Stifel Financial Corporation · NYSE:SF
Stifel Financial — Investor Presentation (March 2016)
43 slides from Stifel Financial's investor presentation, March 2016
Slide 1: Stifel Financial Corp.
Stifel Financial Corp. March 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: Market Overview
Market Overview
Slide 4: Market Overview
Market Overview Market Valuations Rates Volatility / Volumes Underwriting Volumes and M&A¹ Municipal U.S. U.S. U.S. 10yr Equity Corporate U.S. ECM U.S. DCM Bond DCM Announced Completed S&P 500 Dow Yield VIX ADV Bond ADV ($) ($) ($) M&A ($) M&A ($) 2016 Q1 - TD 2,050 17,602 1.88% 14.0 8,840 27,615 44
Slide 5: Our Strategy
Our Strategy
Slide 6: To build a premier wealth management and investment banking firm
Strategic Vision To build a premier wealth management and investment banking firm Global Wealth Management Institutional Private Asset Bank Equities Fixed Investment Research Client Management Sales + Income Banking Trading Sales + Trading 2,891 financial $24B in total $7.3B in assets Experienced Co
Slide 7: A History of Growth
A History of Growth 300% 250% 200% 2015 2016 Barclays Wealth & Eaton Partners 150% Investment Management, ISM Capital 100% Sterne Agee, Sidoti Joint Venture, 50% Leumi Partners 0% Collaboration Agreement 2014 (50%) De La Rosa, Oriel Securities, (100%) 1919 Investment Counsel, Mar-06 Mar-07 Mar-08 Ma
Slide 8: Balance Sheet Growth
Balance Sheet Growth $ in millions Stifel has resumed growth and has the potential to further leverage existing capital base 8
Slide 9: Acquisition Philosophy and Updates
Acquisition Philosophy and Updates
Slide 10: Acquisition Philosophy
Acquisition Philosophy Acquisition Philosophy Strategic combinations need to be accretive to: Shareholders Expected revenue and EPS growth in a reasonable timeframe Financial metrics: 1. Ascertain our view of enterprise value 2. Determine the split of value between shareholders and employees a) Ca
Slide 11: Barclays Overview
Barclays Overview Transaction Overview Financial Projections $147 million total pre-tax investment, as Revenue range of $160-$190 million follows: Pre-tax margins of 20% - 25% (inclusive of $115 million Non-GAAP charges, including amortization on newly issued Stifel broker stock-based compen
Slide 12: Non-GAAP Deal Integration Expenses
Non-GAAP Deal Integration Expenses 12
Slide 13: Stifel Overview
Stifel Overview
Slide 14: Stifel – Premier Investment Bank and Wealth Management Firm
Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance Non-GAAP Net Revenue - $2,335 million (2015) Global Wealth Management (GWM) Institutional Group (IG) Net Revenue - $1,377 million (2015) Net Revenue - $976 million (2015) Private Client Equity & Fixed Income Capital R
Slide 15: Leading broker-dealer providing wealth management and institutional services
Leading broker-dealer providing wealth management and institutional services to consumers and companies Stifel’s Differentiated Value Proposition: Growth, Scale and Stability Bulge Bracket Boutique Size / scale Firm focus Large distribution Good research Size / scale Trading Growth inv
Slide 16: Well-diversified, low risk business model with balanced retail and institutional exposure
Well-diversified, low risk business model with balanced retail and institutional exposure Unburdened by capital constraints Low leverage business model and conservative risk management Limited balance sheet risk Stable wealth management business is augmented by profitable and growing institu
Slide 17: A Stable Track Record Through Multiple Business Cycles
A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues ($MM)(1) Non-GAAP Net Income ($MM)(1) Total Equity ($MM) (1) CAGR: 20% CAGR: 19% CAGR: 31% Financial Crisis Financial Crisis Total Client Assets(1) ($BN) Book Value Per Share(1) (2) CAGR: 24% CAGR: 18% (1) CAGR reflects yea
