Stifel Financial Corporation · NYSE:SF
Stifel Financial — Q4 2009 Earnings Presentation
26 slides from Stifel Financial's earnings presentation, Feb 9, 2010
Slide 1: 4th Quarter 2009 Earnings Conference Call
TIFEL INANCIAL 4th Quarter 2009 Earnings Conference Call February 9, 2010
Slide 2: Forward-Looking Statements
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 future business
Slide 3: Chairman's Comments
Chairman’s Comments “In a year of change for our Firm and the entire financial services industry, our associates delivered significantly improved financial performance, which is evident by our achievement of the fourteenth consecutive year of record net revenues and exceeding $1 billion in net reven
Slide 4: 4th Quarter 2009 Highlights
th 4 Quarter 2009 Highlights Record net revenues of $319 million, a 38% increase from the 4th Quarter of 2008 (4Q08). The Global Wealth Management (GWM) segment posted record net revenues of $185 million, a 64% increase from the 4Q08. The Capital Markets (CM) segment posted record net revenues
Slide 5: YTD 2009 Highlights
YTD 2009 Highlights Record net revenues of $1.1 billion for the year ended December 31, 2009, a 25% increase from the prior- year period. The GWM segment posted record net revenues of $591 million for the year ended December 31, 2009, a 26% increase from the prior-year period. The CM segment p
Slide 6: Growth
Growth Total As of % YTD Business Units 2004 12/31/09 Change Additions Firm Net Revenues (millions) . . . . . . . . . . . . . . . . . . . . . . . . $247 . . . . . . . . . . .$1,091 342% Equity Capital (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$131 ...... $873 565% Share Pri
Slide 7: Cumulative Total Return vs Peer Group and S&P 500
Assumes $100 invested on December 31, 2004 in Stifel Financial Corp. common stock, Peer Group and S&P 500 Index $450 Stifel Financial Corp. (33.5% CAGR*) $400 Peer Group (6.6% CAGR*) S&P 500 Index (0.4% CAGR*) $350 AMEX Securities Broker/Dealer Index (-5.5% CAGR*) $300 Dollars $250 $200 $150 $100 $5
Slide 8: Stifel Financial Stock Price Since 1/1/08
Stifel Financial Stock Price Since 1/1/08 through 12/31/09 up +69% $65 $60 $59.24 $55 $50 $45 $40 $35.05 $35 $30 +31% 2008 +29% YTD $25 $20 01/08 05/08 09/08 01/09 05/09 09/09 01/10 Page 7
Slide 9: Income Statements
Stifel Financial Corp. Income Statements Quarter Ended Year Ended % % ($ in thousands) 12/31/09 12/31/08 Change 12/31/09 12/31/08 Change Net revenues $ 319,467 $ 230,986 38.3% $ 1,090,636 $ 870,337 25.3% Compensation and benefits 201,263 141,750 42.0% 718,115 582,778 23.2% Non-comp operating expense
Slide 10: Source of Revenues
Source of Revenues Quarter Ended Year Ended % of Net Revenues % of Net Revenues % % ($ in thousands) Change Change 12/31/09 12/31/08 12/31/09 12/31/08 12/31/09 12/31/08 12/31/09 12/31/08 Revenues Principal transactions $ 116,410 $ 92,492 25.9% 36.4% 40.0% $ 458,188 $ 293,285 56.2% 42.0% 33.7% Commis
Slide 11: Principal Transactions
Principal Transactions Quarter Ended Year Ended % % ($ in thousands) Change Change 12/31/09 12/31/09 12/31/09 12/31/09 Principal transactions: Taxable debt $ 66,210 $ 59,774 10.8% $ 292,400 $ 184,470 58.5% Municipal debt 16,102 15,273 5.4% 65,962 46,667 41.3% Equities 21,113 9,002 134.5% 60,313 36,7
Slide 12: Income Statements: Non-Interest Expenses
Stifel Income Statements Non-Interest Expenses Quarter Ended Year Ended % of Net revenues % of Net revenues % % ($ in thousands) Change Change 12/31/09 12/31/08 12/31/09 12/31/08 12/31/09 12/31/08 12/31/09 12/31/08 Net revenues $ 319,467 $ 230,986 100.0% 100.0% 38.3% $ 1,090,636 $ 870,337 100.0% 100
Slide 13: Key Items with Negative Impact to Margins
Key Items with Negative Impact to Margins Quarter Ended Year Ended % of Net revenues % of Net ($ in thousands) 12/31/09 Revenues 12/31/09 12/31/08 12/31/09 12/31/08 Net revenues $319,467 100.0% $1,090,636 $ 870,337 100.0% 100.0% Non-interest expenses: (1) Transitional compensation 15,359 4.8% 56,227
Slide 14: Segment Comparison
