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8-K - FORM 8-K - STIFEL FINANCIAL CORP | d823848d8k.htm |
Stifel Financial Corp.
November 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
Companys
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
from
continuing
operations
before
income
taxes,
provision
for
income
taxes,
net
income
from
continuing
operations,
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
Companys
financial
results
for
the
three
and
nine
months
ended
September
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
Companys
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
Companys
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
Companys
financial
performance. |
Stifel Overview |
4
Stifel
Premier Investment Bank and Full-Service Investment Firm
Stifel
at a Glance
Core Net Revenue -
$2,199 million (TR12)
Global Wealth Management (GWM)
Net Revenue -
$1,215million (TR12)
Private Client
Stifel Bank & Trust
Margin and Securities-based Lending
Asset Management
Institutional Group (IG)
Net Revenue -
$988 million (TR12)
Equity & Fixed Income Capital Raising
M&A Advisory / Restructuring
Institutional Equity and Fixed Income Brokerage
Independent Research
Low leverage (3.2x)
(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 6,000 associates
(2)
Balanced business mix (56% GWM / 44% IG) (9M 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 1,400 stocks under
coverage (2)
Broad
investment
banking
and
institutional
sales
and
trading
capabilities
domestic
and
international
(1)
Assets / equity (as adjusted).
(2)
As of 9/30/2014.
(3)
As of 11/10/2014.
(4)
Insider ownership percentage includes all fully diluted shares, units
outstanding and options outstanding, as of 9/8/2014. |
5
Bulge Bracket
Boutique
Leading broker-dealer providing wealth management and
institutional services to consumers and companies
Stifels Differentiated Value Proposition: Growth, Scale and
Stability Institutional
Wealth Management
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
LARGEST
provider of U.S. equity research
2
nd
LARGEST
Equity trading platform in the U.S.
outside of the Bulge Bracket firms
(3)
FULL SERVICE
investment banking with
expertise across products and industry sectors
ACCESS
TO
top
ten
private
client
platform
Source: SIFMA and publicly available information for U.S. brokerage
networks. Note: Includes investment banks only. .
(1)
Represents Wealth Management Americas segment only.
(2)
Excludes 3,685 independent contractors.
(3)
Based on 2013 U.S. trading volume per Bloomberg.
|
6
2005
Legg Masons
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
Unwavering Commitment
2013
Knight Capital
Groups 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
& 1919 IC
Significant Growth
2012
Miller Buckfire
2008
Butler Wick |
7
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
Customized investment
advisory and trust services
November 2014 |
8
Closed July 31, 2014
Full-service broker-dealer based in London
Research, sales, trading and investment banking
23 analysts covering more than 260 UK companies in 9 industries
Integration and conversion efforts scheduled for Q1 2015
Added approximately $3.5 million in incremental non-compensation
expenses in the third quarter
Acquisition Updates
Closed November 7, 2014
$9.4 billion in AUM as of September 30, 2014
Provides customized investment advisory, trust and family offices
services
Clients include individuals, families, and institutions
1919 is the year their legacy firm was founded
Offices
are
located
in
Baltimore,
Cincinnati,
New
York
and
Philadelphia
Closed February 15, 2013
Consolidation is complete
2014 #1 Bank M&A Advisor based on deal value¹
Advised on 11 of Top 20 bank mergers YTD¹
FIG
ECM
market
share
up
60+%
from
FY2012
through
1
st
9M
2014
Outperforming equity brokerage desk
¹As of 11/12/14. |
9
Well-diversified, low risk business model with balanced retail
and institutional exposure
9
Unburdened by capital constraints
Low leverage business model and conservative risk management
Limited balance sheet risk
Stable
wealth
management
business
is
augmented
by
profitable
and
growing
institutional
business
Drive revenue synergies by leveraging the wealth management and
institutional business Net Revenues
9M 2013
9M 2014
Core Operating Contribution
9M 2013
9M 2014
Balanced business model facilitates growth in all market environments
Note: Net revenues and operating contribution percentages excludes the
Other segment. Refer to slide 30 for additional segment information. |
10
Demonstrated ability to grow through all market environments
while maintaining solid profitability
(1)
CAGR reflects years 2006 to 2013.
