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| 8-K - 8-K - STIFEL FINANCIAL CORP | d795584d8k.htm |
 Stifel Financial Corp.
September 2014
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,
2014.
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
core
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. |
 Stifel Overview |
 4
Stifel –
Premier Investment Bank and Full-Service Investment Firm
Stifel
at a Glance
Net Revenue -
$1,973 million (2013)
Global Wealth Management (GWM)
Net Revenue -
$1,117 million (2013)
Private Client
Stifel Bank & Trust
Margin and Securities-based Lending
Asset Management
Institutional Group (IG)
Net Revenue -
$861 million (2013)
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 6/30/2014.
(3)
As of 9/9/2014.
(4)
Insider ownership percentage includes all fully diluted shares, units
outstanding and options outstanding, as of 9/8/2014. Low
leverage
(3.7x)
(1)
(2)
,
$2.2
billion
stockholders’
equity
(2)
and
$3.1
billion
market
capitalization
(3)
34%
Insider
ownership
aligns
employees'
interests
with
other
shareholders
(4)
Over
5,880
associates
(2)
Balanced business mix (54% GWM / 46% IG) (1H 2014 net revenues)
Over
2,000
financial
advisors
(2)
with
$173
billion
in
combined
client
assets
(2)
–
national
presence
Largest
U.S.
equity
research
platforms
with
over
1,000
stocks
under
coverage
(2)
Broad
investment
banking
and
institutional
sales
and
trading
capabilities
–
domestic
and
international |
 5
2005
Legg Mason’s
Capital Markets
Division Acquired
2009
56 UBS Private Client
Branches Acquired
2010
Thomas Weisel
Partners Merger
2007
Ryan Beck
Acquisition
2011
Stone & Youngberg
Acquisition
2013
Keefe, Bruyette &
Woods
Acquisition
2012
#1 Ranked in
FT/StarMine
Award*
2008
#1 Ranked in FT/StarMine
Stock Picking
2010
#1 Ranked in both
FT/StarMine & WSJ
Best on the Street
Significant Growth, Unwavering Commitment
2013
Knight Capital
Group’s Fixed
Income Division
2013
#2 Ranked in
FT/StarMine
Award
2013
Acacia Bank &
Ziegler Lotsoff
2007
Acquired Stifel Bank
& Trust
2014
De La Rosa,
Oriel Securities
& LMIC
Stifel Overview
2012
Miller Buckfire
2008
Butler Wick |
 6
Building Scale
Growth Focused
Investment Banking
Research, Sales and Trading
Achieved cost efficiencies
July 2010
Private Client
Revenue production has exceeded
expectations
October 2009
Significant enhancement to our
Capital Markets business
Achieved cost savings objectives
December 2005
Bank holding company
Financial holding company
Grown assets from ~ $100M to $5.0B
April 2007
Private Client
Public Finance
Seamless & efficient integration
December 2008
Fixed Income IB
Fixed Income Sales and Trading
Private Client
Seamless & efficient integration
October 2011
FIG Investment Banking
FIG Sales and Trading / Research
Exceeded expectations
February 2013
56 UBS Branches
Private Client
Capital Markets
Achieved cost savings objectives
February 2007
Restructuring advisory
December 2012
Knight
Fixed Income
Fixed Income Sales and
Trading –
U.S. & Europe
Fixed Income Research
July 2013
Asset Management
Over $4 billion in assets
November 2013
Clean portfolio of 1-4 family
residential mortgages
October 2013
Each merger has been accretive to Stifel and retention remains high
California-based investment
bank and bond underwriter
April 2014
UK-based full service
investment bank
July 2014
LMIC -
Customized investment
advisory and trust services
Pending: June 2014 |
 7
Bulge Bracket
Boutique
LARGEST
provider of U.S. equity research
2 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
TOP TEN
retail platform
Leading broker-dealer providing wealth management and
institutional services to consumers and companies
Stifel’s Differentiated Value Proposition: Growth, Scale and
Stability Institutional
Wealth Management
Source: SIFMA and publicly available information for U.S. brokerage
networks. Note: Includes investment banks only. .
