Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q2 2016 Earnings Presentation
18 slides from Stifel Financial's earnings presentation, Aug 2, 2016
Slide 1: 2nd Quarter 2016 Financial Results Presentation
2nd Quarter 2016 Financial Results Presentation August 2, 2016
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: 2nd Quarter Highlights
2nd Quarter Highlights 2nd Quarter Highlights: Record total net revenue of $652 mil. up 5% sequentially & 9% Y/Y Record total Global Wealth Management net revenue of $386 mil. up 2% sequentially & 12% Y/Y Record total Stifel Bank & Trust net revenue of $56 mil. up 5% sequentially & 36% Y/Y T
Slide 4: Revenue & Segment Results
Revenue & Segment Results 3
Slide 5: Core Revenue Growth
Core Revenue Growth Core Net Revenue (mil.) • Total net revenue of $652 mil. up 5% sequentially and 9% Y/Y driven by: • Investment Banking revenue increased 32% sequentially but declined 16% Y/Y • Asset Management revenue was flat sequentially & increased 21% Y/Y Core Segment Net Revenue (mil.) • Ne
Slide 6: Global Wealth Management
Global Wealth Management GWM Core Net Revenue (mil.) • Total net revenue in the GWM segment was $386 mil., up 2% sequentially & 12% Y/Y • Brokerage revenue declined less than 1% sequentially but increased 8% Y/Y • Asset management revenue was flat sequentially & increased 21% Y/Y • Net interest inco
Slide 7: Stifel Bank & Trust
Stifel Bank & Trust Net Revenue (mil.) • Total net revenue at Stifel Bank & Trust was $56 mil., up 5% sequentially & 36% Y/Y • Total bank loans of $4.6 bil. increased 23% sequentially & 75% Y/Y • Total investment securities of $4.6 bil. increased 10% sequentially & 140% Y/Y • NIM of 2.36% was down 1
Slide 8: Institutional Group
Institutional Group • Total net revenue of $261 mil. increased 8% sequentially & 1% Y/Y • Investment banking revenue of $124 mil. increased 34% sequentially but declined 15% Y/Y • Advisory revenue of $68 mil. increased 43% sequentially & 7% Y/Y • Brokerage revenue of $136 mil. decreased Core Expense
Slide 9: Institutional Brokerage & Investment Banking
Institutional Brokerage & Investment Banking Equity & Fixed Income Brokerage Net Revenue • Brokerage revenue of $136 mil. • Equity brokerage revenue of $55 mil. was down 12% sequentially & 6% Y/Y • Fixed income brokerage revenue of $81 mil. was down 3% sequentially but increased 50% Y/Y • Advisory r
Slide 10: Expense & Balance Sheet
Expense & Balance Sheet 9
Slide 11: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three months ended June 30, 2016 GAAP Results Three months ended Three months ended (000s) 30‐Jun‐16 31‐Mar‐16 (000s) 30-Jun-16 31-Mar-16 Total GAAP Compensation & benefits expense $ 460,023 $ 411,113 GAAP net income $ 9,771 $ 27,055 GAAP comp. ratio 70.5% 66.3% Dupli
Slide 12: Non-GAAP Deal Integration Costs
Non-GAAP Deal Integration Costs Actual Estimates Three Months Ended Total Total (in $000s) 6/30/2016 9/30/2016 12/31/2016 2016 2017 Acquisitions On-Going Deals: Barclay $43,731 $28,900 $4,900 $85,532 $15,500 Sterne Agee 16,826 4,000 - 34,791 - Eaton 1,190 700 700 3,089 2,600 Knight Fixed Income 1,54
Slide 13: Core & GAAP EPS to Converge As Deal Charges Realized
Core & GAAP EPS to Converge As Deal Charges Realized Deal related pre-tax expenses totaled $46.5 mil. and $152 mil. in 2014 and 2015, respectively. The increase in 2015 resulted in a $1.24 differential between Core EPS and GAAP EPS. $142 mil. of non-core deal related expenses forecasted for 20
Slide 14: Balance Sheet & Capital Return
Balance Sheet & Capital Return • Balance Sheet: Net Interest Income Drivers • Total assets increased to $15.2 bil. up 7% sequentially & 50% Y/Y • Average interest earning assets increased to $11.4 bil. up 8% sequentially & 63% Y/Y • NIM decreased to 171 bps , down 15 bps sequentially & 23 bps Y/Y. •
Slide 15: Outlook & Key Drivers
Outlook & Key Drivers 14
Slide 16: Balance Sheet Growth
Balance Sheet Growth Ratio 2008 2009 2010 2011 2012 2013 2014 2015 Q1 16 Q2 16 Illustrative Tier 1 Leverage 32% 31% 26% 21% 18% 15% 16.5% 16.6% 11.6% 11.5% 10.8% Tier 1 Risk Based Capital 49% 40% 29% 28% 27% 27% 25.0% 26.4% 21.3% 20.9% 20.7% Risk Weighting Assets Density 64.9% 56.2% 67.3% 62.7% 57.0
Slide 17: Subsequent Events & Industry Issues
Subsequent Events & Industry Issues Continued focus on balance sheet optimization: • Closed the sale of legacy Sterne Agee correspondent clearing and independent contractor brokerage business for approximately $50 mil. • Issued $150 mil. of 6.25% non-cumulative Preferred Shares • Issued $200 mil. of
Slide 18: Q&A
O&A