Slide 18: Global Wealth Management
Global Wealth Management
Slide 19: Global Wealth Management (GWM)
Global Wealth Management (GWM) Provides Securities Brokerage Services and Stifel Bank Products Overview National Presence Grown from 600+ financial advisors in 2005 to over 2,800(1) financial advisors currently Proven organic growth and acquirer of private client business Strategy of recruitin
Slide 20: Building Scale and Capabilities into a $1.4B Revenue Segment
Building Scale and Capabilities into a $1.4B Revenue Segment… ~100 advisors managing over $20B in AUM December 2015 Customized investment advisory and trust services November 2014 Private Client 56 UBS Branches Private Client – 350 financial advisors and support Revenue production has exc
Slide 21: GWM - Private Client Group
GWM - Private Client Group Key Operating Metrics Financial Advisors(1) Branches Accounts Total Client Assets ($MM) (1) Includes Independent Contractors. 21
Slide 22: GWM - Stifel Bank & Trust
GWM - Stifel Bank & Trust Overview Key Statistics (12/31/15) Acquired FirstService Bank, a St. Louis-based, Total assets $7,275,308 Missouri-chartered commercial bank, in April 2007 Total deposits 6,638,359 Stifel Financial became a bank holding company and Total equity 441,918 financial service
Slide 23: Growing Asset Management Capabilities
Growing Asset Management Capabilities Total Assets: $24.0 Billion¹ Assets* $10.4 Billion $9.8 Billion $2.2 Billion $648 Million $914 Million Offices Chicago Baltimore Baltimore New York Florham Park, NJ St. Louis Cincinnati Milwaukee New York New York Philadelphia San Francisco ¹As of 12/31/2015 Equ
Slide 24: Institutional Group
Institutional Group
Slide 25: Institutional Group
Institutional Group Overview Net Revenues ($MM)(2)(3) Provides securities brokerage, trading, research, underwriting and corporate advisory services Largest provider of U.S. Equity Research 2nd largest Equity trading platform in the U.S. outside of the Bulge Bracket(1) Full-service Investmen
Slide 26: Building Scale and Capabilities into a $1.0B Revenue Segment
Building Scale and Capabilities into a $1.0B Revenue Segment… Growth Focused Investment Banking, Research, Sales and Trading Equities July 2010 Core of our Institutional sales, trading and research group December 2005 Enhances European debt capital markets capabilities February 2016
Slide 27: Institutional Group – Investment Banking
Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions All Managed Equity Deals Since 2010 Bookrun Equity Deals Since 2010 ($ in billions) # of $ ($ in billions) # of $ Rank Firm Deals Volume Rank Firm Deals Volume 1 Bank of America Merrill
Slide 28: Institutional Group – Research
Institutional Group – Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Stifel Research Highlights Companies Under Coverage Rank Firm Overall Mid Cap Small Cap 1 Stifel/KBW 1,389 473 507 Largest provider of U.S. Equity Research 2 JPMorgan 1,141 404 225 3 BofA Merrill
Slide 29: Institutional Group – Equity Sales and Trading
Institutional Group – Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales Equity Trading 84 person sales force, commission-based Experts in small and mid cap growth and value 28 sales traders located in Team-based sales model with 2 - 4 cov
Slide 30: Institutional Group – Fixed Income Capital Markets
Institutional Group – Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Overview Client Distribution (1)(2) Insurance Trust Company Comprehensive platform Company 3% 1% Broker/Dealer 8% 88 traders with annual client trade volume Hedge Fund 2% approaching $500 billion Corpor