(1)
Based on 2013 U.S. trading volume per Bloomberg.
(2)
Represents Wealth Management Americas segment only.
(3)
Excludes 3,555 independent contractors and 334 independent advisor
representatives. Retail Brokerage by Number of Brokers
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
Rank
Firm
Brokers
1
Morgan Stanley Wealth Management
16,426
2
Bank of America Merrill Lynch
15,624
3
Wells Fargo Securities
15,146
4
UBS
(2)
7,000
5
Raymond James
(3)
6,202
6
Stifel
2,085
7
RBC Capital Markets
1,900
8
Oppenheimer & Co Inc
1,390
9
JPMorgan
800
10
Deutsche Bank
772
11
Janney Montgomery Scott
725
12
Robert W Baird & Co
709
13
Sterne Agee & Leach Inc
560
14
Stephens Inc.
526
15
Southwest Securities Inc
464
16
Canaccord Genuity Corp
425
17
Wedbush Securities Inc
400
18
DA Davidson & Co
320
19
Barclays Capital
250
20
Lazard Capital Markets
235
nd |
 8
Well-diversified, low risk business model with balanced retail
and institutional exposure
8
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 Note: Net revenues and operating contribution
percentages excludes the Other segment. Refer to slide 30 for additional segment information.
Net Revenues
6M 2013
6M 2014
Core Operating Contribution
6M 2013
6M 2014
Balanced business model facilitates growth in all market environments
|
 9
Demonstrated ability to grow through all market environments
while maintaining solid profitability
(1)
CAGR reflects years 2006 to 2013.
CAGR: 24%
Core
Net
Revenues
($MM)
(1)
Core
Net
Income
($MM)
(1)
Financial Crisis
Financial Crisis
CAGR: 24% |
 Segment Overview –
Global Wealth Management |
 11
(1)
Includes Independent Contractors.
(2)
CAGR reflects years 2006 to 2013.
Global Wealth Management
Provides Securities Brokerage Services and Stifel Bank Products
CAGR: 29%
CAGR: 25%
Grown from 600+ financial advisors in 2005 to over
2,000
(1)
financial advisors currently
Proven organic growth and acquirer of private client
business
Retail investors are generally mid-
to long-term buyers
Goal of providing price stability and support to the
institutional order book
Strategy of recruiting experienced advisors with
established client relationships
Expanding U.S. footprint
Net Revenues ($MM)
(2)
Core Operating Contribution ($MM)
(2)
Overview
National Presence |
 12
(1)
Includes Independent Contractors.
Global Wealth Management
Key Operating Metrics
Accounts
Brokers
(1)
Assets Under Management ($MM)
Branches |
 13
13
Note: Data as of 6/30/14
(1)
Average interest earning assets as of 6/30/14.
(2)
Non-agency MBS makes up less than 1% of Investment Portfolio.
(3)
Commercial Real Estate make up less than 1% of the loan portfolio.
Interest Earnings Assets
(1)
Investment Portfolio
Total: $5.1 Billion
Total: $2.9 Billion
(2)
Stifel Bank and Trust
Total: $1.9 Billion
(3)
Loan Portfolio (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
Balance sheet growth with low-risk assets
Funded by Stifel Nicolaus client deposits
Maintain high levels of liquidity
Overview
Strength of Brokerage Position
Offers banking products (securities based loans and
mortgage loans) within the GWM client base,
including establishing trust services
Built-in source of business
High net worth clients
Highly efficient due to lack of “brick and mortar”
deposit focused facilities |
 Growing Asset Management Capabilities
$9 Billion
$5 Billion
$1.5 Billion
$1 Billion
$1 Billion
$700 Million
Assets
Location
Baltimore, New York,
Cincinnati, Philadelphia
Chicago / Milwaukee
Baltimore, MD
St. Louis, MO
Portland, OR
Florham Park, NJ |
 Segment
Overview
–
Institutional
Group |
 16
(1)
Based
on
2013
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
2 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)
nd |
 17
U.S.