CAGR: 24%
Core Net Revenues ($MM)
(1)
Core Net Income ($MM)
(1)
Financial Crisis
Financial Crisis
CAGR: 24% |
11
PROJECTED INCREASE IN PRE-TAX EARNINGS FROM A 200 BPS RISE IN RATES
($ millions; as of September 30, 2014)
Key Assumptions:
Based on static balances on
September 30, 2014 and an
instantaneous change in
rates
Ultimately, the amount
earned by clients and kept
by the firm will be influenced
by market/competitive
pricing, rates available on
substitute products, the
firms philosophy/ strategy,
etc.
The firm is expected to keep
40 bps of the every 100 bps
increase and pass the
remaining 60 bps to clients
$15 - 20
$60 - 70 (19 - 22%)*
$45 - 50
*: % based upon 3Q'14 annualized non-GAAP results
Account and Service Fees in
PCG
Projected Incremental Pre-Tax
Earnings
Net Interest Income
Interest Rate Risk Profile |
Segment Overview
Global Wealth Management |
13
(1)
Includes Independent Contractors.
(2)
CAGR reflects years 2006 to 2013.
Global Wealth Management
Provides Securities Brokerage Services and Stifel Bank Products
CAGR: 29%
CAGR: 25%
Net Revenues ($MM)
(2)
Core Operating Contribution ($MM)
(2)
Overview
National Presence
Grown from 600+ financial advisors in 2005 to over
2,000
(1)
financial advisors currently
Proven organic growth and acquirer of private client
business
Individual investors are generally mid-
to long-term
buyers
Goal of providing price stability and support to the
institutional order book
Strategy of recruiting experienced advisors with
established client relationships
Expanding U.S. footprint |
14
(1)
Includes Independent Contractors.
Global Wealth Management
Key Operating Metrics
Accounts
Financial Advisors
(1)
Assets Under Management ($MM)
Branches |
15
15
Note: Data as of 9/30/14
(1)
Average interest earning assets as of 9/30/14.
(2)
Non-agency MBS makes up less than 1% of Investment Portfolio.
(3)
Construction and Land and Commercial Real Estate make up less than 1% of
the loan portfolio. Interest Earnings Assets
(1)
Investment Portfolio
Total: $5.0 Billion
Total: $2.7 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 |
$9.4 Billion
$5.9 Billion
$2.4 Billion
$880 Million
$700 Million
$300 Million
Assets¹
Location
Growing Asset Management Capabilities
16
¹Asset
as
of
September
30,
2014.
Includes
assets
under
advisement
and
assets
under
management
Missouri
Valley
Partners
merged
with
Ziegler
Capital
Management,
LLC
on
10/31/2014
Total Assets: $19.6 Billion¹
Baltimore, New York,
Cincinnati, Philadelphia
Chicago, Milwaukee,
St. Louis
Baltimore, MD
Portland, OR
Florham Park, NJ
San Francisco, CA |
Segment Overview
Institutional Group |
18
(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
Companys
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
nd
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) |
19
U.S. Equity Research Coverage
(1)
Coverage Balanced Across All Market Caps
(3)
Institutional Group
Research
Stifel Research Highlights
19
Largest U.S. Equity Research Platform
Largest provider of U.S. Equity Research
Largest provider of U.S. Small Cap Research
111 analyst across 12 sectors
Largest provider of Financial Services coverage
Ranked #2 in the FT/Starmine 2014 Survey
(2)
(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
1,412
515
454
2
BofA Merrill Lynch
1,173
459
142
3
Goldman Sachs
1,102
398
94
4
Wells Fargo Securities, Llc
1,075
415
165
5
JPMorgan
1,053
386
139
6
Raymond James
1,008
393
271
7
Credit Suisse
946
296
155
8
Morgan Stanley
943
305
86
9
Barclays
925
314
94
10
RBC Capital Markets
918
324
126
11
Deutsche Bank Securities
894
283
124
12
Jefferies & Co.
871
296
183
13
Citi
866
290
103
14
UBS
750
216
70
15
Robert W. Baird & Co., Inc.
