![]() Stifel Financial Corp. August 2016 Exhibit 99.1 |
![]() 2 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 future business prospects of Stifel Financial Corp., as well as Stifel, Nicolaus & Company, Incorporated and its subsidiaries (collectively, “SF” or the “Company”). These statements can be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” and similar expressions. In particular, these statements may refer to our goals, intentions, and expectations, our business plans and growth strategies, our ability to integrate and manage our acquired businesses, estimates of our risks and future costs and benefits, and forecasted demographic and economic trends relating to our industry. You should not place undue reliance on any forward-looking statements, which speak only as of the date they were made. We will not update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under federal securities laws. Actual results may differ materially and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ are included in the Company’s annual and quarterly reports and from time to time in other reports filed by the Company with the Securities and Exchange Commission and include, among other things, changes in general economic and business conditions, actions of competitors, regulatory and legal actions, changes in legislation, and technology changes. Use of Non-GAAP Financial Measures The Company utilized non-GAAP calculations of presented net revenues, compensation and benefits, non-compensation operating expenses, income before income taxes, provision for income taxes, net income, compensation and non-compensation operating expense ratios, pre-tax margin and diluted earnings per share as an additional measure to aid in understanding and analyzing the Company’s financial results for the three and six months ended June 30, 2016. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that may not be indicative of the Company’s operating results and business outlook. The Company believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate a meaningful comparison of the Company’s results in the current period to those in prior periods and future periods. Reference to these non-GAAP measures should not be considered as a substitute for results that are presented in a manner consistent with GAAP. These non-GAAP measures are provided to enhance investors' overall understanding of the Company’s financial performance. |
![]() Our Strategy |
![]() 4 Strategic Vision To build a premier wealth management and investment banking firm 2,298 financial advisors in over 360 branches with more than $200B in client assets Private Client Asset Management Bank $26B in total assets managed through various strategies Equities Sales + Trading $9.4B in assets funded by client deposits Global Wealth Management Institutional Fixed Income Sales + Trading Investment Banking Research Experienced sales force with extensive distribution capabilities Comprehensive platform including research, strategy and DCM teams Over 350 professionals with extensive experience across all products and industry verticals Largest research platform with approximately 1,300 U.S. and 290 European stocks covered |
![]() 5 A History of Growth 2005 Legg Mason’s Capital Markets Division 2008 Butler Wick 2009 56 UBS Private Client Branches 2010 Thomas Weisel Partners 2007 Ryan Beck Acquisition Stifel Bank & Trust 2011 Stone & Youngberg 2012 Miller Buckfire 2013 Knight Capital Group’s Fixed Income Division 2014 De La Rosa, Oriel Securities, 1919 Investment Counsel, Merchant Capital 2013 Keefe, Bruyette & Woods 2013 Acacia Bank & Ziegler Lotsoff 2015 Barclays Wealth & Investment Management, Sterne Agee, Sidoti Joint Venture, Leumi Partners Collaboration Agreement * 2016 Net Revenue annualized based on 1H16 results and adjustment for 2H16 for impact of the sale of legacy Sterne Agee business 2016 Eaton Partners ISM Capital |