Equity
Research
Coverage
(1)
Coverage
Balanced
Across
All
Market
Caps
(3)
Institutional Group –
Research
Stifel Research Highlights
17
Largest U.S. Equity Research Platform
Largest provider of U.S. Equity Research
Largest provider of U.S. Small Cap Research
110 analyst across 12 sectors
Largest provider of Financial Services coverage
Ranked
#2
in
the
FT/Starmine
2013
Survey
(2)
Stifel analysts ranked #1 in Earnings Estimators
among 3,562 analysts
(1)
Source: StarMine rankings as of 9/10/14 for US Domiciled stocks with a
rating. Does not include Closed End Funds. (2)
Ranking includes both Stifel and KBW.
(3)
Small Cap includes market caps less than $1 billion; Mid Cap includes
market caps less than $5 billion. Research coverage distribution as
of 8/20/14. Rank
Firm
Overall
Mid Cap
Small Cap
1
Stifel / KBW
1,415
510
457
2
BofA Merrill Lynch
1,166
449
147
3
Goldman Sachs
1,082
375
87
4
JPMorgan
1,049
374
144
5
Wells Fargo Securities, Llc
1,022
386
155
6
Raymond James
1,002
373
277
7
Credit Suisse
935
288
151
8
Barclays
927
317
85
9
Morgan Stanley
919
285
85
10
Deutsche Bank Securities
890
264
121
11
Citi
884
285
107
12
RBC Capital Markets
884
300
129
13
Jefferies & Co.
851
278
182
14
UBS
755
220
62
15
Robert W. Baird & Co., Inc.
695
240
154
16
Morningstar, Inc.
641
127
17
17
William Blair & Company, L.L.C.
592
198
169
18
BMO Capital Markets
588
176
96
19
Cowen And Company
566
155
157
20
Keybanc Capital Markets
548
256
106 |
 18
Institutional Equity Sales
Equity Trading
Institutional Group –
Equity Sales and Trading
18
Extensive Distribution Network
Powerful Platform Spanning North America and Europe
100 person sales force, commission based
Experts in small and mid cap growth and value
Team based sales model with 2-4 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 780 non-deal roadshow days in 2013
Extensive experience with traditional and overnight
corporate finance transactions
53 sales traders located in
Baltimore, New York, Boston, Dallas, San
Francisco, and London
24 position traders covering each major industry
8 specialized traders focused on: Option Trading,
Convertible and ETF Trading
Profitable model with advantages of scale
Relationships with over 3,500 institutional accounts globally
Active daily market maker in over 3,700 stocks
Traded over 11.7 billion shares in 2013
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 |
 Overview
Strong Fixed Income Brokerage Capabilities
Institutional Group –
Fixed Income
Client Distribution
(1)(2)
Platform & Products
(1)
Client Distribution is as of 7/28/2014.
(2)
Other
category
includes:
Credit
Union,
Corporation,
Hedge
Fund,
Pension
Fund,
Trust
Company,
Foundation,
Endowment,
University
&
Non-Profit.