672
244
150
16
Morningstar, Inc.
648
131
16
17
William Blair & Company
593
208
165
18
BMO Capital Markets
592
180
103
19
Cowen And Company
586
167
168
20
Keybanc Capital Markets
552
267
112
21
Piper Jaffray
533
185
175
22
Oppenheimer & Co.
516
165
108 |
20
Institutional Equity Sales
Equity Trading
Institutional Group
Equity Sales and Trading
20
Extensive Distribution Network
Powerful Platform Spanning North America and Europe
103 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
92 sales traders located in
Baltimore, New York, Boston, Dallas, San
Francisco, and London
28 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.
21
Comprehensive platform
85 traders with annual client trade volume
approaching $400 billion
27-person Fixed Income Research and Strategy
Group
7 person US Corporate Debt Capital Markets Group
Widespread distribution
Nearly 200 Institutional sales professionals covering
over 6,200 accounts
34 institutional fixed income offices nationwide
European offices in London and Zurich
Customer-driven
Focus on long-only money
managers and income funds
versus hedge funds
Consistency of execution
Identification of relative
value through asset
class/security selection
US Government and Agency
Securities
Investment Grade Credit
Mortgage-Backed Securities (MBS)
Reverse MBS
Whole Loans
Government-Guaranteed Loans
Asset-Backed Securities (ABS)
Commercial Mortgage-Backed
Securities (CMBS)
Certificates of Deposit
Municipal Sales and Trading and
Public Finance
UK Sales and Trading (former
Knight Capital team)
High Yield and Distressed Credit
Loan Trading Group
Aircraft Finance & Credit Solutions
Hybrid Securities
Emerging Markets
Structured Products |
Overview
Institutional Group
Public Finance
22
Stifel has ranked in the top ten nationally for senior
managed negotiated underwritings for the past
three years, and Stifel has ranked number one
nationally for senior managed K-12 negotiated
underwritings since 2011.
Total of 21 Public Finance offices
105 Public Finance professionals
Specialty sectors:
Education
Local Government/Municipal
Healthcare
Public-Private Partnerships/Development
Housing
National K-12 2014YTD Negotiated Deal Rankings
Source: Thomson Reuters: SDC (True Economics to Book) Ranked by number of
transactions.. 2014YTD as of 11/7/2014 Public Finance
Underwritings Rank
Book Runner
Par Amount
(US$ mil)
Number of
Issues
1
Stifel Nicolaus & Co Inc
4,042.7
246
2
RBC Capital Markets
3,119.2
196
3
Piper Jaffray & Co
2,677.0
129
4
Robert W Baird & Co Inc
1,507.5
121
5
D A Davidson & Co
1,162.8
113
6
Raymond James
2,229.7
102
7
George K Baum & Company Inc
1,092.5
90
8
LJ Hart & Company
254.7
77
9
Roosevelt & Cross Inc
444.7
61
10
BOSC Inc
1,204.2
57
11
Fifth Third Securities Inc
851.0
54
12
Ross Sinclaire & Associates LLC
163.3
43
13
First Midstate Inc
70.3
42
14*
Janney Montgomery Scott LLC
230.4
34
14*
Ameritas Investment Corp
199.6
34
16*
PNC Financial Services Group Inc
572.3
31
16*
FirstSouthwest
543.1
31
18
City Securities Corporation
353.3
27
19
Oppenheimer & Co
236.2
26
20
Citi
1,337.9
24
Negotiated
Number
Par Amount
Number
Par Amount
Number
Par Amount
Senior Manager/Private Placement
447
$8,629,489,674
598
$9,928,173,963
559
$9,989,033,787
Co-Manager
110
$22,972,262,051
151
$41,793,904,000
162
$53,169,398,000
Total
557
$31,601,751,725
749
$51,722,077,963
721
$63,158,431,787
Competitive
Number
Par Amount
Number
Par Amount
Number
Par Amount
Senior Manager
46
$3,210,384,999
73
$587,723,000
114
$803,240,000
Co-Manager
248
$5,603,053,734
268
$3,138,960,000
299
$4,586,264,000
Total
294
$8,813,438,733
341
$3,726,683,000
413
$5,389,504,000
September 30, 2014
2013
2012
September 30, 2014
2013
2012 |
Accomplished
U.S.
