Stifel Financial Corporation · NYSE:SF

Stifel Financial — Investor Presentation (September 2010)

42 slides from Stifel Financial's investor presentation, September 2010

  1. Slide 1: Stifel Financial Investor Presentation

    Stifel Financial Investor Presentation September 2010

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Table of Contents 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 a

  3. Slide 3: I. Stifel Financial Overview

    I. Stifel Financial Overview

  4. Slide 4: Stifel Financial Overview

    Stifel Financial Overview Key Points of Differentiation Firm at a Glance „ Proven ability to build Global Wealth Global Wealth Institutional Management Business Management (GWM) Group (IG) z Grown from 86 branches and 621 Financial Advisors in 2004 to 278 branches and 1,916 ƒ Private Client ƒ Equity

  5. Slide 5: A Growth Story

    Stifel Financial Overview A Growth Story… Net Revenues ($MM) (1) Core Net Income ($MM) (2) Total Equity ($MM) CAGR: 29% CAGR: 54% $1,000 CAGR: 36% $112 $873 $927 $1,800 $96 $1,461 $96 $1,500 $76 $750 $80 $73 $593 $1,200 $1,091 $67 $870 $64 $500 $425 $900 $763 $48 $40 $600 $452 $220 $32 $23 $21 $264

  6. Slide 6: 15 Years of Growth

    Stifel Financial Overview 15 Years of Growth 1995 – 2010E Net Revenue ($MM) $1,600 $1,461 $1,400 2010 set to be 15th consecutive year of Record Net Revenue CAGR since 1995: 21% $1,200 CAGR since 2005: 41% $1,091 $1,000 $870 $800 $763 $600 $452 $400 $247 $264 $217 $178 $177 $188 $200 $141 $110 $123 $

  7. Slide 7: Stifel's Peer Analysis Shows Continued Strength

    Stifel Financial Overview Stifel’s Peer Analysis Shows Continued Strength Peer Analysis SF Stock Price – 2000 to Present $70 $450 $60 $400 $350 $50 $339.52 $300 $40 $250 $49.02 $200 $30 892% $150 $20 $100 $116.25 $4.92 $91.55 $10 $50 $0 $0 2004 2005 2006 2007 2008 2009 2010 1/3/00 1/3/02 1/3/04 1/3/

  8. Slide 8: Cumulative Price Appreciation

    Stifel Financial Overview – Cumulative Price Appreciation As of September 13, 2010 Since 12/31/07 – 3 Years Since 12/31/05 – 5 Years Since 12/31/00 – 10 Years Stifel Financial Corp. 39.9% Stifel Financial Corp. 95.61% Stifel Financial Corp. 761.89% Evercore Partners Inc. 36.19% Greenhill & Co Inc. 4

  9. Slide 9: Consolidation and Industry Retrenchments Drive our Growth

    Stifel Financial Overview Consolidation and Industry Retrenchments Drive our Growth… Stifel Strategy ƒ Continue to build client facing agency-only businesses in financial services ƒ Expand private client footprint in the U.S. ƒ Expand institutional equity business both domestically and international

  10. Slide 10: Stifel's Track Record in Integrating Transactions

    Stifel Financial Overview Stifel’s Track Record in Integrating Transactions: Low Risk Opportunity „ Builds the premier middle-market investment bank with the scale and diversification to become a top-tier player „ Complementary fit with minimal overlap in research and investment banking „ Fast track

  11. Slide 11: II. Global Wealth Management

    II. Global Wealth Management

  12. Slide 12: Global Wealth Management: Brokerage Services and Stifel Bank Products

    Global Wealth Management Provides Securities Brokerage Services and Stifel Bank Products Overview Strength of Stifel’s Brokerage Position Client „ Stifel has grown from 600+ financial advisors in Rank Company Headquarters RRs (1) Assets (2) 2005 to over 1,900 financial advisors(4) 1 Citigroup/Smith

  13. Slide 13: GWM Account Growth

    Global Wealth Management GWM Account Growth 700,000 „ Since the acquisition of Butler Wick, 728 Financial GWM Accounts 607,661 624,878 Advisors have joined Stifel, 397 through both the 600,000 Butler Wick and UBS acquisitions 500,000 400,000 375,165 „ Stifel expects to see opportunities resulting fr

  14. Slide 14: Stifel Bank & Trust Overview

    Global Wealth Management Stifel Bank & Trust Overview Low Risk Asset Growth Strategy & Opportunity ¾ Assets of $1.40 billion, up 22% from the prior year‐end ¾ Maintain solid asset quality: balance of $1.14 billion ¾ Non‐performing loans to gross loans of 0.24% ¾ Non‐performing assets to total assets

  15. Slide 15: III. Institutional Group

    STIFEL FINANCIAL III. Institutional Group

  16. Slide 16: Institutional Group Overview

    Institutional Group Overview Net Revenues ($MM)(1) $800 „ Provides securities brokerage, trading, research services, as well as underwriting and corporate advisory CAGR: 14% $668 $642 „ SF has opportunistically expanded talent pool $587 $600 $559 $174 ƒ Victor Nesi, Director of Investment Banking an