19
Comprehensive platform
85 traders with annual client trade volume
approaching $400 billion
27-person Fixed Income Research and Strategy
Group
7 person US Corporate Debt Capital Markets Group
Widespread distribution
Nearly 200 Institutional sales professionals covering
over 6,200 accounts
34 institutional fixed income offices nationwide
European offices in London and Zurich
Customer-driven
Focus on long-only money
managers and income funds
versus hedge funds
Consistency of execution
Identification of relative
value through asset
class/security selection
US Government and Agency
Securities
Investment Grade Credit
Mortgage-Backed Securities (MBS)
Whole Loans
Government-Guaranteed Loans
Asset-Backed Securities (ABS)
Commercial Mortgage-Backed
Securities
Certificates of Deposit
Municipal Sales and Trading and
Public Finance
UK Sales and Trading (former
Knight Capital team)
High Yield and Distressed Credit
Loan Trading Group
Aircraft Finance & Credit Solutions
Hybrid Securities
Emerging Markets
Structured Products |
 Overview
Institutional Group –
Public Finance
20
Stifel has ranked in the top ten nationally for senior
managed negotiated underwritings for the past
three years, and Stifel has ranked number one
nationally for senior managed K-12 negotiated
underwritings since 2011.
Total of 21 Public Finance offices
105 Public Finance professionals
Specialty sectors:
Education
Local Government/Municipal
Healthcare
Public-Private Partnerships/Development
Housing
National K-12 2014YTD Negotiated Deal Rankings
Source:
Thomson
Reuters:
SDC
(True
Economics
to
Book).
2014YTD
–
9/9/2014
Public Finance Underwritings
Negotiated
Number
Par Amount
Number
Par Amount
Number
Par Amount
Senior Manager/Private Placement
273
$4,962,768,479
598
$9,928,173,963
559
$9,989,033,787
Co-Manager
63
$14,300,337,051
151
$41,793,904,000
162
$53,169,398,000
Total
336
$19,263,105,530
749
$51,722,077,963
721
$63,158,431,787
Competitive
Number
Par Amount
Number
Par Amount
Number
Par Amount
Senior Manager
31
$231,074,999
73
$587,723,000
114
$803,240,000
Co-Manager
171
$4,122,235,860
268
$3,138,960,000
299
$4,586,264,000
Total
202
$4,353,310,859
341
$3,726,683,000
413
$5,389,504,000
June 30, 2014
2013
2012
June 30, 2014
2013
2012
Rank
Book Runner
Par Amount
(US$ mil)
Number of
Issues
1
Stifel Nicolaus & Co Inc
5,247.8
323
2
Piper Jaffray & Co
3,921.5
225
3
Bank of America Merrill Lynch
3,308.7
15
4
RBC Capital Markets
3,242.3
217
5
Raymond James
2,148.3
97
6
Robert W Baird & Co Inc
1,643.2
120
7
Citi
1,462.1
22
8
George K Baum & Company Inc
1,339.9
100
9
J P Morgan Securities LLC
1,293.4
11
10
Wells Fargo & Co
1,209.3
23
11
D A Davidson & Co
1,031.6
113
12
City Securities Corporation
966.4
44
13
BOSC Inc
912.7
55
14
Loop Capital Markets
744.5
7
15
Southwest Securities
679.9
28
16
FirstSouthwest
607.6
44
17
Fifth Third Securities Inc
593.9
55
18
Roosevelt & Cross Inc
592.4
78
19
PNC Financial Services Group Inc
409.4
31
20
Janney Montgomery Scott LLC
389.8
35 |
 Accomplished
U.S.
Equity
Underwriting
Franchise
–
All
Equity
Transactions
Investment Banking
Bookrun Equity Deals Since 2010
All Managed Equity Deals Since 2010
21
Source:
Dealogic.
Rank
eligible
SEC
registered
IPOs
and
Follow-On
offerings
since
2010.
Includes
demutualizations.
As
of
7/31/14.