Equity
Underwriting
Franchise
All
Equity
Transactions
Investment Banking
Bookrun Equity Deals Since 2010
All Managed Equity Deals Since 2010
23
Source:
Dealogic.
Rank
eligible
SEC
registered
IPOs
and
Follow-On
offerings
since
2010.
Includes
demutualizations.
As
of
9/30/14.
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. |
Financial Overview |
25
(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 September 30, 2014
(1)
(2)
(2)
26
(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 September 30, 2013 and June 30, 2014 are
Core (non-GAAP). ($ in thousands, except per share amounts)
Non-GAAP
Non-Core
GAAP
9/30/13
% Change
6/30/14
% Change
Total revenues
536,241
$
(1,559)
$
534,682
$
491,101
$
9.2%
570,543
$
(6.0%)
Interest expense
11,516
(289)
11,227
11,467
0.4%
9,048
27.3%
Net revenues
524,725
(1,270)
523,455
479,634
9.4%
561,495
(6.5%)
Compensation and benefits
324,193
7,247
331,440
297,374
9.0%
353,754
(8.4%)
Non-comp operating expenses
122,501
3,748
126,249
116,817
4.9%
122,811
(0.3%)
Total non-interest expenses
446,694
10,995
457,689
414,191
7.8%
476,565
(6.3%)
Income from continuing operations before income taxes
78,031
(12,265)
65,766
65,443
19.2%
84,930
(8.1%)
Provision for income taxes
29,333
(3,660)
25,673
25,794
13.7%
33,664
(12.9%)
Net income from continuing operations
48,698
$
(8,605)
$
40,093
$
39,649
$
22.8%
51,266
$
(5.0%)
Discontinued operations:
Loss from discontinued operations, net of tax
-
(190)
(190)
-
-
Net income
48,698
$
(8,795)
$
39,903
$
39,649
$
22.8%
51,266
$
(5.0%)
Earnings per diluted common share:
Income from continuing operations
0.64
$
(0.12)
$
0.52
$
0.53
$
20.8%
0.68
$
(5.9%)
Loss from discontinued operations
-
-
-
-
-
Earnings per diluted common share
0.64
$
(0.12)
$
0.52
$
0.53
$
20.8%
0.68
$
(5.9%)
Weighted average number of shares outstanding:
Diluted
76,681
75,191
2.0%
75,641
1.4%
Ratios to net revenues:
Compensation and benefits
61.8%
63.3%
62.0%
63.0%
Non-comp operating expenses
23.3%
24.2%
24.4%
21.9%
Income from continuing operations before income taxes
14.9%
12.6%
13.6%
15.1%
Three Months Ended September 30, 2014
Three Months Ended |
($ in
thousands, except per share amounts) Non-GAAP
Non-Core
GAAP
9/30/13
% Change
Total revenues
1,664,072
$
(5,023)
$
1,659,049
$
1,448,302
$
14.9%
Interest expense
29,417
(716)
28,701
34,642
(15.1%)
Net revenues
1,634,655
(4,307)
1,630,348
1,413,660
15.6%
Compensation and benefits
1,022,434
11,044
1,033,478
889,728
14.9%
Non-comp operating expenses
364,688
10,765
375,453
319,275
14.2%
Total non-interest expenses
1,387,122
21,809
1,408,931
1,209,003
14.7%
Income from continuing operations before income taxes
247,533
(26,116)
221,417
204,657
21.0%
Provision for income taxes
95,541
(7,767)
87,774
79,817
19.7%
Net income from continuing operations
151,992
$
(18,349)
$
133,643
$
124,840
$
21.7%
Discontinued operations:
Loss from discontinued operations, net
-
(2,757)
(2,757)
Net income
151,992
$
(21,106)
$
130,886
$
124,840
$
21.7%
Earnings per diluted common share:
Income from continuing operations
2.00
$
(0.24)
$
1.76
$
1.71
$
17.0%
Loss from discontinued operations, net
-
(0.04)
(0.04)
-
Earnings per diluted common share
2.00
$
(0.28)
$
1.72
$
1.71
$
17.0%
Weighted average number of shares outstanding:
Diluted
76,011
72,851
4.3%
Ratios to net revenues:
Compensation and benefits
62.5%
63.4%
62.9%
Non-comp operating expenses
22.4%
23.0%
22.6%
Income from continuing operations before income taxes
15.1%
13.6%
14.5%
Nine Months Ended September 30, 2014
Nine Months Ended
Stifel Financial Results
(1)
(2)
27
(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
nine
months
ended
September
30,
are
Core
(non-GAAP).