![]() Driving Shareholder Value Through Deal Integration & Balance Sheet Growth |
![]() 7 Core & GAAP EPS to Converge as Deal Charges Realized Footnotes: • EPS estimates for 3Q16 - 4Q17 as well as 2016 and 2017 based on consensus core EPS estimates as of 8/15/2016 • Analysis of convergence between Core and GAAP EPS based solely on current announced acquisitions. 2012 2013 2014 2015 2016 2017 Core $0.63 $0.58 $0.60 $0.53 $0.79 $0.69 $0.68 $0.64 $0.75 $0.65 $0.71 $0.60 $0.51 $0.57 $0.69 $0.60 $0.68 $0.65 $0.74 $0.72 $0.84 GAAP $0.63 $0.21 $0.40 $1.00 $0.64 $0.63 $0.58 $0.52 $0.58 $0.56 $0.27 $0.22 $0.14 $0.36 $0.15 $0.30 $0.60 $0.61 $0.70 $0.68 $0.80 CORE to GAAP% 100% 36% 67% 189% 81% 91% 85% 81% 77% 86% 38% 37% 27% 63% 22% 51% 88% 94% 94% 94% 95% Share Price $31.97 $34.67 $35.67 $41.22 $47.92 $49.76$47.35 $46.89 $51.02 $55.75$57.74 $42.10 $42.36 $29.60 $31.45 Price Growth 0% 8% 12% 29% 50% 56% 48% 47% 60% 74% 81% 32% 32% -7% -2% Net Revenue $411 $439 $495 $480 $565 $548 $561 $525 $578 $564 $598 $592 $582 $620 $652 NR Growth 0% 7% 20% 17% 37% 33% 37% 28% 41% 37% 45% 44% 42% 51% 59% Diluted Shares 63 69 74 75 75 76 76 77 78 77 78 80 79 76 76 Share Growth 0% 9% 17% 19% 19% 20% 19% 21% 22% 22% 23% 26% 26% 20% 20% |
![]() 8 Balance Sheet Growth Balance sheet growth has resumed with ability to further lever the existing capital base Ratio 2008 2009 2010 2011 2012 2013 2014 2015 Q1 16 Q2 16 Illustrative Tier 1 Leverage 32.3% 30.5% 25.6% 21.4% 17.7% 15.4% 16.5% 16.6% 11.6% 11.5% 9.5% Tier 1 Risk Based Capital 49.4% 40.5% 29.1% 27.4% 26.8% 26.7% 25.0% 26.3% 21.3% 20.9% 19.9% Risk Weighting Assets Density 64.9% 56.2% 67.3% 62.7% 57.0% 50.7% 58.2% 46.6% 49.0% 49.1% 50.0% Infrastructure Build |
![]() 9 Bank Drove Significant Balance Sheet & Revenue Growth Bank growth has been balanced between loans and investments: Loans: • Comprised of securities based loans, C&I, and residential mortgages • Focused lending to high net worth retail clients • Effective duration of approximately 1 year as of 6/30/16 AFS & HTM Investments: • 67% of the portfolio is fully guaranteed by a US GSE or rated AAA as of 6/30/16 • Portfolio primarily GSE MBS, ABS, and Corporate bonds • Effective duration of approximately 2 years Impact of Bank Growth LTM on Consolidated Results (mil.) 6/30/2015 6/30/2016 Total consolidated assets $10,140 $15,385 Investment securities $1,913 $4,587 Loans $2,604 $4,422 Total deposits $4,314 $7,881 Total equity $2,520 $2,491 Annualized NII $135 $194 Tier 1 Risk Based Capital 29.4% 20.9% Tier 1 Leverage 18.3% 11.5% NIM (Bank) 2.52% 2.36% ROAA (Bank) 1.48% 1.25% ROAE (Bank) 19.1% 18.6% NPAs/Assets 0.14% 0.37% |
![]() ![]() 10 Potential Impact of Target Asset Levels on Results Targeted Bank Growth Would have Significantly Impacted Second Quarter Results: • Pro forma: • Tier 1 capital levels up 10% • RWA up 15% • Net revenue up 4% • Pre-tax margin up 290 bps • 2Q16 EPS up $0.15 • Annualized 2Q16 EPS up 22% Excess Capital Opportunities to Support Further Growth: • As GAAP deal related expenses run off, organic capital growth is expected to accelerate. • Additional capital flexibility as a result of sale of Sterne Agee legacy businesses and preferred share issuance. • Ability to downstream capital from holding company to bank to support growth. • Changes in money market regulations could generate increased bank sweeps. Footnotes: • Normalized; • Results incorporate average assets at targeted period-end level, reversal of non-recurring interest expenses • Preferred & Fully Levered: • Expenses assume an 80% pre-tax margin on incremental bank revenues. • Tier 1 capital, net income to common