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
1,034
$597.2
2
JPMorgan
1,012
$570.1
3
Citi
947
$567.6
4
Morgan Stanley
913
$546.1
5
Barclays
848
$488.4
6
Credit Suisse
823
$474.4
7
Wells Fargo Securities
821
$420.4
8
Deutsche Bank
814
$472.9
9
Stifel / Keefe, Bruyette & Woods
782
$272.5
10
Goldman Sachs
750
$486.9
11
RBC Capital Markets
743
$354.8
12
UBS
628
$349.7
13
Raymond James
537
$256.2
14
Robert W Baird & Co
403
$112.1
15
Piper Jaffray & Co
402
$179.6
16
Jefferies LLC
394
$91.1
17
JMP Securities LLC
358
$67.5
18
Oppenheimer & Co Inc
357
$87.9
19
William Blair & Co LLC
302
$82.1
20
Cowen & Co LLC
300
$63.4
21
BMO Capital Markets
268
$102.1
22
Canaccord Genuity Corp
263
$31.6
23
Janney Montgomery Scott
224
$38.7
24
KeyBanc Capital Markets
217
$83.9
25
Ladenburg Thalmann & Co Inc
216
$31.1
($ in billions)
# of
$
Rank
Firm
Deals
Volume
1
Bank of America Merrill Lynch
946
$111.4
2
JPMorgan
899
$112.5
3
Morgan Stanley
841
$121.7
4
Citi
832
$107.8
5
Barclays
709
$98.4
6
Goldman Sachs
679
$108.4
7
Credit Suisse
666
$80.8
8
Deutsche Bank
646
$69.2
9
Wells Fargo Securities
578
$44.6
10
UBS
439
$43.6
11
Jefferies LLC
317
$18.3
12
RBC Capital Markets
314
$23.5
13
Stifel / Keefe, Bruyette & Woods
257
$13.6
14
Raymond James
158
$8.1
15
Piper Jaffray & Co
140
$6.1
16
Cowen & Co LLC
119
$3.8
17
Roth Capital Partners
98
$1.9
18
Robert W Baird & Co
95
$4.1
19
Leerink Partners LLC
90
$3.5
20
BMO Capital Markets
75
$4.8
20
Aegis Capital Corp
75
$1.1
22
Lazard Capital Markets
64
$1.8
23
Sandler O'Neill & Partners
62
$4.9
24
KeyBanc Capital Markets
61
$3.6
25
Canaccord Genuity Corp
58
$2.6 |
 Financial Overview |
 23
(1)
CAGR reflects years 2006 to 2013.
(2)
Book Value Per Share adjusted for April 2011 three-for-two stock
split (2006-2010). Selected Financial Highlights
CAGR: 24%
CAGR: 24%
CAGR: 21%
CAGR: 24%
Core Net Revenues ($MM)
(1)
Core Net Income ($MM)
(1)
Total Equity ($MM)
Total Client Assets ($BN)
Book Value Per Share
(2)
CAGR: 37% |
 Stifel Financial Results
Three months ended June 30, 2014
(1)
(2)
(2)
24
(1)
Non-core adjustments consist of merger-related revenues and
expenses associated with our recent acquisitions and discontinued operations of SN Canada.
(2)
Results for the three months ended June 30, 2013 and March 31, 2014 are
Core (non-GAAP). ($ in thousands, except per share amounts)
Non-GAAP
Non-Core
GAAP
6/30/13
% Change
3/31/14
% Change
Total revenues
570,543
$
(1,554)
$
568,989
$
508,022
$
12.3%
557,288
$
2.4%
Interest expense
9,048
(206)
8,842
12,608
(28.2%)
8,853
2.2%
Net revenues
561,495
(1,348)
560,147
495,414
13.3%
548,435
2.4%
Compensation and benefits
353,754
1,513
355,267
311,228
13.7%
344,487
2.7%
Non-comp operating expenses
122,811
4,546
127,357
108,964
12.7%
119,376
2.9%
Total non-interest expenses
476,565
6,059
482,624
420,192
13.4%
463,863
2.7%
Income from continuing operations before income taxes
84,930
(7,407)
77,523
75,222
12.9%
84,572
0.4%
Provision for income taxes
33,664
(1,718)
31,946
30,089
11.9%
32,544
3.4%
Net income from continuing operations
51,266
$
(5,689)
$
45,577
$
45,133
$
13.6%
52,028
$
(1.5%)
Discontinued operations:
Loss from discontinued operations, net of tax
