Investor Presentation KBW Winter Financial Services Symposium February 14-15, 2019
Disclaimer Forward rd-Loo Looking State temen ments ts 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 of Non-GAAP AP Financi cial Measur ures The Company utilized certain non-GAAP calculations as additional measures to aid in understanding and analyzing the Company’s financial results for the twelve months ended December 31, 2018. 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 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 current financial performance. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, operating income, cash flows, or other measures of financial performance 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. Management has not included costs which they believe are duplicative in the analysis below, which is a change from prior periods. 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 the Company’s business and these effects should not be ignored in evaluating and analyzing its financial results. Therefore, the Company believes that GAAP measures and the same respective non-GAAP measures of the Company’s financial performance should be considered together. 2
Our Strategy 3
Strategic Vision To build a premier wealth management and investment banking firm Global Wealth Management Institutional Private Asset Bank Equities Fixed Investment Research Client Management Sales + Income Banking Trading Sales + Trading 2,301 financial $30B in total $17.8B in assets Experienced sales Comprehensive Over 400 Largest research advisors in 369 assets managed funded by client force with platform including professionals platform with branches with through various deposits extensive research, strategy with extensive more than 1,300 than $239B in strategies distribution and DCM teams experience across stocks covered in client assets capabilities all products and the U.S. and more industry verticals than 300 stocks covered in Europe 4
A History of Growth 2018 2018 2017 2017 Ziegler Wealth th 2016 2016 City y Management nt, Eaton n Partner ners 2015 2015 Securiti ties Business ness ISM M Capita tal Barclays ys Wealth th & Bancshares s Inc. 2014 2014 Investm stment nt Management nt, First t Empire Sterne ne Agee, De La Rosa, Oriel Securiti ties, s, 1919 Invest stment nt Counse sel, 2013 2013 Merchant nt Capita tal Acacia Bank & Ziegler Lotso soff 2013 2013 Knight Capital Group’s Fixed Income Divisi sion 2013 2013 Keefe, Bruyett tte & Woods 2012 2012 Miller Buckfire 2011 2011 $3,025 $2,926 Stone ne & Youngber gberg 2010 2010 Thomas s Weisel $2,575 Partne ners 2009 2009 $2,332 GAAP Net Revenues ($MM) 56 UBS Private te Client nt $2,208 Branches s 2008 2008 Butler Wick $1,973 2007 2007 Ryan Beck Acquisiti tion Stifel Bank & Trust st $1,594 $1,393 2005 2005 $1,382 Legg Mason’s Capital Markets s Division $1,091 $870 $763 $452 $264 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 5
Substantial Performance Improvement in 2018 2018 2018 2017 2017 Change 2018 2018 2017 2017 Change millions millions Income Statement Balance Sheet Total net revenue $3,025 $2,928 3% Total assets $24,520 $21,384 15% Pre-tax income $592 $501 18% Bank assets $17,819 $14,996 19% Net income available to common share holders $429 $323 33% Bank NIM* 2.89% 2.85% 4 bps Non-GAAP EPS $5.28 $3.99 32% ROCE - Non-GAAP 14.9% 12.2% 270 bps GAAP EPS $4.73 $2.14 121% ROCTE - Non-GAAP 24.4% 20.6% 380 bps Ratios Valuation** Total comp. ratio 58.0% 61.2% -320 bps Share Price $47.90 $66.03 -27% Total non-comp. ratio 22.4% 21.7% 70 bps P/E 9.0x 13.4x -33% Pre-tax margin 19.6% 17.1% 250 bps P/TBV 1.8x 2.9x -37% * Bank NIM as of fourth quarter 201 8 & 201 7 ** Prices based market close 1 /30/201 9 & 1 /30/201 8 6
Driving Shareholder Value Through Deal Integration & Balance Sheet Growth 7
Balance Sheet Growth $23,760 $24,520 $25,000 $22,608 $21,715 $21,384 $20,000 $19,129 Infra frastruc structu ture re Build Total Assets in Millions $15,000 $13,326 $9,009 $9,518 $10,000 $6,966 $4,952 $5,000 $4,213 $3,167 $1,558 $- 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 2Q18 3Q18 4Q18 ` 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18 2Q18 3Q18 4Q18 Tier 1 Leverage 32.3% 30.5% 25.6% 21.4% 17.7% 15.4% 16.5% 16.6% 10.2% 9.5% 9.6% 9.5% 9.6% 9.3% Tier 1 Risk Based Capital 49.4% 40.5% 29.1% 27.4% 26.8% 26.7% 25.0% 26.3% 20.3% 19.0% 18.7% 18.4% 18.0% 18.2% Risk Weighting Assets Density 64.9% 56.2% 67.3% 62.7% 57.0% 50.7% 58.2% 46.6% 46.5% 46.9% 46.1% 47.5% 49.0% 47.2% 8
Bank Drove Significant Balance Sheet & Revenue Growth Impact of Bank Growth LTM on Consolidated Results Bank nk grow owth th has been n bal alance anced betwee een n loans and nd inv nvestm tments: (mil.) 12/31/2017 12/31/2018 Loans: Loa Total consolidated assets $21,384 $24,520 Comprised of securities based loans, C&I, and • Investment securities $8,615 $8,557 residential mortgages Loans $7,174 $8,723 Focused lending to high net worth retail clients • Total deposits $13,412 $15,864 AFS & HTM Inves estme ments ts: Total equity $2,862 $3,198 Portfolio primarily GSE MBS, ABS, and • Corporate bonds Annualized Quarterly NII $427 $507 Effective duration of less than 1.6 years as of • Tier 1 Risk Based Capital 19.0% 18.2% 12/31/18 Tier 1 Leverage 9.5% 9.3% NIM (Bank) 2.85% 2.89% ROAA (Bank) 1.31% 1.90% ROAE (Bank) 18.60% 26.90% NPAs/Assets 0.18% 0.14% 9
Stifel Overview 10
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