equity, and EPS account for impact of $9.4 mil. of annual preferred dividends Impact of Bank Growth to Targeted Levels (mil.) 6/30/2016 Normalized 6/30/2016 Preferred & Fully Levered Average Assets $13,599 $15,000 $18,000 Risk Weighted Assets $7,483 $7,866 $8,629 Tier 1 Capital $1,565 $1,573 $1,717 Tier 1 Risk Based Capital 20.9% 20.0% 19.9% Tier 1 Leverage 11.5% 10.0% 9.5% Revenue $652 $660 $680 Bank NIM 2.36% 2.42% 2.42% Compensation $410 $410 $411 Non-compensation operating expense $158 $159 $162 Pre-tax income $84 $91 $107 Net income $52 $56 $66 Net income to common equity $52 $56 $64 EPS $0.69 $0.74 $0.84 Pre-tax operating margin 12.9% 13.7% 15.8% Annualized EPS $2.75 $2.96 $3.36 |
![]() Stifel Overview |
![]() 12 Stifel – Premier Investment Bank and Wealth Management Firm Stifel at a Glance GAAP Net Revenue - $2,446 million (Q2’16 LTM) Global Wealth Management (GWM) Net Revenue - $1,470 million (Q2’16 LTM) Private Client Stifel Bank & Trust Margin and Securities-based Lending Asset Management Institutional Group (IG) Net Revenue - $980 million (Q2’16 LTM) Equity & Fixed Income Capital Raising M&A Advisory / Restructuring Institutional Equity and Fixed Income Brokerage Independent Research (1) Assets / equity (as adjusted). (2) As of 6/30/2016. (3) As of 7/29/2016. (4) Insider ownership percentage includes all fully diluted shares, units outstanding and options outstanding, as of 4/11/2016. (5) Excludes 540 independent advisors from legacy Sterne Agee business sold to INTL FCStone Low leverage (6.2x) (1) (2) , $2.5 billion stockholders’ equity (2) and $2.4 billion market capitalization (3) 34% Insider ownership aligns employees' interests with other shareholders (4) Over 7,000 associates (3) Balanced business mix (60% GWM / 40% IG) (2016 YTD net revenues) National presence with approximately 2,300 financial advisors (2) (5) Largest U.S. equity research platform with roughly 1,300 stocks under coverage (3) Broad investment banking and institutional sales and trading capabilities – domestic and international |
![]() 13 Leading broker-dealer providing wealth management and institutional services to consumers and companies Stifel’s Differentiated Value Proposition: Growth, Scale and Stability #6 Largest Retail Brokerage Network (2) LARGEST provider of U.S. equity research 2 nd LARGEST Equity trading platform in the U.S. outside of the Bulge Bracket firms (1) FULL SERVICE investment banking with expertise across products and industry sectors ACCESS TO top ten private client platform (1) Based on 2015 U.S. trading volume per Bloomberg. (2) Source: SIFMA and publicly available information for U.S. brokerage networks. Includes investment banks only. Stifel figure reflects sale of legacy Sterne Agee Independent Contractor business. Bank of America Merrill Lynch 10 Janney Montgomery Scott 725 Rank Firm Brokers 1 16,134 2 Morgan Stanley Wealth Management 16,000 3 Wells Fargo Securities 15,187 4 UBS 6,997 5 Raymond James 6,265 6 Stifel 2,298 7 RBC Capital Markets 2,000 8 Oppenheimer & Co Inc 1,300 9 JPMorgan 800 Bulge Bracket Boutique Size / scale Large distribution Trading Retail Issues Lack of focus Banker turnover Lack of commitment Research indifference Lack of growth investors Firm focus Good research Growth investor access Issues Financial / firm stability Trading support Few with retail Size / scale Firm focus Stability (financial & personnel) Large distribution Trading Outstanding research Retail Wealth Management Institutional |
![]() 14 Well-diversified, low risk business model with balanced retail and institutional exposure 14 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 business Drive revenue synergies by leveraging the wealth management and institutional business Net Revenues 2015 2016 YTD Non-GAAP Operating Contribution Balanced business model facilitates growth in all market environments Note: Net revenues and operating contribution percentages excludes the Other segment. 2015 2016 YTD |