  17. Slide 17: One of the Largest U.S. Equity Research Platforms

    Institutional Group One of the Largest U.S. Equity Research Platforms #1 U.S. Equity Research Coverage Significant Coverage Across All Market Caps (1) Companies Under Coverag Large Cap, Rank Firm Overall Small Cap 26% Small Cap, 1 JP Morgan 1,086 247 38% 2 Stifel Nicolaus & Co. 1,073 405 3 BofA Merr

  18. Slide 18: Research Accolades

    Institutional Group Research Accolades #1 in WSJ “Best on the Street” Survey (1) Highlights „ #1 ranked research group of investment banks by awards in 2010 Rank Broker # of Awards Wall Street Journal poll with 14 analysts 1 Stifel 14 „ #2 U.S. Ranking for 2009 FT/StarMine World’s Top Analysts 2 Cre

  19. Slide 19: Institutional Equity Sales and Trading Platform

    Institutional Group Powerful Institutional Equity Sales and Trading Platform Institutional Equity Sales U.S. Trading Volume: Middle Market Banks (1) „ 120 person sales force, commission based Rank Firm Shares in Millions „ Experts in small and mid cap growth and value 1 Jefferies 19,502 „ Team based

  20. Slide 20: Fixed Income Capital Markets Capabilities

    Institutional Group Strong Fixed Income Capital Markets Capabilities Overview Platform & Products „ Comprehensive platform „ Focus on long-only „ Agency/Gov’t Securities zApproximately 50 traders averaging 14 years of money managers and „ Aircraft Finance & experience income funds versus Credit Solu

  21. Slide 21: Investment Banking Overview

    Institutional Group Investment Banking Overview „ Full-Service, Industry-Focused Middle-Market Investment Bank „ Over 250 Investment Banking Professionals Investment Banking Product Areas 1H 2010 Investment Banking Capital Markets M&A Advisory Revenues „ Equity & Convertible „ Sale & acquisition adv

  22. Slide 22: Leadership in the Venture Capital Community

    Institutional Group Leadership in the Venture Capital Community Selected Venture Capital-Backed IPOs 2004 – 2010YTD U.S. Venture-Backed IPOs ($ in millions) # of $ Rank Firm Deals Volume 1 Stifel Nicolaus Weisel 99 14,329 2 BofA Merrill Lynch 83 12,624 3 J.P. Morgan 77 12,065 4 Piper Jaffray 75 7,15

  23. Slide 23: Strong Momentum and Track Record as Bookrunner

    Investment Banking Strong Momentum and Track Record as Bookrunner 7,000 50 45 6,000 40 Deal Value ($mm) 5,000 35 No. Deals 4,000 30 25 3,000 20 2,000 15 10 1,000 5 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010E Filed/Mandated No. Deals Deal Value Pipeline % of Deals Bookrun 17% 23% 19% 24% 17% 26

  24. Slide 24: U.S. Equity Underwriting Franchise

    Investment Banking Accomplished U.S. Equity Underwriting Franchise – Equity Transactions <$1 billion Market Cap All Managed Equity Deals Since 2005 Bookrun Equity Deals Since 2005 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 Bank of America Merrill Ly

  25. Slide 25: Strong Backlog: Current Filed and Mandated Offerings

    Strong Backlog Current Filed and Mandated Offerings Filed Mandated Total # of # of % of # of # of % of # of # of % of Managed Bookrun Bookrun Managed Bookrun Bookrun Managed Bookrun Bookrun IPOs 29 11 38% 16 1 6% 45 12 27% Demutualizations 6 6 100% 2 2 100% 8 8 100% Follow-Ons 6 5 83% 6 3 50% 12 8 6

  26. Slide 26: IV. Second Quarter 2010 Highlights

    IV. Second Quarter 2010 Highlights

  27. Slide 27: Chairmen's Comments

    Chairmen’s Comments “We are very pleased to report record quarterly revenue and record six- month net income and revenue results, which reflect the investments we’ve made over the past several years. The merger with Thomas Weisel Partners closed on July 1, 2010, and we are confident that through the

  28. Slide 28: Six Months Ended June 30, 2010 Highlights

    Six Months Ended June 30, 2010 Highlights ƒ Record net revenues of $640 million, a 33% increase over the comparable period in 2009. ƒ The GWM segment posted net revenues of $399 million, a 59% increase over the comparable period in 2009. ƒ The IG segment posted net revenues of $238 million, a 3% inc

  29. Slide 29: Six Months Ended June 30, 2010 Results

    Stifel Financial Corp. Six months ended June 30, 2010 Results Six Months Ended June 30, 2010 % Change Merger‐ Six Months Related ended Non‐ ($ in thousands) GAAP Charges Non‐GAAP 6/30/2009 GAAP GAAP Net revenues $ 640,039 $ ‐ $ 640,039 $ 481,486 32.9% 32.9% Compensation and benefits 423,149 3,119 42