Nine months ended September 30, 2014 |
Three Months
Ended Estimate
($ in thousands)
3/31/14
6/30/14
9/30/14
12/31/14
Acquisitions
Acacia Federal Savings Bank
1,132
$
2,259
$
1,227
$
-
$
De La Rosa & Co., Inc.
130
765
164
-
Keefe, Bruyette & Woods, Inc.
709
480
23
-
Knight Fixed Income
1,477
94
9
-
Miller Buckfire & Co., LLC
1,172
1,233
1,182
1,200
Oriel Securities Holding Limited
-
557
7,415
5,000
Ziegler Capital Management
4
11
229
-
Intangible amortization
1,820
1,680
1,643
1,800
6,444
7,079
11,892
8,000
Legg Mason Invesment Counsel
-
328
373
TBD
Total Deal Costs (Pre-tax)
6,444
$
7,407
$
12,265
$
8,000
$
Discontinued Operations, net
(591)
$
(1,976)
$
(190)
$
(200)
$
Actual
Non-Core Deal Costs
28 |
29
Sources of Revenues
($ in thousands)
9/30/14
9/30/13
%
Change
6/30/14
%
Change
9/30/14
9/30/13
%
Change
Commissions
151,621
$
145,837
$
4.0%
152,712
$
(0.7%)
463,749
$
446,498
$
3.9%
Principal transactions
109,378
122,583
(10.8%)
125,676
(13.0%)
361,515
341,153
6.0%
Brokerage revenues
260,999
268,420
(2.8%)
278,388
(6.2%)
825,264
787,651
4.8%
Capital raising
69,208
53,665
29.0%
81,159
(14.7%)
223,898
175,252
27.8%
Advisory
50,939
39,186
30.0%
60,356
(15.6%)
170,068
113,947
49.3%
Investment banking
120,147
92,851
29.4%
141,515
(15.1%)
393,966
289,199
36.2%
Asset mgt and service fees
96,638
76,710
26.0%
94,231
2.6%
280,039
221,711
26.3%
Other
4,803
13,063
(63.2%)
8,742
(45.1%)
18,745
45,269
(58.6%)
Total operating revenues
482,587
451,044
7.0%
522,876
(7.7%)
1,518,014
1,343,830
13.0%
Interest revenue
52,096
39,130
33.1%
46,113
13.0%
141,035
101,829
38.5%
Total revenues
534,683
490,174
9.1%
568,989
(6.0%)
1,659,049
1,445,659
14.8%
Interest expense
11,228
11,535
(2.7%)
8,842
27.0%
28,701
34,738
(17.4%)
Net revenues
523,455
$
478,639
$
9.4%
560,147
$
(6.6%)
1,630,348
$
1,410,921
$
15.6%
Three Months Ended
Nine Months Ended |
30
Brokerage & Investment Banking Revenues
($ in thousands)
9/30/14
9/30/13
% Change
6/30/14
% Change
9/30/14
9/30/13
% Change
Global Wealth Management
159,372
$
158,085
$
0.8%
161,780
$
(1.5%)
482,657
$
477,367
$
1.1%
Institutional Group
Equity brokerage
58,198
58,677
(0.8%)
62,087
(6.3%)
186,053
172,187
8.1%
Fixed income brokerage
43,429
51,658
(15.9%)
54,520
(20.3%)
156,553
138,097
13.4%
Total Institutional Group
101,627
110,335
(7.9%)
116,607
(12.8%)
342,606
310,284
10.4%
Total brokerage revenues
260,999
268,420
(2.8%)
278,387
(6.2%)
825,263
787,651
4.8%
Investment Banking:
Capital raising
Equity
44,068
38,653
14.0%
60,901
(27.6%)
158,037
126,198
25.2%
Fixed income
25,141
15,231
65.1%
20,258
24.1%
65,862
48,838
34.9%
Total capital raising
69,209
53,884
28.4%
81,159
(14.7%)
223,899
175,036
27.9%
Advisory fees
50,938
38,967
30.7%
60,356
(15.6%)
170,067
114,163
49.0%
Total Investment banking
120,147
92,851
29.4%
141,515