![]() 15 (1) CAGR reflects years 2006 through Q2’16 YTD Annualized. (2) Excludes impact of sale of Sterne Agee Independent Contractor & Correspondent Clearing businesses (3) Book Value Per Share adjusted for April 2011 three-for-two stock split (2006-2010). CAGR: 16% CAGR: 21% Non-GAAP Net Revenues ($MM) (1) Non-GAAP Net Income ($MM) (1) Total Equity ($MM) (1) Total Client Assets (1) (2) ($BN) Book Value Per Share (1) (3) CAGR: 19% CAGR: 17% CAGR: 28% A Stable Track Record Through Multiple Business Cycles $35 $59 $53 $94 $114 $122 $138 $166 $187 $220 $226 $0 $50 $100 $150 $200 $250 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 |
![]() Global Wealth Management |
![]() 17 (1) Excludes 540 legacy Sterne Agee Independent Contractors included in sale to INTL FCStone. (2) Full year 2016 net revenue and operating contribution adjust for impact to 2H16 due to sale of legacy Sterne Agee businesses. Global Wealth Management (GWM) Provides Securities Brokerage Services and Stifel Bank Products Net Revenues (2) ($MM) Operating Contribution (2) ($MM) Overview National Presence Grown from 600+ financial advisors in 2005 to nearly 2,300 (1) financial advisors currently Proven organic growth and acquirer of private client business Strategy of recruiting experienced advisors with established client relationships Expanding U.S. footprint |
![]() 18 Building Scale and Capabilities into a $1.5B Revenue Segment… Private Client – 350 financial advisors and support Revenue production has exceeded expectations October 2009 Bank holding company Grown assets from ~ $100M to $7.3B April 2007 Private Client – 75 financial advisors Public Finance December 2008 Private Client – 400 financial advisors Capital Markets February 2007 Asset Management Over $4 billion in assets November 2013 One-branch community bank; 95% of loan portfolio sold in 3Q15 October 2013 Customized investment advisory and trust services November 2014 Private Client Asset Management Bank ~100 advisors managing over $20B in AUM December 2015 ~130 advisors managing ~ $10B in AUM June 2015 |
![]() 19 (1) Excludes Legacy Sterne Agee Independent Contractor Business. Key Operating Metrics Accounts (1) Financial Advisors (1) Total Client Assets (1) ($MM) Branches (1) GWM - Private Client Group |
![]() 20 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 Substantial Balance sheet growth with low-risk assets Funded by Stifel Nicolaus client deposits Maintain high levels of liquidity Overview Key Statistics (000s) Interest Earnings Assets (1) Note: Data as of 6/30/16. (1) Average interest earning assets for quarter ended 6/30/16. (2) Non-agency MBS makes up less than 1% of Investment Portfolio. (3) Other includes construction and land, consumer loans, and home equity lines of credit. (4) NPAs include: nonaccrual loans, restructured loans, loans 90+ days past due, and other real estate owned. Total assets $9,431,000 Total deposits 7,881,000 Total equity 613,000 ROAA 1.3% ROAE 18.6% Tier 1 Risk Based Capital 13.7% Tier 1 Leverage 7.4% NPAs/Assets 0.4% |
