Investor Presentation June 2017

Transcription

1 Investor Presentation June 2017

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 certain non-gaap calculations as additional measures to aid in understanding and analyzing the Company s financial results for the three months ended March 31, 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

3 Our Strategy 3

4 Strategic Vision To build a premier wealth management and investment banking firm Global Wealth Management Institutional Private Client Asset Management Bank Equities Sales + Trading Fixed Income Sales + Trading Investment Banking Research 2,299 financial advisors in 360 branches with more than $225B in client assets $27B in total assets managed through various strategies $13B in assets funded by client deposits Experienced sales force with extensive distribution capabilities Comprehensive platform including research, strategy and DCM teams Over 400 professionals with extensive experience across all products and industry verticals Largest research platform with approximately 1,200 U.S. and 290 European stocks covered 4

5 A History of Growth 2008 Butler Wick 2007 Ryan Beck Acquisition Stifel Bank & Trust 2005 Legg Mason s Capital Markets Division 2010 Thomas Weisel Partners UBS Private Client Branches $247 $ Stone & Youngberg $ Miller Buckfire $ Keefe, Bruyette & Woods $ Barclays Wealth & Investment Management, Sterne Agee, 2014 Sidoti Joint Venture, De La Rosa, Leumi Partners Collaboration Oriel Securities, Agreement 1919 Investment Counsel, Merchant Capital 2013 Acacia Bank & Ziegler 2013 Lotsoff Knight Capital Group s Fixed Income Division $1,091 $1,382 $1,393 $1,594 $1,973 $2,208 $2, Eaton Partners ISM Capital $2, City Securities $676 Net Revenues ($MM) * 2017 Net Revenue annualized based on YTD17 results 5

6 Driving Shareholder Value Through Deal Integration & Balance Sheet Growth 6

7 Total Assets in Millions Balance Sheet Growth $21,000 $20,000 $19,129 $19,136 $17,205 $15,386 $15,000 Infrastructure Build $13,326 $14,214 $10,000 $9,009 $9,518 $9,359 $6,966 $5,000 $3,167 $4,213 $4,952 $1,558 $ Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q E Ratio Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q E Tier 1 Leverage 32.3% 30.5% 25.6% 21.4% 17.7% 15.4% 16.5% 16.4% 16.6% 11.6% 11.5% 11.8% 10.2% 10.1% 10.0% Tier 1 Risk Based Capital 49.4% 40.5% 29.1% 27.4% 26.8% 26.7% 25.0% 29.4% 26.3% 21.3% 20.9% 22.0% 20.3% 20.8% 20.0% Risk Weighting Assets Density 64.9% 56.2% 67.3% 62.7% 57.0% 50.7% 58.2% 52.0% 46.6% 49.0% 49.1% 46.2% 46.5% 45.0% 46.5% 7

8 Bank Drove Significant Balance Sheet & Revenue Growth Impact of Bank Growth LTM on Consolidated Results (mil.) 3/31/2016 3/31/2017 Total consolidated assets $14,214 $19,136 Investment securities $4,154 $6,568 Loans $3,600 $6,071 Total deposits $7,218 $11,701 Total equity $2,417 $2,778 Annualized Quarterly NII $195 $340 Tier 1 Risk Based Capital 21.3% 20.8% Tier 1 Leverage 11.6% 10.1% NIM (Bank) 2.47% 2.66% ROAA (Bank) 1.27% 1.33% ROAE (Bank) 20.1% 18.4% NPAs/Assets 0.28% 0.21% 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. 6 years as of 3/31/17 AFS & HTM Investments: 59% of the portfolio is fully guaranteed by a US GSE or rated AAA as of 3/31/17 Portfolio primarily GSE MBS, ABS, and Corporate bonds Effective duration of approximately 2 years as of 3/31/17 8

9 Stifel Overview 9

10 Stifel Premier Investment Bank and Wealth Management Firm Stifel at a Glance 2016 GAAP Net Revenue - $2.6 billion Global Wealth Management (GWM) 2016 Net Revenue - $1.6 billion Institutional Group (IG) 2016 Net Revenue - $1.0 billion Private Client Stifel Bank & Trust 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 (6.9x) (1) (2), $2.8 billion stockholders equity (2) and $3.0 billion market capitalization (3) 34% Insider ownership aligns employees' interests with other shareholders (4) Over 7,000 associates (2) Balanced business mix (61% GWM / 39% IG) (2016 net revenues) National presence with 2,299 financial advisors (2) Largest U.S. equity research platform with roughly 1,200 stocks under coverage (3) Broad investment banking and institutional sales and trading capabilities domestic and international (1) Assets / equity. (2) As of 3/31/2017. (3) As of 6/1/2017. (4) Insider ownership percentage includes all fully diluted shares, units outstanding and options outstanding, as of 2/17/

