wolfe research wealth symposium
TRANSCRIPT
Disclaimer
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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 acquiredbusinesses, 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-lookingstatements, 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 todiffer 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 ExchangeCommission and include, among other things, changes in general economic and business conditions, actions of competitors, regulatory and legal actions, changes inlegislation, and technology changes.
Use of Non-GAAP Financial Measures
The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the ninemonths ended September 30, 2021. Specifically, the Company believes that the non-GAAP measures provide useful information by excluding certain items that maynot be indicative of the Company’s core operating results and business outlook. The Company believes that these non-GAAP measures will allow for a betterevaluation 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 andfuture 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 current financial performance. The non-GAAP financialinformation should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financialperformance prepared in accordance with GAAP. These non-GAAP measures primarily exclude expenses which management believes are, in some instances, non-recurring and not representative of ongoing business.
A limitation of utilizing these non-GAAP measures is that the GAAP accounting effects of these charges do, in fact, reflect the underlying financial results of theCompany’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measuresand the same respective non-GAAP measures of the Company’s financial performance should be considered together.
A History of Organic Growth & Acquisitions
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$452
$763 $870$1,091
$1,382 $1,393$1,594
$1,973$2,208
$2,332$2,575
$2,926 $3,025
$3,337
$3,752
$3,433
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
GAAP N
et Revenues ($M
M)
2005Legg Mason’s Capital
Markets Division
2007Ryan Beck Acquisition
Stifel Bank & Trust
2008Butler Wick
200956 UBS Private Client
Branches
2010Thomas Weisel
Partners
2011Stone & Youngberg
2012Miller Buckfire
2013Keefe, Bruyette &
WoodsKnight Capital Group Fixed Income Division
Acacia BankZiegler Lotsoff
2014De La Rosa,
Oriel Securities,1919 Investment
Counsel,Merchant Capital
2015Barclays Wealth &
Investment Management,Sterne Agee,
2016Eaton Partners
ISM Capital
2017City
Securities
2018Ziegler Wealth Management,
Business Bancshares Inc.
2019First Empire
MainFirstMooreland Partners
GMP George K. Baum
B&F Capital Markets
* 2021 full year GAAP net revenues based on annualized results as of 09/30/2021.
2021Vining Sparks
A Diversified Growth Company
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$2,332$2,580
$2,928 $3,025
$3,337
$3,752
$4,493
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2015 2016 2017 2018 2019 2020 LTM
millions
$1.27
$1.75
$2.66
$3.52
$4.07
$4.56
$6.52
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2015 2016 2017 2018 2019 2020 LTM
10.4%
13.1%
17.1%
19.6% 19.9%19.0%
23.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2015 2016 2017 2018 2019 2020 LTM
53% 52% 49% 50% 47% 46% 45%
41% 39%38% 34% 36% 42% 45%
6% 9% 13% 16% 16% 12% 10%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2015 2016 2017 2018 2019 2020 LTM
Private Client Group Institutional Group Net Interest Income
Net Revenue1 Earnings Per Share1,2
Pre-tax Margin1 Revenue Contribution by Segment
(1) Non-GAAP(2) Incorporates impact of the December 2020 3:2 stock split.
2015 - LTM CAGR: 12% 2015 - LTM CAGR: 31%
Stifel – Premier Investment Bank and Wealth Management Firm
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Stifel at a Glance LTM1 GAAP Net Revenue - $4.5 billion
Global Wealth Management (GWM)LTM1 Net Revenue - $2.5 billion
Institutional Group (IG)LTM1 Net Revenue - $2.0 billion
Private Client
Stifel Bancorp
Margin and Securities-based Lending
Asset Management
Equity & Fixed Income Capital Raising M&A Advisory / Restructuring Institutional Equity and Fixed Income Brokerage Independent Research
Low leverage (6.4x) (1) (2), $4.8 billion stockholders’ equity (1) and $7.7 billion market capitalization (3)
27% Insider ownership aligns employees' interests with other shareholders (4)
Approximately 8,600 full-time associates(1)
Balanced business mix (55% GWM / 45% IG) (LTM net revenues)
National presence with 2,302 financial advisors(1)
2nd largest U.S. equity research platform with approximately 1,126 stocks under coverage(1)
Broad investment banking and institutional sales and trading capabilities – domestic and international
(1) As of 09/30/2021 (2) Assets / equity.(3) As of 10/28/2021(4) Insider ownership percentage includes all units outstanding, as of March 29, 2021.