![]() Growing Asset Management Capabilities Total Assets: $26.3 Billion¹ Assets $11.4 Billion $10.3 Billion $2.5 Billion $889* Million $1.2 Billion Offices Chicago St. Louis Milwaukee New York San Francisco Baltimore Cincinnati New York Philadelphia Baltimore New York Florham Park, NJ ¹As of 6/30/2016 *Sagewood assets represent billable assets EquityCompass Strategies is a research and investment advisory unit of Choice Financial Partners, Inc. (“Choice”). Choice and Ziegler Capital Management, LLC (“ZCM”) are wholly-owned subsidiaries and affiliated SEC Registered Investment Advisers of Stifel Financial Corp. (“Stifel”). Sagewood Asset Management LLC is a wholly-owned subsidiary of ZCM. 1919ic is an SEC Registered Investment Adviser and indirect subsidiary of Stifel. 1919 IC&T is an OCC-regulated national trust company that is a wholly-owned subsidiary of Stifel. Washington Crossing Advisors is a Stifel investment advisory program. Assets Under Management represents the aggregate fair value of all discretionary and non-discretionary assets, including fee-paying and non-fee-paying portfolios. Assets Under Advisement represent advisory-only assets where the firm provides a model portfolio and does not have trading authority over the assets. |
![]() Institutional Group |
![]() 23 (1) Based on 2015 U.S. trading volume per Bloomberg. (2) Includes Thomas Weisel historical investment banking revenues for years 2006 through September 30, 2010. (3) 2012 includes realized and unrealized gains on the Company’s investment in Knight Capital Group, Inc. of $39.0 million. Institutional Group Net Revenues ($MM) (2)(3) Fixed Income Brokerage + Investment Banking Overview 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 Investment Bank Comprehensive Fixed Income platform Equity Brokerage + Investment Banking (2) |
![]() 24 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 Sales and Trading / Research February 2013 Restructuring advisory December 2012 Fixed Income Sales and Trading – U.S. & Europe Fixed Income Research July 2013 California-based investment bank and bond underwriter April 2014 UK-based full service investment bank July 2014 Expands Public Finance in Southeast December 2014 Equities Fixed Income Investment Banking Highly complementary fixed income platforms June 2015 One of the largest, global fund placement and advisory firms January 2016 Enhances European debt capital markets capabilities February 2016 |
![]() 25 Institutional Group – Investment Banking Accomplished U.S. Equity Underwriting Franchise – All Equity Transactions Bookrun Equity Deals Since 2010 All Managed Equity Deals Since 2010 Source: Dealogic. Rank eligible SEC registered IPOs and Follow-On offerings since 2010. Includes demutualizations. As of 2/29/16. Overlapping deals between Stifel and its acquired firms have been removed. Note: $ Volume represents full credit to underwriter for All Managed Equity Deals and apportioned credit to bookrunner for Bookrun Equity Deals. Bold font indicates middle-market firms. ($ in billions) # of $ Rank Firm Deals Volume 1 Bank of America Merrill Lynch 1,419 $798.3 2 JPMorgan 1,405 $795.8 3 Citi 1,293 $787.6 4 Morgan Stanley 1,264 $760.6 5 Barclays 1,165 $657.4 6 Credit Suisse 1,152 $657.0 7 Wells Fargo Securities 1,122 $584.4 8 Goldman Sachs 1,056 $675.1 9 Deutsche Bank 1,043 $621.6 10 Stifel / KBW 1,031 $325.5 11 RBC Capital Markets 1,017 $483.8 12 UBS 780 $433.1 13 Raymond James & Associates 750 $320.2 14 Piper Jaffray & Co 637 $248.9 15 Jefferies LLC 591 $139.4 16 Robert W Baird & Co 561 $154.9 17 JMP Securities LLC 494 $90.9 18 Oppenheimer & Co Inc 478 $118.5 19 Cowen & Company LLC 474 $92.5 20 William Blair & Co LLC 441 $113.5 21 KeyBanc Capital Markets 440 $187.9 22 BMO Capital Markets 407 $156.0 23 Canaccord Genuity Corp 362 $46.5 24 SunTrust Robinson Humphrey 344 $168.1 25 Ladenburg Thalmann & Co 312 $44.2 ($ in billions) # of $ Rank Firm Deals Volume 1 Bank of America Merrill Lynch 1,303 $150.4 2 JPMorgan 1,264 $165.6 3 Morgan Stanley 1,160 $166.8 4 Citi 1,142 $154.4 5 Barclays 986 $133.5 6 Goldman Sachs 967 $155.5 7 Credit Suisse 962 $123.2 8 Deutsche Bank 840 $94.8 9 Wells Fargo Securities 792 $61.4 10 UBS 567 $55.9 11 RBC Capital Markets 506 $38.7 12 Jefferies LLC 492 $27.0 13 Stifel / KBW 357 $17.1 14 Raymond James & Associates 249 $11.3 15 Piper Jaffray & Co 234 $9.3 16 Cowen & Company LLC 225 $8.0 17 Leerink Partners LLC 168 $7.6 18 Roth Capital Partners 149 $2.6 19 Robert W Baird & Co 144 $5.7 20 BMO Capital Markets 141 $8.7 21 Aegis Capital Corp 103 $1.4 22 KeyBanc Capital Markets 102 $6.0 23 William Blair & Co LLC 96 $3.6 24 Sandler O'Neill & Partners 84 $6.2 25 Canaccord Genuity Corp 76 $3.0 |