-
(1,976)
(1,976)
-
-
Net income
51,266
$
(7,665)
$
43,601
$
45,133
$
13.6%
52,028
$
(1.5%)
Earnings per diluted common share:
Income from continuing operations
0.68
$
(0.08)
$
0.60
$
0.69
$
(1.4%)
0.69
$
(1.4%)
Loss from discontinued operations
-
(0.02)
(0.02)
-
-
Earnings per diluted common share
0.68
$
(0.10)
$
0.58
$
0.69
$
(1.4%)
0.69
$
(1.4%)
Weighted average number of shares outstanding:
Diluted
75,641
74,090
2.1%
75,691
(0.1%)
Ratios to net revenues
:
Compensation and benefits
63.0%
63.4%
62.8%
62.8%
Non-comp operating expenses
21.9%
22.8%
22.0%
21.8%
Income from continuing operations before income taxes
15.1%
13.8%
15.2%
15.4%
Three Months Ended June 30, 2014
Three Months Ended |
 Stifel Financial Results
Six months ended June 30, 2014
(1)
(2)
25
(1)
Non-core adjustments consist of merger-related revenues and
expenses associated with our recent acquisitions and discontinued operations of SN Canada.
(2)
Results for the six months ended June 30, 2013 are Core
(non-GAAP). ($ in thousands, except per share amounts)
Non-GAAP
Non-Core
GAAP
6/30/13
% Change
Total revenues
1,127,831
$
(3,465)
$
1,124,366
$
957,202
$
17.8%
Interest expense
17,901
(428)
17,473
23,176
(22.8%)
Net revenues
1,109,930
(3,037)
1,106,893
934,026
18.8%
Compensation and benefits
698,241
3,797
702,038
592,355
17.9%
Non-comp operating expenses
242,187
7,017
249,204
202,458
19.6%
Total non-interest expenses
940,428
10,814
951,242
794,813
18.3%
Income from continuing operations before income taxes
169,502
(13,851)
155,651
139,213
21.8%
Provision for income taxes
66,208
(4,107)
62,101
54,022
22.6%
Net income from continuing operations
103,294
$
(9,744)
$
93,550
$
85,191
$
21.2%
Discontinued operations:
Loss from discontinued operations, net
-
(2,567)
(2,567)
Net income
103,294
$
(12,311)
$
90,983
$
85,191
$
21.2%
Earnings per diluted common share:
Income from continuing operations
1.37
$
(0.13)
$
1.24
$
1.19
$
15.1%
Loss from discontinued operations, net
-
(0.04)
(0.04)
Earnings per diluted common share
1.37
$
(0.17)
$
1.20
$
1.19
$
15.1%
Weighted average number of shares outstanding:
Diluted
75,665
71,627
5.6%
Ratios to net revenues:
Compensation and benefits
62.9%
63.4%
63.4%
Non-comp operating expenses
21.8%
22.5%
21.7%
Income from continuing operations before income taxes
15.3%
14.1%
14.9%
Six Months Ended June 30, 2014
Six Months Ended |
 26
Sources of Revenues
($ in thousands)
6/30/14
6/30/13
%
Change
3/31/14
%
Change
6/30/14
6/30/13
%
Change
Commissions
152,712
$
154,795
$
(1.3%)
159,416
$
(4.2%)
312,128
$
300,662
$
3.8%
Principal transactions
125,676
111,306
12.9%
126,461
(0.6%)
252,137
218,570
15.4%
Brokerage revenues
278,388
266,101
4.6%
285,877
(2.6%)
564,265
519,232
8.7%
Capital raising
81,159
71,303
13.8%
73,804
10.0%
154,690
121,152
27.7%
Advisory
60,356
48,140
25.4%
58,500
3.2%
119,129
75,196
58.4%
Investment banking
141,515
119,443
18.5%
132,304
7.0%
273,819
196,348
39.5%
Asset mgt and service fees
94,231
76,088
23.8%
89,170
5.7%
183,401
145,000
26.5%
Other
8,742
11,787
(25.8%)
5,200
68.1%
13,942
32,206
(56.7%)
Total operating revenues
522,876
473,419
10.4%
512,551
2.0%
1,035,427
892,786
16.0%
Interest revenue