11 Leading broker-dealer providing wealth management and institutional services to consumers and companies Bulge Bracket Size / scale Large distribution Trading Retail Issues Lack of focus Banker turnover Lack of commitment Research indifference Lack of growth investors Size / scale Firm focus Stability (financial & personnel) Large distribution Trading Outstanding research Retail Boutique Issues Firm focus Good research Growth investor access Financial / firm stability Trading support Few with retail Institutional 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 2016 U.S. trading volume per Bloomberg. (2) Source: SIFMA and publicly available information for U.S. brokerage networks. Includes investment banks only. Wealth Management #7 Largest Retail Brokerage Network (2) Rank Firm Brokers 1 Bank of America Merrill Lynch 16,343 2 Morgan Stanley Wealth Management 15,777 3 Wells Fargo Securities 14,657 4 Raymond James 7,222 5 UBS 6,969 6 JPMorgan 2,480 7 Stifel 2,299 8 RBC Capital Markets 2,028 9 Oppenheimer & Co 1,159 11

12 Well-diversified, Low Risk Business Model with Balanced Retail and Institutional Exposure 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 Operating Contribution IG 41% IG 39% IG 27% IG 28% GWM 59% GWM 61% GWM 73% GWM 72% Balanced business model facilitates growth in all market environments Note: Net revenues and operating contribution percentages excludes the Other segment. 12

13 A Stable Track Record Through Multiple Business Cycles Non-GAAP Net Revenues (1) ($MM) Total Equity ($MM) $3,000 $2,500 $2,000 $1,978 $2,335 $2,213 $2,581 $2,800 $2,400 $2,000 $2,738 $2,778 $2,492 $2,320 $2,059 $1,500 $1,000 $763 $870 $1,091 $1,384 $1,417 $1,594 $1,600 $1,200 $873 $1,254 $1,302 $1,495 $500 $452 $678 $800 $400 $220 $425 $593 $ $ Total Client Assets (2) ($BN) Book Value Per Share (3) $250 $220 $237 $253 $40 $32.30 $38.84 $38.40 $37.19 $35.00 $200 $166 $187 $30 $24.42 $25.10 $27.24 $150 $100 $94 $114 $122 $138 $20 $12.24 $15.12 $19.24 $50 $35 $59 $53 $10 $8.23 $0 $ (1) 2017 Non-GAAP net revenue based on annualized 1Q17 results (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 ( ) and represents common equity per shares outstanding 13

14 Global Wealth Management 14

15 Global Wealth Management (GWM) Provides Securities Brokerage Services and Stifel Bank Products Overview Grown from 600+ financial advisors in 2005 to approximately 2,300 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 National Presence Net Revenues ($MM)* Operating Contribution ($MM)* $1,600 $1,563 $600 $550 $1,200 $800 $400 $231 $441 $471 $596 $843 $908 $1,377 $1,233 $1,117 $992 $443 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $50 $96 $98 $104 $194 $235 $267 $300 $347 $382 $430 $142 $ $ * 2017 net revenue and operating contribution based on annualized results as of 3/31/

16 Building Scale and Capabilities into a $1.6B Revenue Segment Private Client Asset Management Bank 56 UBS Branches ~40 advisors managing ~$4B in AUM January 2017 ~100 advisors managing over $20B in AUM December 2015 ~130 advisors managing ~ $10B in AUM June 2015 Customized investment advisory and trust services November 2014 Private Client 350 financial advisors and support Revenue production has exceeded expectations October 2009 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 Bank holding company Grown assets from ~ $100M to $7.3B April

17 GWM - Private Client Group Key Operating Metrics Financial Advisors (1) Branches (1) 2,500 2,000 1,885 1,935 1,987 2,041 2,077 2,103 2,291 2,282 2, ,500 1, ,163 1, Accounts (1) Total Client Assets (1) ($MM) 900, , , , , , , , , , , , , , , , , , , , , , , , ,000 50,000 35,446 59,299 52,733 93, , , , , , , , , (1) As of 3/31/2017 and excludes Legacy Sterne Agee Independent Contractor Business

18 GWM Stifel Bank & Trust Acquired FirstService Bank, a St. Louis-based, Missourichartered 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) (4) Total assets $13,300,000 Total deposits 1,170,000 Total equity 932,000 ROAA 1.3% ROAE 18.4% Tier 1 Risk Based Capital 15.4% Tier 1 Leverage 7.2% NPAs/Assets 0.2% Interest Earnings Assets (1) Investment Portfolio (2) Loan Portfolio (3) (Gross) 3% 31% 32% 48% 49% 1% 14% 52% 27% 4% 2% 36% Cash Investment Securities Loans Receivable Note: Data as of 3/31/17. ABS Corporates Munis Agency MBS (1) Average interest earning assets for quarter ended 3/31/17, levels of cash elevated due to sweep of deposits at beginning of quarter. (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. Securities-based lending Residential real estate Other³ Commercial and industrial Commercial real estate 18