![]() 26 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 Largest provider of U.S. Small Cap Research² #1 U.S. provider of Financial Services coverage Only firm ranked in the Top 12 each year for the last ten years in the Wall Street Journal’s “Best on the Street” Survey (1) Source: StarMine rankings as of 7/29/16. Overall coverage includes only companies with a rating & domiciled in the U.S. Does not include Closed End Funds. Small Cap includes market caps less than $1 billion; Mid Cap includes market caps less than $5 billion. (2) Small Cap includes market caps less than $1 billion. Note: Bold font indicates middle-market firms. Companies Under Coverage Rank Firm Overall Mid Cap Small Cap 1 Stifel/KBW 1,286 455 427 2 JPMorgan 1,127 409 175 3 BofA Merrill Lynch 1,081 411 131 4 Wells Fargo 974 348 190 5 Jefferies 952 329 207 6 Morgan Stanley 926 302 114 7 Raymond James 911 337 260 8 Goldman Sachs 901 296 71 9 Citi 898 297 126 10 Barclays 880 295 99 11 RBC Capital Markets 866 310 115 12 Deutsche Bank 854 273 129 13 Credit Suisse 849 278 148 14 UBS 725 201 80 15 Piper Jaffray 664 235 220 16 Robert W. Baird & Co 642 234 128 17 Cowen 623 180 182 18 Suntrust Robinson Humphrey 606 244 139 19 William Blair & Co 586 226 157 20 Evercore 567 146 56 21 Morningstar 559 119 17 22 Keybanc 549 262 108 23 BMO Capital Markets 526 151 75 24 Macquarie 457 161 83 25 Oppenheimer 451 139 108 Small Cap 34% Mid Cap 35% Large Cap 31% |
![]() 27 Institutional Equity Sales Equity Trading Institutional Group – Equity Sales and Trading 27 Extensive Distribution Network Powerful Platform Spanning North America and Europe Relationships with over 3,500 institutional accounts globally Active daily market maker in over 3,700 stocks Traded over 11.8 billion shares in 2015 Complete coverage of North America and Europe for North American listed equities Major liquidity provider to largest equity money management complexes Multi-execution venues: high-touch, algorithms, program trading, and direct market access Dedicated convertible sales, trading, and research desk 34 sales traders located in Baltimore, New York, Boston, Dallas, San Francisco, and London 12 position traders covering each major industry 10 specialized traders focused on: Option Trading Profitable model with advantages of scale 84 person sales force, commission-based Experts in small and mid cap growth and value Team-based sales model with 2 - 4 coverage sales people per account Team leaders have an average of 15 years experience Offices in all major institutional markets in North America & Europe Accounts range from large mutual funds to small industry- focused investors Managed over 732 non-deal roadshow days in 2015 Extensive experience with traditional and overnight corporate finance transactions |
![]() 28 Overview Institutional Group – Fixed Income Capital Markets Client Distribution (1)(2) Platform & Products (1) Client Distribution is as of 8/10/2016 (2) Other category includes: Credit Union, Corporation, Hedge Fund, Pension Fund, Trust Company, Foundation, Endowment, University & Non-Profit. Comprehensive platform 89 traders with annual client trade volume approaching $500 billion 58-person Fixed Income Research and Strategy Group Widespread distribution More than 240 Institutional sales professionals covering over 11,650 accounts 47 institutional fixed income offices nationwide European offices in London and