46,113
32,893
40.2%
42,826
7.7%
88,939
62,699
41.9%
Total revenues
568,989
506,312
12.4%
555,377
2.5%
1,124,366
955,485
17.7%
Interest expense
8,842
12,634
(30.0%)
8,631
2.4%
17,473
23,203
(24.7%)
Net revenues
560,147
$
493,678
$
13.5%
546,746
$
2.5%
1,106,893
$
932,282
$
18.7%
Three Months Ended
Six Months Ended |
 27
Brokerage & Investment Banking Revenues
($ in thousands)
6/30/14
6/30/13
% Change
3/31/14
% Change
6/30/14
6/30/13
% Change
Global Wealth Management
161,780
$
160,889
$
0.6%
161,505
$
0.2%
323,285
$
319,262
$
1.3%
Institutional Group
Equity brokerage
62,087
64,273
(3.4%)
65,768
(5.6%)
127,855
113,511
12.6%
Fixed income brokerage
54,520
40,939
33.2%
58,604
(7.0%)
113,124
86,439
30.9%
Total Institutional Group
116,607
105,212
10.8%
124,372
(6.2%)
240,979
199,950
20.5%
Total brokerage revenues
278,387
266,101
4.6%
285,877
(2.6%)
564,264
519,212
8.7%
Investment Banking:
Capital raising
Equity
65,750
53,577
22.7%
60,696
8.3%
126,174
85,172
48.1%
Fixed income
15,409
17,726
(13.1%)
13,108
17.6%
28,516
35,980
(20.7%)
Total capital raising
81,159
71,303
13.8%
73,804
10.0%
154,690
121,152
27.7%
Advisory fees
60,356
48,140
25.4%
58,500
3.2%
119,129
75,196
58.4%
Total Investment banking
141,515
119,443
18.5%
132,304
7.0%
273,819
196,348
39.5%
Three Months Ended
Six Months Ended |
 Core Non-Interest Expenses
28
(1)
Excludes non-core adjustments consisting of merger-related revenues
and expenses associated with our recent acquisitions and discontinued operations of SN Canada.
(2)
Transition pay includes amortization of retention awards, signing bonuses,
and upfront notes. Three months ended June 30, 2014
($ in thousands)
6/30/14
6/30/13
% Change
3/31/14
% Change
6/30/14
6/30/13
3/31/14
Net revenues
561,495
$
495,414
$
13.3%
548,435
$
2.4%
100.0%
100.0%
100.0%
Compensation and benefits
328,380
290,511
13.0%
321,035
2.3%
58.5%
58.6%
58.5%
Transitional pay
25,374
20,717
22.5%
23,452
8.2%
4.5%
4.2%
4.3%
Total compensation and benefits
353,754
311,228
13.7%
344,487
2.7%
63.0%
62.8%
62.8%
Occupancy and equipment rental
40,493
37,768
7.2%
39,570
2.3%
7.2%
7.6%
7.2%
Communication and office supplies
25,691
24,124
6.5%
24,801
3.6%
4.6%
4.9%
4.5%
Commissions and floor brokerage
9,248
9,374
(1.3%)
9,028
2.4%
1.6%
1.9%
1.6%
Other operating expenses
47,379
37,698
25.7%
45,977
3.0%
8.4%
7.6%
8.5%
Total non-comp operating expenses
122,811
108,964
12.7%
119,376
2.9%
21.9%
22.0%
21.8%
Total non-interest expense
476,565
420,192
13.4%
463,863
2.7%
84.9%
84.8%
84.6%
Income from continuing operations before income taxes
84,930
75,222
12.9%
84,572
0.4%
15.1%
15.2%
15.4%
Provision for income taxes
33,664
30,089
11.9%
32,544
3.4%
6.0%
6.1%
5.9%
Non-GAAP net income from continuing operations
51,266
$
45,133
$
13.6%
52,028
$
(1.5%)
9.1%
9.1%
9.5%
Non-core expenses (after-tax)
(5,689)
(14,217)
(4,055)
GAAP net income from continuing operations
45,577
$
30,916
$
47,973
$
Three Months Ended
% of Net revenues
(1)
(1)
(2) |
 Core Non-Interest Expenses
29
(1)
Excludes non-core adjustments consisting of merger-related revenues
and expenses associated with our recent acquisitions and discontinued operations of SN Canada.