(15.1%)
393,966
289,199
36.2%
Three Months Ended
Nine Months Ended |
Core Non-Interest Expenses
31
(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 September 30, 2014
($ in thousands)
9/30/14
(1)
9/30/13
% Change
6/30/14
% Change
9/30/14
(1)
9/30/13
6/30/14
Net revenues
524,725
$
479,634
$
9.4%
561,495
$
(6.5%)
100.0%
100.0%
100.0%
Compensation and benefits
297,340
275,503
7.9%
328,380
(9.5%)
56.7%
57.4%
58.5%
Transitional pay
26,853
21,871
22.8%
25,374
5.8%
5.1%
4.6%
4.5%
Total compensation and benefits
324,193
297,374
9.0%
353,754
(8.4%)
61.8%
62.0%
63.0%
Occupancy and equipment rental
40,421
39,856
1.4%
40,493
(0.2%)
7.7%
8.3%
7.2%
Communication and office supplies
27,448
25,105
9.3%
25,691
6.8%
5.2%
5.2%
4.6%
Commissions and floor brokerage
9,971
9,775
2.0%
9,248
7.8%
1.9%
2.0%
1.6%
Other operating expenses
44,661
42,081
6.1%
47,379
(5.7%)
8.5%
8.8%
8.5%
Total non-comp operating expenses
122,501
116,817
4.9%
122,811
(0.3%)
23.3%
24.4%
21.9%
Total non-interest expense
446,694
414,191
7.8%
476,565
(6.3%)
85.1%
86.4%
84.9%
Income from continuing operations before income taxes
78,031
65,443
19.2%
84,930
(8.1%)
14.9%
13.6%
15.1%
Provision for income taxes
29,333
25,794
13.7%
33,664
(12.9%)
5.6%
5.4%
6.0%
Non-GAAP net income from continuing operations
48,698
$
39,649
$
22.8%
51,266
$
(5.0%)
9.3%
8.3%
9.1%
Non-core expenses (after-tax)
(8,605)
35,280
(5,689)
GAAP net income from continuing operations
40,093
$
74,929
$
45,577
$
Three Months Ended
% of Net revenues
(2) |
Core Non-Interest Expenses
32
(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. Nine months ended September 30, 2014
($ in thousands)
9/30/14
(1)
9/30/13
% Change
9/30/14
(1)
9/30/13
Net revenues
1,634,655
$
1,413,660
$
15.6%
100.0%
100.0%
Compensation and benefits
946,755
826,314
14.6%
57.9%
58.6%
Transitional pay
(2)
75,679
63,414
19.3%
4.6%
4.5%
Total compensation and benefits
1,022,434
889,728
14.9%
62.5%
62.9%
Occupancy and equipment rental
120,484
108,596
10.9%
7.4%
7.7%
Communication and office supplies
77,940
70,565
10.5%
4.8%
5.0%
Commissions and floor brokerage
28,247
27,599
2.3%
1.7%
2.0%
Other operating expenses
138,017
112,515
22.7%
8.4%
8.1%
Total non-comp operating expenses
364,688
319,275
14.2%
22.3%
22.6%
Total non-interest expense
1,387,122
1,209,003
14.7%
84.9%
85.5%
Income from continuing operations before income taxes
247,533
204,657
21.0%
15.1%
14.5%
Provision for income taxes
95,541
79,817
19.7%
5.8%
5.6%
Non-GAAP net income from continuing operations
151,992
$
124,840
$
21.7%
9.3%
8.8%
Non-core expenses (after-tax)
(18,349)
(4,058)
GAAP net income from continuing operations
133,643
$
120,782
$
Nine Months Ended
% of Net revenues |
Segment Comparison -
Core
33
Three and nine months ended September 30, 2014
(1)
Excludes the other segment.