Zurich Customer-driven Focus on long-only money managers and income funds, depositories, and hedge funds Consistency of execution Identification of relative value through asset class/security selection High Yield and Distressed Credit Loan Trading Group Aircraft Finance & Credit Solutions Hybrid Securities Emerging Markets Structured Products Investment Grade Credit Municipal Sales and Trading and Public Finance UK Sales and Trading Strong Fixed Income Brokerage Capabilities Broker/Dealer 7% Corporation 1% Credit Union 1% Money Manager 58% Government 3% Bank or thrift 17% Hedge Fund 3% Insurance Company 7% Trust Company 1% Other 2% US Government and Agency Securities Mortgage-Backed Securities (MBS) Whole Loans Government-Guaranteed Loans Asset-Backed Securities (ABS) Commercial Mortgage-Backed Securities (CMBS) Certificates of Deposit Cleared Products Group |
![]() Overview Institutional Group – Public Finance 29 Stifel has ranked in the top ten nationally for senior managed negotiated underwritings for the past five years, and Stifel has ranked #1 nationally for senior managed K-12 negotiated underwritings for 2015. Stifel’s Public Finance Group ranked #1 in municipal negotiated issues in 2015 Total of 26 Public Finance offices Nearly 150 Public Finance professionals Public Finance Underwritings Specialty sectors: Education Local Government/Municipal Healthcare Public-Private Partnerships/Development Housing Source: Thomson Reuters: SDC (True Economics to Book) Ranked by number of transactions. Negotiated # Par Amount # Par Amount # Par Amount Senior Manager/ Private Placement 857 $14,677 1034 $19,749 630 $11,860 Co-Manager 192 $36,506 255 $38,094 174 $34,775 Total 1049 $51,183 1289 $57,843 804 $46,635 Competitive # Par Amount # Par Amount # Par Amount Senior Manager 92 $604 67 $1,367 65 $3,358 Co-Manager 330 $8,725 405 $21,171 345 $9,259 Total 422 $9,329 472 $22,538 410 $12,617 2016 YTD 2015 2014 2016 YTD 2015 2014 |
![]() Financial Information |
![]() Net Revenue • Total net revenue of $652 mil. in 2Q16 was 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 • Net Interest Income was flat sequentially but up 44% Y/Y • Global Wealth Management represented 59% of net revenue vs. 61% in 1Q16 and 57% in 2Q15 • Institutional net revenue of $261 mil. increased 8% sequentially & 1% Y/Y $- $100 $200 $300 $400 $500 $600 $700 2Q15 3Q15 4Q15 1Q16 2Q16 Net Interest Income Asset Management & Service Fees Investment Banking Brokerage Revenue $598 $592 $581 $620 $652 $343 $357 $347 $380 $386 $259 $232 $246 $241 $261 $- $100 $200 $300 $400 $500 $600 $700 2Q15 3Q15 4Q15 1Q16 2Q16 Global Wealth Management Institutional Core Net Revenue (mil.) Core Segment Net Revenue (mil.) 31 |
![]() Global Wealth Management • Total net revenue in the GWM segment was $386 mil. in 2Q16, 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 income increased 5% sequentially & 45% Y/Y • 2,838 total FAs* • $237.5 bil. in client AUA* • Compensation ratio was 56.6% down 170 bps sequentially & 50 bps Y/Y • Non-comp. ratio was 16.2% down 90 bps sequentially but up 70 bps Y/Y • Pre-tax margin was 27.2% up 260 bps sequentially but down 20 bps Y/Y. * Total FA and client AUA are as of 6/30/2016. Included in these figures are 540 independent contractor FAs and $11.5 bil. of AUA, that were part of the legacy Sterne Agee business sold to INTL FCStone on July 1, 2016 -$50 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 2Q15 3Q15 4Q15 1Q16 2Q16 Brokerage Asset Management & Service Fees Net Interest Investment Banking Other GWM Core Net Revenue (mil.) 23.0% 23.5% 24.0% 24.5% 25.0% 25.5% 26.0% 26.5% 27.0% 27.5% 28.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2Q15 3Q15 4Q15 1Q16 2Q16 Comp. Ratio Non-comp. Ratio Pre-tax Margin Core Expense Ratios & Pre-Tax Margin 32 |