Segment Comparison Quarter Ended Year Ended % % ($ in thousands) 12/31/09 12/31/08 Change 12/31/09 12/31/08 Change Net revenues: Global Wealth Management $ 184,704 $ 112,683 63.9% $ 591,323 $ 471,005 25.5% Capital Markets 133,305 113,178 17.8% 494,092 390,726 26.5% Other 1,458 5,125 (71.5% ) 5,221 8
Slide 15: YTD Segment Comparison (Excludes Acquisitions)
YTD Segment Comparison (Excludes Acquisitions) Balanced business model facilitates growth during volatile markets Stable GWM business is augmented by profitable and growing Capital Markets. Revenue Operating Profit Cap Cap Cap GWM GWM Mkts Mkts GWM Cap Mkts GWM 54% 44% 46% 45% 55% Mkts 48% 52% 5
Slide 16: Global Wealth Management Income Statements
Global Wealth Management Income Statements Quarter Ended Year Ended % % ($ in thousands) 12/31/09 12/31/08 Change 12/31/09 12/31/08 Change Net revenues $ 184,704 $ 112,683 63.9% $ 591,323 $ 471,005 25.5% Compensation and benefits 105,147 63,098 66.6% 329,571 260,997 26.3% Transition pay 11,841 7,448
Slide 17: Stifel Bank & Trust Income Statements
Stifel Bank & Trust Income Statements Quarter Ended Year Ended ($ in thousands) 12/31/09 09/30/09 Flux 12/31/08 Flux 12/31/09 12/31/08 Flux Net revenues: Interest 7,888 4,962 59.0% 3,762 109.7% 20,283 15,253 33.0% Other income/(loss) 1,828 865 111.3% (1,960) 193.3% 4,736 (358) n/m Total revenues 9,7
Slide 18: Stifel Bank & Trust Balance Sheet
Stifel Bank & Trust Balance Sheet Assets increased 242% to $1,142.0 million as of December 31, 2009 from $333.8 million at December 31, 2008. Cash and cash equivalents of $114.3 million as of December 31, 2009, an increase of $88.7 million from December 31, 2008. Investment portfolio increased
Slide 19: Capital Markets Income Statement
Capital Markets Income Statement Q uarte r Ende d Ye ar Ende d % % ($ in thousands) 12/31/09 12/31/08 Change 12/31/09 12/31/08 Change Ne t re ve nue s $ 133,305 $ 113,178 17.8% $ 494,092 $ 390,726 26.5% Compensation and benefits 70,355 60,833 15.7% 273,474 229,043 19.4% T ransition pay 3,229 971 232
Slide 20: Capital Markets Revenues
Capital Markets Revenues Quarter Ended Year Ended % % ($ in thousands) 12/31/09 12/31/08 Change 12/31/09 12/31/08 Change Sales and trading: Equity $ 38,668 $ 44,268 (12.7% ) $ 153,267 $ 159,629 (4.0% ) Fixed income 47,307 53,226 (11.1% ) 222,005 158,625 40.0% 85,975 97,494 (11.8% ) 375,272 318,254 1
Slide 21: Stifel Financial Balance Sheet Graphs
Stifel Financial Balance Sheet Graphs $3,167 $956 $3,000 $1,000 $83 $2,400 $676 $750 $520 $83 $1,800 $1,499 $1,558 $500 $873 $95 $225 $290 $1,085 $1,200 $593 $842 $166 $412 $382 $250 $115 $135 $70 $425 $600 $423 $70 $220 $35 $35 $155 $35 $131 $80 $100 $0 $0 2002 2003 2004 2005 2006 2007 2008 2009 20
Slide 22: Capital Structure
Capital Structure ($ in thousands) Total Assets $ 3,167,356 Stockholders' Equity $ 873,446 Debentures to: Stifel Financial Capital Trust II - LIBOR plus 1.70% (fixed at 6.38% until 9/30/10), due 9/30/35 $ 35,000 Stifel Financial Capital Trust III - LIBOR plus 1.85% (fixed at 6.79% until 6/6/12), due
Slide 23: Level 3 Assets
Level 3 Assets Carrying Value ($ in thousands) 12/31/09 12/31/08 Change Auction Rate Securities (ARS) $ 56,003 $ 18,509 202.6% Stifel Bank & Trust Investments 2,693 10,423 (74.2%) Trading Securities 1,243 4,161 (70.1%) Other Investments 5,426 5,169 5.0% Level 3 assets (excluding ARS) 9,362 19,753 (1
Slide 24: Other Financial Data
Other Financial Data As of % Change Q409 vs. Q409 vs. 12/31/09 9/30/09 12/31/08 Q309 Q408 Total assets (000s): Stifel Nicolaus and Stifel Financial $ 2,025,348 $ 1,925,226 $ 1,224,361 5.2% 65.4% Stifel Bank 1,142,008 965,569 333,784 18.3% 242.1% $ 3,167,356 $ 2,890,795 $ 1,558,145 9.6% 103.3% Shareh
Slide 25: Stifel Outlook
Stifel Outlook Unstable conditions in the private client market presents opportunity for Stifel to continue to grow organically and through M&A The uncertainty surrounding the largest domestic and European private client platforms impacts thousands of US-based Financial Advisors. Success with
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