Leading broker-dealer providing wealth management and institutional services to consumers and companies
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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
Institutional Wealth Management
2nd LARGEST provider of U.S. equity research
5th LARGEST U.S. investment bank by U.S. equity
trading volume 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
#7 Largest Retail Brokerage Network(2)
(1) Based on 2020 U.S. trading volume per Bloomberg, as of 12/31/2020(2) Source: Publicly available information for U.S. brokerage networks. Includes investment banks only. (3) Morgan Stanley brokers based on 12/31/2020 results as the firm no longer reports number of Financial Advisors.
Rank Firm Brokers
1 Bank of America Merrill Lynch 18,855
2 Morgan Stanley Wealth Management (3) 15,950
3 Wells Fargo Securities 12,552
4 Raymond James Financial 8,482
5 UBS 6,266
6 JPMorgan 2,646
7 Stifel Financial Corp. 2 ,302
8 Oppenheimer & Co. 1,003
Global Wealth Management (GWM)
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Provides Securities Brokerage Services and Stifel Bank Products
Overview National Presence
Grown from 600+ financial advisors in 2005 to 2,302 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 through employee & independent financial advisor channels
Net Revenues ($MM) (1) Operating Contribution ($MM) (1)
$908$992
$1,117$1,233
$1,377
$1,563
$1,822
$1,990
$2,131$2,191
$1,925
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
$2,800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
$235$267
$300$347
$382$430
$627
$737$786
$726
$683
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
• 2017 full year net revenue and operating contribution based on annualized results as of 9/30/2017(1) 2018 full year results based on annualized result as of 9/30/2018(1) 2021 full year net revenues & operating contribution based on annualized results as of 09/30/2021.
GWM – Stifel Bancorp, Inc.
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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) (1)(2)
Total assets $22,165
Total deposits 20,399
Total equity 1,608
ROAA 1.43%
ROAE 19.50%
Tier 1 Risk Based Capital 10.70%
Tier 1 Leverage 7.00%
NPAs/Assets 0.04%
Investment Portfolio Loan Portfolio(3)Interest Earning Assets
3%
34%
63%
Cash Investment Securities Loans
75%
11%
13%1%
ABS Corporates Agency MBS Other
19%
37%
36%
3%5%
Securities-based lending Commercial and industrial
Residential real estate Commercial real estate
OtherNote: Key Statistic Data as of 9/30/2021.(1) ROAA, ROAE, as well as Tier 1 capital ratios specific to Stifel Bank & Trust (2) NPAs include: nonaccrual loans, restructured loans, loans 90+ days past due, and other real estate owned.(3) Other includes construction and land, consumer loans, and home equity lines of credit.
Institutional Group
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Net Revenues ($MM)(2) (3)
Fixed Income Capital Markets Net Revenues(3)(4)
Overview
Equity Capital Markets Net Revenues (3)(4)
Provides securities brokerage, trading, research, underwriting and corporate advisory services
2nd largest provider of U.S. Equity Research
5th largest U.S Investment bank by U.S. equity trading volume outside of the Bulge Bracket firms(1)
Full-service Investment Bank
Comprehensive Fixed Income platform
$507$605
$861
$997 $976$1,014
$1,111$1,055
$1,214
$1,583
$1,519
$0
$350
$700
$1,050
$1,400
$1,750
$2,100
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
$179
$247
$285$322
$404$432
$382
$297
$416
$652
$508
$0
$100
$200
$300
$400
$500
$600
$700
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(1) Based on 2020 U.S. trading volume per Bloomberg., as of 12/31/2020. (2) 2012 includes realized and unrealized gains on the Company’s investment in Knight Capital Group, Inc. of $39.0 million(3) 2021 full year results based on annualized results as of 09/30/2021 (4) Equity and Fixed Income Net Revenues comprised of Brokerage, Investment Banking, Net Interest Income, and Other(5) 2020 full year net revenue based on annualized results as of 09/30/2020(6) 2019 full year net revenues based on annualized net revenue as of 9/30/2019
$329$357
$576
$675
$571 $582
$729 $759$798
$931
$1,011
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021