Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (December 2015)
51 slides from Stifel Financial's investor presentation, Dec 8, 2015
Slide 1: Stifel Financial Corp. December 2015
Stifel Financial Corp. December 2015 Exhibit 99.1
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: Stifel Overview
Stifel Overview
Slide 4: Stifel at a Glance
Stifel – Premier Investment Bank and Full-Service Investment Firm Largest U.S. equity research platform Broad product portfolio & industry expertise Stifel at a Glance Non-GAAP Net Revenue - $1,753 million (Nine Months 2015) Global Wealth Management (GWM) Net Revenue - $1,030 million (Nine Months 20
Slide 5: Stifel's Differentiated Value Proposition: Growth, Scale and Stability
Bulge Bracket Boutique Leading broker-dealer providing wealth management and institutional services to consumers and companies Stifel’s Differentiated Value Proposition: Growth, Scale and Stability Institutional Wealth Management #6 Largest Retail Brokerage Network(2) Size / scale Large distribution
Slide 6: Well-diversified, low risk business model
Well-diversified, low risk business model with balanced retail and institutional exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institutional b
Slide 7: A Stable Track Record Through Multiple Business Cycles
CAGR: 22% Non-GAAP Net Revenues ($MM) Non-GAAP Net Income ($MM) Financial Crisis Financial Crisis CAGR: 23% A Stable Track Record Through Multiple Business Cycles Note: CAGR reflects years 2006 to 2014.
Slide 8: Our Strategy
Our Strategy
Slide 9: Strategic Vision
Strategic Vision To build a premier wealth management and investment banking firm Over 2,900 financial advisors in 350 branches with over $200B in client assets Private Client Asset Management Bank $22B in total assets managed through various strategies Equities Sales + Trading $4.6B in assets funde
Slide 10: Significant Growth Through Acquisitions
Net Revenues ($M) Significant Growth 2005 Legg Mason’s Capital Markets Division Acquired 2008 Butler Wick 2009 56 UBS Private Client Branches Acquired 2010 Thomas Weisel Partners 2007 Ryan Beck Acquisition Stifel Bank & Trust 2011 Stone & Youngberg 23% CAGR 2012 Miller Buckfire 2013 Knight Capital G
Slide 11: Our Growth Initiatives and Acquisition Criteria
Attract and retain high-quality talent Further expand our private client footprint in the U.S. Further expand our fixed income businesses Further expand investment banking capabilities Focus on quality asset generation within Stifel Bank Expand traditional asset management capabilities Approach acqu
Slide 12: Acquisition Updates
Acquisition Updates
Slide 13: Sterne Agee Transaction
Announced February 23, 2015 Closed June 5, 2015 Transaction value of ~$150M, issued approximately 1.4 million shares of Stifel common stock Sterne Agee Transaction Financial Impact Strategic Rationale Transaction expands wealth management and fixed income capabilities Adds over 700 financial advisor
Slide 14: Barclays Wealth & Investment Management, Americas
Announced June 8, 2015 Closed Dec. 4, 2015 Investment will match the business and professionals who join Stifel Transaction Financial Impact Strategic Rationale Transaction significantly expands Stifel’s high net worth advisory business. Expected contribution: Approximately 100 financial advisors Ap
Slide 15: Eaton Partners, LLC
Eaton Partners, LLC Transaction Financial Impact Strategic Rationale Eaton Partners, LLC, is one of the largest independent, partner-owned global fund placement and advisory firms Eaton has over 60 employees across six offices and relationships with over 4,000 of the largest active institutional inv
Slide 16: Financial Performance Trends and Growth Drivers
Financial Performance Trends and Growth Drivers
Slide 17: Optimizing Capital Through Growth
Optimizing Capital Through Growth $ in millions Stifel has resumed growth and has the potential to further leverage existing capital base Pause 43% CAGR Note: (1) Total asset growth expected to occur by 12-31-15 is comprised of approximately $2 billion from the Barclays transaction and $1 billion of
Slide 18: Impact of a Rising Interest Rate Environment
Impact of a Rising Interest Rate Environment Projected Increase in Annual Pre-Tax Earnings from a 100 BPS Rise in Short-Term Rates ($ millions; as of September 30, 2015) Key Assumptions: Based on static balances as of September 30, 2015 and an instantaneous change in short-term rates. Ultimately, th
Slide 19: Operating Model Potential
Operating Model Potential Stifel is Positioned to Significantly Benefit From 3 Key Factors Barclays + 4th Quarter Growth Fully Leveraged Growth¹ 100 bps Rate Increase Potential Incremental Earnings Annualized EPS $1.25 to $1.55 $0.35 to $0.45 $0.55 to $0.65 $0.35 to $0.45 Note: (1) This represents t
Slide 20: Key Financial Targets
Key Financial Targets Stifel is Positioned to Significantly Benefit From 3 Key Factors Integrating Acquisitions: Sterne Agee and Barclays Optimizing Current Capital Base, and Poised for Revenue Growth in a Rising Interest Rate Environment Note: Targets noted above are based on Non-GAAP results.