  30. Slide 30: Sources of Revenues

    Sources of Revenues Quarter Ended Six Months Ended % of Net Revenues % of Net Revenues % % ($ in thousands) 6/30/10 6/30/09 Change 6/30/10 6/30/09 6/30/10 6/30/09 Change 6/30/10 6/30/09 Revenues Principal transactions $ 122,923 $ 121,261 1.4% 37.4% 46.4% $ 240,343 $ 218,539 10.0% 37.5% 45.4% Commiss

  31. Slide 31: Segment Comparison

    Segment Comparison Quarter Ended Six Months Ended ($ in thousands) 6/30/10 6/30/09 % Change 6/30/10 6/30/09 % Change Net revenues: Global Wealth Management $ 199,940 $ 136,200 46.8% $ 399,361 $251,252 58.9% Institutional Group 124,602 125,136 (0.4%) 237,894 230,608 3.2% Other 3,467 169 * 2,784 (374)

  32. Slide 32: Statement of Financial Condition

    Statement of Financial Condition Total Assets ($MM) Total Capitalization (1) $4,000 $1,200 $3,371 $1,010 $3,167 $1,000 $956 $83 $83 $3,000 $800 $676 $83 $2,000 $600 $520 $1,499 $1,558 $95 $873 $927 $400 $1,085 $290 $842 $225 $593 $1,000 $166 $70 $200 $135 $70 $425 $412 $382 $35 $35 $220 $131 $155 $1

  33. Slide 33: V. TWP Merger

    STIFEL FINANCIAL V. TWP Merger

  34. Slide 34: Pro Forma Combined Net Revenues

    Stifel Financial Corp. Pro Forma Combined Net Revenues Six Months Ended June 30, 2010 Pro Forma ($ in thousands) Stifel TWPG Combined Revenues Principal transactions & commissions $ 449,012 $ 37,730 $ 486,742 Asset mgt and service fees 85,241 7,252 92,493 Investment banking 75,473 46,235 121,708 Oth

  35. Slide 35: TWPG Merger: Estimated Annual Fixed Operating Expenses

    TWPG Merger Estimated Annual Fixed Operating Expenses TWPG ($ in thousands) Stifel (1) Estimate (2) Total Fixed operating expenses: Occupancy and equipment rental $ 103,000 $ 10,400 $ 113,400 Communication and office supplies 60,600 10,800 71,400 Commissions and floor brokerage 22,000 2,300 24,300 O

  36. Slide 36: Pro Forma Equity Roll Forward

    Stifel Financial Corp. Pro Forma Equity Roll Forward Proforma Unit Stifel ($ in thousands) 6/30/10 TWPG Combined Modification Proforma Beginning Equity (1/1/2010) $ 873,500 $ ‐ $ 873,500 $ ‐ $ 873,500 Net income 45,000 ‐ 45,000 ‐ 45,000 Merger Consideration ‐ 274,000 274,000 ‐ 274,000 Share repurcha

  37. Slide 37: Pro Forma Estimate and Unit Vesting

    Stifel Financial Corp. Pro Forma Estimate and Unit Vesting 2010E Half Year Proforma Illustration Proforma TWPG Combined Proforma Stifel 2010E Stifel Breakeven pre‐unit after Unit (in thousands, except per share data) Consensus(1) Consensus(2) EPS Vesting Unit Vesting Vesting Net revenues $ 1,352,100

  38. Slide 38: Dodd-Frank Provisions of Interest to Stifel Financial Corp.

    Dodd‐Frank Wall Street Reform and Consumer Protection Act Provisions of Interest to Stifel Financial Corp. ¾ Fiduciary Duty ¾ SEC Authority to Restrict Mandatory Pre‐Dispute Arbitration ¾ Consumer Financial Protection ¾ New Fees ¾ Higher Deposit Insurance Costs ¾ SIPC Fees ¾ Volcker Rule 38

  39. Slide 39: VI. Conclusion

    STIFEL FINANCIAL VI. Conclusion

  40. Slide 40: Peer Metrics

    Peer Metrics 5 Year Revenue Change , 2005-2009 (1) 2010E Price/ Revenue 400% 2.5x 354% 350% 308% 2.1x 300% 2.0x 1.8x 1.7x 250% 200% 1.5x 1.2x 1.1x 150% 1.0x 1.0x 1.0x 90% 1.0x 100% 65% 0.7x 0.7x 0.6x 41% 37% 50% 26% 21% 19% 0.5x 0% 0.3x RODM SF JMP JEF SWS OPY KBW RJF LAZ PJC FBCM -50% -41% -49% 0.0

  41. Slide 41: Looking Forward: We See Opportunity

    Looking Forward We See Opportunity Stifel is well-positioned in the current market: „ Dislocation creating opportunity for market share gains „ Ability to add talented professionals „ Expand Fixed Income/High Yield „ Evolving regulatory framework (Stifel is already regulated by the Fed) „ Expand Tra

  42. Slide 42: Stifel Financial Investor Presentation

    Stifel Financial Investor Presentation

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