,101 (14.7%) Principal transactions 91,564 79,741 14.8% 116,233 (21.2%) 207,797 172,600 20.4% Ca

  33. Slide 33: Brokerage Revenues

    Brokerage Revenues Quarter Ended Six Months Ended % % % ($ in thousands) 6/30/12 6/30/11 Change 3/31/12 Change 6/30/12 6/30/11 Change Principal transactions: Taxable debt $ 47,831 $ 43,020 11.2% $ 61,433 (22.1%) $ 109,264 $ 94,439 15.7% Municipal debt 23,851 18,850 26.5% 21,826 9.3% 45,677 38,388 19

  34. Slide 34: Non-Interest Expenses

    Non-Interest Expenses Six months ended June 30, 2012 Six Months Ended % of Net revenues (1) ($ in thousands) 6/30/12 6/30/11 % Change 6/30/12 6/30/11 Compensation and benefits 455,336 424,738 7.2% 58.8% 58.6% (2) Transitional pay 38,742 36,367 6.5% 5.0% 5.0% Total compensation and benefits 494,078 4

  35. Slide 35: Segment Comparison

    Segment Comparison Quarter Ended Six Months Ended % % % ($ in thousands) 6/30/12 6/30/11 Change 3/31/12 Change 6/30/12 6/30/11 Change Net revenues: Global Wealth Management $ 240,029 $ 225,645 6.4% $ 248,348 (3.3%) $ 488,377 $ 464,091 5.2% Institutional Group 135,297 132,915 1.8% 148,504 (8.9%) 283,

  36. Slide 36: Conclusion

    STIFEL FINANCIAL Conclusion

  37. Slide 37: Opportunities Drive our Growth

    Opportunities Drive our Growth Stifel is Well-Positioned to Take Advantage of Opportunities Strategic Initiatives  Attract and retain high-quality talent  Continue building client facing, agency-only businesses  Continue to expand private client footprint in the U.S.  Continue to expand fixed in

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