Slide 21: Financial Overview
Financial Overview
Slide 22: Selected Financial Highlights
CAGR reflects years 2006 through 2014 for income statement metrics and years 2006 through Q3 2015 for balance sheet metrics and client assets. Assumes $25 billion in AUM from the Barclays Wealth Americas transaction transfers to Stifel. Book Value Per Share adjusted for April 2011 three-for-two stoc
Slide 23: Appendix
Appendix
Slide 24: Global Wealth Management
Global Wealth Management
Slide 25: Global Wealth Management Overview
Includes Independent Contractors. Global Wealth Management (GWM) Provides Securities Brokerage Services and Stifel Bank Products Net Revenues ($MM) Non-GAAP Operating Contribution ($MM) Overview National Presence Grown from 600+ financial advisors in 2005 to over 2,800(1) financial advisors currentl
Slide 26: Building Scale and Capabilities into a $1.4B Revenue Segment
Building Scale and Capabilities into a $1.4B Revenue Segment… Private Client – 350 financial advisors and support Revenue production has exceeded expectations October 2009 Bank holding company Grown assets from ~ $100M to $5.2B April 2007 Private Client – 75 financial advisors Public Finance Decembe
Slide 27: GWM Private Client Group Key Operating Metrics
Includes Independent Contractors. Key Operating Metrics Accounts Financial Advisors(1) Total Client Assets ($MM) Branches GWM - Private Client Group
Slide 28: GWM - Stifel Bank & Trust
GWM - Stifel Bank & Trust Investment Portfolio(2) Loan Portfolio(3) (Gross) Acquired FirstService Bank, a St. Louis-based, Missouri-chartered commercial bank, in April 2007 Stifel Financial became a bank holding company and financial services holding company Balance sheet growth with low-risk assets
Slide 29: Growing Asset Management Capabilities
$9.5 Billion $9.0 Billion $2.1 Billion $851 Million $329 Million Assets¹ Location Growing Asset Management Capabilities ¹Assets as of September 30, 2015. Includes assets under advisement and assets under management. Excludes private equity funds. EquityCompass Strategies is a research and investment
Slide 30: Institutional Group
Institutional Group
Slide 31: Institutional Group Overview and Net Revenues
Based on 2014 U.S. trading volume per Bloomberg. Includes Thomas Weisel historical investment banking revenues for years 2006 through September 30, 2010. 2012 includes realized and unrealized gains on the Company’s investment in Knight Capital Group, Inc. of $39.0 million. Institutional Group Net Re
Slide 32: Building Scale and Capabilities into a $1.0B Revenue Segment
Building Scale and Capabilities into a $1.0B Revenue Segment… Growth Focused Investment Banking, Research, Sales and Trading July 2010 Core of our Institutional sales, trading and research group December 2005 Fixed Income IB, Sales and Trading Private Client October 2011 FIG Investment Banking FIG S
Slide 33: Institutional Group - Investment Banking
Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions Bookrun Equity Deals Since 2010 All Managed Equity Deals Since 2010 ($ in billions) # of $ Rank Firm Deals Volume 1 Bank of America Merrill Lynch 1,321 $737.3 2 JPMorgan 1,288 $733.4 3
Slide 34: Institutional Group - Research
U.S. Equity Research Coverage (1) Coverage Balanced Across All Market Caps (1) Institutional Group – Research Stifel Research Highlights Largest U.S. Equity Research Platform Largest provider of U.S. Equity Research Third largest provider of global small cap coverage 135 analysts globally across 12
Slide 35: Institutional Group - Equity Sales and Trading
Institutional Equity Sales Equity Trading Institutional Group – Equity Sales and Trading Extensive Distribution Network Powerful Platform Spanning North America and Europe 84 person sales force, commission based Experts in small- and mid-cap growth and value Team based sales model with 2-4 sales peo
Slide 36: Institutional Group - Fixed Income Capital Markets