Slide 31: Institutional Group – Public Finance
Institutional Group – Public Finance Overview Stifel has ranked in the top ten nationally for senior Specialty sectors: managed negotiated underwritings for the past five Education years, and Stifel has ranked #1nationally for senior Local Government/Municipal managed K-12 negotiated underwr
Slide 32: Financial Information
Financial Information
Slide 33: Stifel Financial Results
Stifel Financial Results Three months ended December 31, 2015 Three Months Ended December 31, 2015 Three Months Ended (1) (2) (2) ($ in thousands, except per share amounts) Non-GAAP Adjustments GAAP 12/31/14 % Change 9/30/15 % Change Total revenues $ 594,403 $ (632) $ 593,771 $ 590,675 0.6% $ 601,37
Slide 34: Stifel Financial Results
Stifel Financial Results Year ended December 31, 2015 Year Ended December 31, 2015 Year Ended (1) ($ in thousands, except per share amounts) Non-GAAP Adjustments GAAP 12/31/14(2) % Change Total revenues $ 2,377,623 $ (630) $ 2,376,993 $ 2,254,747 5.4% Interest expense 42,236 3,163 45,399 41,977 0.6%
Slide 35: Source of Revenues
Source of Revenues Three Months Ended Year Ended % % % ($ in thousands) 12/31/15 12/31/14 Change 9/30/15 Change 12/31/15 12/31/14 Change Commissions $ 187,287 $ 180,127 4.0% $ 194,083 (3.5%) $ 749,536 $ 690,197 8.6% Principal transactions 107,464 91,617 17.3% 95,593 12.4% 389,319 409,929 (5.0%) Brok
Slide 36: Brokerage and Investment Banking Revenues
Brokerage and Investment Banking Revenues Three Months Ended Year Ended ($ in thousands) 12/31/15 12/31/14 % Change 9/30/15 % Change 12/31/15 12/31/14 % Change Global Wealth Management $ 166,339 $ 160,112 3.9% $ 169,319 (1.8%) $ 652,681 $ 638,502 2.2% Institutional Group Equity brokerage 54,837 67,3
Slide 37: Non-GAAP Non-Interest Expenses
Non-GAAP Non-Interest Expenses(1) (1) Excludes adjustments for duplicative items associated with the integration of acquired businesses (merger-related expenses). 37
Slide 38: Global Wealth Management
Global Wealth Management Three Months Ended Year Ended ($ in thousands) 12/31/15 12/31/14 % Change 9/30/15 % Change 12/31/15 12/31/14 % Change Commi s s i ons $ 128,395 $ 115,351 11.3% $ 134,476 (4.5%) $ 504,206 $ 453,730 11.1% Pri nci pa l tra ns a ctions 37,944 44,761 (15.2%) 34,843 8.9% 148,475 1
Slide 39: Stifel Bank & Trust
Stifel Bank & Trust An Operating Unit of GWM As of 12/31/15 As of 12/31/14 As of 9/30/15 Actual ($) Yield (%) Actual ($) Yield (%) % Change Actual ($) Yield (%) % Change Assets Cash 178,075 0.25 119,501 0.31 49.0% 22,173 0.26 703.1% (1) Investment securities 3,479,336 2.75 2,684,947 2.61 29.6% 1,749
Slide 40: Institutional Group
Institutional Group Three Months Ended Year Ended ($ in thousands) 12/31/15 12/31/14 % Change 9/30/15 % Change 12/31/15 12/31/14 % Change Net revenues $ 246,325 $ 276,222 (10.8%) $ 232,125 6.1% $ 975,594 $ 997,071 (2.2%) Compens a tion a nd benefi ts 143,162 169,226 (15.4%) 143,911 (0.5%) 596,561 61
Slide 41: Non-GAAP Other Segment
Non-GAAP Other Segment Year-Over-Year Change 41
Slide 42: Capital Structure
Capital Structure As of As of ($ in thousands) 12/31/15 12/31/14 9/30/15 Total Assets $13,335,915 $ 9,518,151 $ 9,359,179 Stockholders' Equity 2,492,416 2,322,038 2,493,090 4.250% senior notes, due 2024 $ 300,000 $ 300,000 $ 300,000 5.375% senior notes, due 2022 150,000 150,000 150,000 3.50% senior
Slide 43: Share Repurchases
Share Repurchases Shares Avg. Price Cost Through 9/30/15 1,224,000 $ 42.40 $ 51,893,616 Since 9/30/15 3,258,000 $ 39.99 130,302,925 Total 4,482,000 $ 40.65 $ 182,196,541 9.1 Million Shares Remain Under The Current Authorization 43
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