(2)
Transition pay includes amortization of retention awards, signing bonuses,
and upfront notes. Six months ended June 30, 2014
($ in thousands)
6/30/14
(1)
6/30/13
% Change
6/30/14
(1)
6/30/13
Net revenues
1,109,930
$
934,026
$
18.8%
100.0%
100.0%
Compensation and benefits
649,415
550,812
17.9%
58.5%
59.1%
Transitional pay
(2)
48,826
41,543
17.5%
4.4%
4.4%
Total compensation and benefits
698,241
592,355
17.9%
62.9%
63.4%
Occupancy and equipment rental
80,063
68,741
16.5%
7.2%
7.4%
Communication and office supplies
50,492
45,459
11.1%
4.5%
4.9%
Commissions and floor brokerage
18,276
17,823
2.5%
1.6%
1.9%
Other operating expenses
93,356
70,435
32.5%
8.4%
7.6%
Total non-comp operating expenses
242,187
202,458
19.6%
21.8%
21.7%
Total non-interest expense
940,428
794,813
18.3%
84.7%
85.1%
Income from continuing operations before income taxes
169,502
139,213
21.8%
15.3%
14.9%
Provision for income taxes
66,208
54,022
22.6%
6.0%
5.8%
Non-GAAP net income from continuing operations
103,294
$
85,191
$
21.2%
9.3%
9.1%
Non-core expenses (after-tax)
(9,744)
(39,339)
GAAP net income from continuing operations
93,550
$
45,852
$
Six Months Ended
% of Net revenues |
 Segment Comparison -
Core
30
Three and six months ended June 30, 2014
($ in thousands)
6/30/14
6/30/13
%
Change
3/31/14
%
Change
6/30/14
6/30/13
%
Change
Net revenues:
Global Wealth Management
307,247
$
282,717
$
8.7%
297,183
$
3.4%
604,430
$
549,674
$
10.0%
Institutional Group
255,712
215,444
18.7%
249,977
2.3%
505,689
388,744
30.1%
Other
(1,464)
(2,747)
46.7%
1,275
(214.8%)
(189)
(4,392)
95.7%
561,495
$
495,414
$
13.3%
548,435
$
2.4%
1,109,930
$
934,026
$
18.8%
Operating contribution:
Global Wealth Management
89,098
$
78,924
$
12.9%
79,676
$
11.8%
168,774
$
148,423
$
13.7%
Institutional Group
42,690
31,083
37.3%
45,622
(6.4%)
88,312
59,313
48.9%
Other
(46,858)
(34,785)
(34.7%)
(40,726)
(15.1%)
(87,584)
(68,523)
(27.8%)
84,930
$
75,222
$
12.9%
84,572
$
0.4%
169,502
$
139,213
$
21.8%
Operating contribution
Global Wealth Management
29.0
27.9
26.8
27.9
27.0
Institutional Group
16.7
14.4
18.3
17.5
15.3
15.1
15.2
15.4
15.3
14.9
As a percentage of net revenues:
Three Months Ended
Six Months Ended
(1)
Excludes the other segment.
(1) |