![]() Stifel Bank & Trust • Total net revenue at Stifel Bank & Trust was $56 mil. in 2Q16 was 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 12 bps sequentially & 16 bps Y/Y • Allowance for loan losses as a percentage of loans 0.86% of total loans vs. 0.94% in 1Q16 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2Q15 3Q15 4Q15 1Q16 2Q16 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 2Q15 3Q15 4Q15 1Q16 2Q16 Cash Investment Securities Bank Loans Net Revenue (mil.) Asset Growth 33 |
![]() Institutional Group Core Expense Ratios & Pre-Tax Margin • Total net revenue of $261 mil. in 2Q16 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 7% sequentially but increased 23% Y/Y • Compensation ratio was 58.8% down 360 bps sequentially & 310 bps Y/Y • Non-comp. ratio was 25.0% down 50 bps sequentially but up 310 bps Y/Y • Pre-tax margin was 16.2% up 410 bps sequentially but flat Y/Y. 34 |
![]() Institutional Brokerage & Investment Banking Equity & Fixed Income Brokerage Net Revenue Investment Banking Net Revenue • Brokerage revenue in 2Q16 was $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 57% Y/Y • Advisory revenue of $68 mil. increased 43% sequentially & 7% Y/Y • Underwriting revenue of $56 mil. increased 25% sequentially but declined 32% Y/Y • Equity underwriting of $27 mil. increased 43% sequentially but declined 46% Y/Y • Fixed income underwriting of $29 mil. increased 12% sequentially but declined 12% Y/Y 35 |
![]() GAAP to Non-GAAP Reconciliation GAAP Results (000s) 06/30/16 03/31/16 Total GAAP Compensation & benefits expense 460,023 $ 411,113 $ GAAP comp. ratio 70.5% 66.3% Total GAAP non-compensation expense 176,328 $ 164,948 $ GAAP non-comp. ratio 27.0% 26.6% GAAP pre-tax margin 1.5% 4.4% Three months ended Adjusted Results (000s) 06/30/16 03/31/16 Total Adjusted Compensation & benefits expense 409,887 $ 394,684 $ Adjusted comp. ratio 62.8% 63.6% Total adjusted non-compensation expense 157,974 $ 154,829 $ Adjusted non-comp. ratio 24.2% 25.0% Adjusted pre-tax margin 12.9% 11.4% Three months ended (000s) 06/30/16 03/31/16 GAAP net income 9,772 $ 27,054 $ Duplicative expenses: Compensation & benefits 3,354 5,151 Non-compensation operating expenses 11,378 8,134 Acquistion-related expenses: Compensation & benefits 10,806 11,278 Non-compensation operating expenses 1,297 1,424 Stock-based compensation expense 35,976 - Amortization of intangible assets 5,854 709 Total adjustments: Compensation & benefits 50,136 16,429 Non-compensation operating expenses 18,529 10,267 Total non-GAAP adjustments 68,665 26,696 Provision for income tax 26,145 10,397 Non-GAAP net income 52,292 $ 43,353 $ Total Adjusted Compensation & benefits expense 410,500 $ 394,684 $ Adjusted comp. ratio 62.9% 63.6% Total adjusted non-compensation expense 157,800 $ 154,828 $ Adjusted non-comp. ratio 24.2% 25.0% Adjusted pre-tax margin 12.9% 11.4% Three months ended 36 |
![]() ![]() Balance Sheet & Capital Return • Balance Sheet: • Total assets increased to $15.4 bil. in 2Q16, 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. • Tier 1 leverage ratio was 11.5% in 2Q16 down 10 bps sequentially • Tier 1 risk based capital ratio of 20.9% in 2Q16 was down 40 bps sequentially • Book value per share was $37.41 • Share Repurchases • The firm repurchased 125K shares in 2Q16 and has repurchased 475K to date in 3Q16 • 7.6 mil. shares remaining on current authorization. Net Interest Income Drivers 2Q15 3Q15 4Q15 1Q16 2Q16 Total Assets $10,140 $9,359 $13,326 $14,214 $15,386 Total Equity $2,520 $2,493 $2,492 $2,417 $2,491 Debt to Equity 21.2% 21.4% 33.4% 34.1% 32.4% Tier 1 Leverage Ratio 18.3% 16.4% 16.6% 11.6% 11.5% Tier 1 Risk Based Capital Ratio 29.4% 29.4% 26.3% 21.3% 20.9% Capital Structure (in millions, except ratios) 37 |