Overview Institutional Group – Fixed Income Capital Markets Client Distribution (1)(2) Platform & Products Comprehensive platform 96 traders with annual client trade volume approaching $500 billion 69-person Fixed Income Research and Strategy Group Widespread distribution More than 250 Institutional
Slide 37: Institutional Group - Public Finance
Overview Institutional Group – Public Finance Stifel has ranked in the top ten nationally for senior managed negotiated underwritings for the past three years, and Stifel has ranked #1nationally for senior managed K-12 negotiated underwritings since 2011. Stifel’s Public Finance Group ranked #1 in m
Slide 38: Financial Information
Financial Information
Slide 39: Stifel Financial Results Three Months Ended September 30, 2015
Stifel Financial Results Three months ended September 30, 2015 Adjustments consist primarily of acquisition related expenses, which management believes are duplicative and will be eliminated, stock-based compensation and other expenses which in managements’ view are not representative of ongoing bus
Slide 40: Stifel Financial Results Nine Months Ended September 30, 2015
Stifel Financial Results Nine months ended September 30, 2015 Adjustments consist primarily of acquisition related expenses, which management believes are duplicative and will be eliminated, stock-based compensation and other expenses which in managements’ view are not representative of ongoing busi
Slide 41: Sources of Revenues
Sources of Revenues STIFEL Nine Months Ended September 30, 4 2015 (S in thousands) 2012 2013 2014 Commissions $ 518,803 $ 640,287 $ 674,418 | $ 510,070 $ 562,249 i 380,160 408,954 409,823 318,312 281, Brokerage revenues 898,963 1,049,241 1,084,241 828,382 844,043 Capital raising 198,011 6,0. 305,1 2
Slide 42: Brokerage and Investment Banking Revenues
Brokerage and Investment Banking Revenues
Slide 43: Non-GAAP Non-Interest Expenses (Three Months)
Non-GAAP Non-Interest Expenses Excludes adjustments for duplicative items associated with the integration of acquired businesses (merger-related expenses). Transition pay includes amortization of retention awards, signing bonuses, and upfront notes. Three months ended September 30, 2015
Slide 44: Non-GAAP Non-Interest Expenses (Nine Months)
Non-GAAP Non-Interest Expenses Excludes adjustments for duplicative items associated with the integration of acquired businesses (merger-related expenses). Transition pay includes amortization of retention awards, signing bonuses, and upfront notes. Nine months ended September 30, 2015
Slide 45: Non-GAAP Segment Comparison
Non-GAAP Segment Comparison Excludes the other segment.
Slide 46: Global Wealth Management
Global Wealth Management STIFEL (Sin thousands) 9/30/14 % Change 6/30/15 % Change Commissions $ 113,177 188% = $ 125,121 75% Principal transactions 373 (21.5%) 334 3.4% Asset management & service fees. 9% Net interest Investment banking, Other income Net revenues Compensation and benefits Total non-
Slide 47: Stifel Bank & Trust
Stifel Bank & Trust Note: Actual amounts presented above are as of period-end and yields are based off of quarter-to-date averages. Investment securities includes available-for-sale and held-to-maturity securities. Includes loans held for sale. Figures include intercompany balances. An Operating Uni
Slide 48: Institutional Group
Debt to equity ratio includes the debentures to Stifel Financial Capital Trusts and Senior Notes divided by stockholders’equity. Institutional Group
Slide 49: Capital Structure
Debt to equity ratio includes the debentures to Stifel Financial Capital Trusts and Senior Notes divided by stockholders’equity. Capital Structure
Slide 50: Other Financial Data
Includes 755, 139, and 736 independent contractors as of September 30, 2015, September 30, 2014, and June 30, 2015, respectively. Excludes independent contractors. Other Financial Data (1) (2)
Slide 51: Non-GAAP Deal Integration Expenses
Non-GAAP Deal Integration Expenses Assumes an effective income tax rate of 40.0%.
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