($ in thousands)
9/30/14
9/30/13
% Change
6/30/14
%
Change
9/30/14
9/30/13
%
Change
Net revenues:
Global Wealth Management
317,241
$
274,669
$
15.5%
307,247
$
3.3%
921,671
$
824,344
$
11.8%
Institutional Group
215,160
205,132
4.9%
255,712
(15.9%)
720,849
593,875
21.4%
Other
(7,676)
(167)
(4496.4%)
(1,464)
424.3%
(7,865)
(4,559)
(72.5%)
524,725
$
479,634
$
9.4%
561,495
$
(6.5%)
1,634,655
$
1,413,660
$
15.6%
Operating contribution:
Global Wealth Management
94,026
$
72,128
$
30.4%
89,098
$
5.5%
262,800
$
220,551
$
19.2%
Institutional Group
29,500
34,986
(15.7%)
42,690
(30.9%)
117,812
94,298
24.9%
Other
(45,495)
(41,671)
(9.2%)
(46,858)
2.9%
(133,079)
(110,192)
(20.8%)
78,031
$
65,443
$
19.2%
84,930
$
(8.1%)
247,533
$
204,657
$
21.0%
Operating contribution
Global Wealth Management
29.6
26.3
29.0
28.5
26.8
Institutional Group
13.7
17.1
16.7
16.3
15.9
14.9
13.6
15.1
15.1
14.5
As a percentage of net revenues:
Three Months Ended
Nine Months Ended
(1) |
Actual
($) Yield (%)
Actual ($)
Yield (%)
Actual ($)
Yield (%)
Q314 v Q313
Q314 v Q214
Assets
Cash
142,444
0.39
350,255
0.24
132,152
0.37
(59.3)
7.8
Investment securities
2,720,860
2.39
2,949,080
2.33
2,915,235
2.47
(7.7)
(6.7)
Bank loans
1,988,076
4.82
1,136,590
2.95
1,893,330
3.38
74.9
5.0
Total interest earning assets
4,851,380
3.24
4,435,925
2.41
4,940,717
2.73
9.4
(1.8)
Other assets (non-interest earning)
109,192
111,146
109,319
(1.8)
(0.1)
Total assets
4,960,572
4,547,071
5,050,036
9.1
(1.8)
Liabilities
Deposits
4,552,522
0.15
4,228,405
0.25
4,653,656
0.14
7.7
(2.2)
Other liabilities (non-interest bearing)
18,728
25,335
26,182
(26.1)
(28.5)
Total liabilites
4,571,250
4,253,740
4,679,838
7.5
(2.3)
Net interest margin
3.10
2.17
2.59
Allowance for loan losses
18,996
$
13,233
$
17,104
$
43.6
11.1
Allowance as a percentage of loans
1.18
%
1.23
%
0.97
%
Non-performing assets as a percentage of total assets
0.07
%
0.32
%
0.10
%
% Change
As of 9/30/14
As of 9/30/13
As of 6/30/14
Note: Actual amounts presented above are as of period-end and yields are based off of
quarter-to-date averages. (1)
Investment securities includes available-for-sale and held-to-maturity
securities. (2)
Includes loans held for sale.
Stifel Bank & Trust
An Operating Unit of GWM
34
(1)
(2) |
($ in
thousands) Total Assets
9,326,117
$
Stockholders' Equity
2,238,549
$
6.70% senior notes, due 2022
175,000
$
5.375% senior notes, due 2022
150,000
4.250% senior notes, due 2024
300,000
Debentures to Stifel Financial Capital Trusts II, III, & IV
82,500
Total Capitalization
2,946,049
$
Ratios:
Debt to Equity
18.2%
Tier 1 Leverage Ratio
16.0%
Tier 1 Risk Based Capital Ratio
27.9%
(1)
Debt to equity ratio includes the debentures to Stifel Financial
Capital Trusts ($82.5m) and Senior Notes ($625.0m) divided by stockholders
equity.
As of September 30, 2014
Capital Structure
35
(1) |