19 Growing Asset Management Capabilities Asset Management Subsidiaries with $27.5 Billion in Client Assets Assets $11.4 Billion $11.0 Billion $3.0 Billion $1.8 Billion Chicago Baltimore St. Louis Cincinnati Offices Milwaukee New York Baltimore Florham Park, NJ New York Philadelphia San Francisco 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 ). 1919ic is an SEC Registered Investment Adviser and indirect subsidiary of Stifel 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. 19

20 Institutional Group 20

21 Institutional Group Overview Net Revenues ($MM) (2)(3)(4) Provides securities brokerage, trading, research, underwriting and corporate advisory services $1,200 $997 $976 $1,014 Largest provider of U.S. Equity Research $900 $861 2 nd largest Equity trading platform in the U.S. outside of the Bulge Bracket (1) $600 $455 $559 $587 $668 $626 $507 $605 Full-service Investment Bank $300 Comprehensive Fixed Income platform Equity Brokerage + Investment Banking (4) $0 Fixed Income Brokerage + Investment Banking (4) $ $800 $600 $400 $401 $494 $412 $419 $425 $329 $357 $576 $675 $571 $582 $500 $400 $300 $200 $175 $249 $201 $179 $247 $285 $322 $404 $432 $200 $ (1) Based on 2016 U.S. trading volume per Bloomberg. (2) Includes Thomas Weisel historical investment banking revenues for years 2006 through September 30, (3) 2012 includes realized and unrealized gains on the Company s investment in Knight Capital Group, Inc. of $39.0 million. (4) 2017 revenue based on annualized results as of 3/31/2017 $142 $100 $0 $54 $65 $96 $

22 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 Equities Fixed Income Investment Banking Knight Enhances European debt capital markets capabilities February 2016 Highly complementary fixed income platforms June 2015 Expands Public Finance in Southeast December 2014 Fixed Income Sales and Trading U.S. & Europe, Fixed Income Research July 2013 California-based investment bank and bond underwriter April 2014 Fixed Income IB, Sales and Trading, Private Client October 2011 One of the largest, global fund placement and advisory firms January 2016 UK-based full service investment bank July 2014 FIG Investment Banking/FIG Sales and Trading / Research February 2013 Restructuring advisory December

23 Middle Market Firms All Firms Institutional Group Advisory YTD: Leadership in M&A of Public Companies and deals < $1bn. All Deals < $1 Billion in Value Public Deals < $1 Billion in Value Rank Investment Bank Sell-side Buy-side Total Value 1 Goldman Sachs $ JPMorgan Morgan Stanley Bank of America Merrill Lynch Stifel Jefferies LLC Barclays Citi Credit Suisse Houlihan Lokey Rank Investment Bank Sell-side Buy-side Total Value 1 Stifel $ JPMorgan Morgan Stanley Bank of America Merrill Lynch Goldman Sachs Sandler O'Neill & Partners Barclays Citi Evercore Partners Inc Deutsche Bank Rank Investment Bank Sell-side Buy-side Total Value 1 Stifel $ Jefferies LLC Houlihan Lokey Sandler O'Neill & Partners Piper Jaffray & Co Moelis & Co Raymond James & Associates Inc Rothschild & Co Robert W Baird & Co William Blair & Co LLC Rank Investment Bank Sell-side Buy-side Total Value 1 Stifel $ Sandler O'Neill & Partners Jefferies LLC Raymond James & Associates Inc Houlihan Lokey Piper Jaffray & Co Moelis & Co Rothschild & Co Stephens Macquarie Group Source: Dealogics M&A Analytics as of June Note: Includes all sell-side and buy-side strategic or sponsor-backed disclosed value deals, where the deal is announced between 2010 and 2017 YTD, with a U.S. target, acquirer, acquirer subsidiary or divestor, and a final stake greater than 50%. 23

24 Institutional Group Equity Underwriting Accomplished U.S. Equity Underwriting Franchise All Equity Transactions All Managed Equity Deals Since 2010 ($ in billions) # of $ Rank Firm Deals Volume 1 JPMorgan 1,608 $ Bank of America Merrill Lynch 1,574 $ Citi 1,449 $ Morgan Stanley 1,426 $ Barclays 1,304 $ Credit Suisse 1,295 $ Wells Fargo Securities 1,268 $ Goldman Sachs 1,209 $ Deutsche Bank 1,139 $ Stifel / KBW 1,135 $ RBC Capital Markets 1,125 $ Raymond James & Associates 849 $ UBS 849 $ Piper Jaffray & Co 711 $ Jefferies LLC 667 $ Robert W Baird & Co 623 $ JMP Securities LLC 547 $ Cowen & Company LLC 544 $ Oppenheimer & Co Inc 515 $ William Blair & Co LLC 494 $ KeyBanc Capital Markets 489 $ BMO Capital Markets 460 $ Canaccord Genuity Corp 421 $ SunTrust Robinson Humphrey 417 $ Ladenburg Thalmann & Co 349 $48.2 Bookrun Equity Deals Since 2010 ($ in billions) # of $ Rank Firm Deals Volume 1 JPMorgan 1,458 $ Bank of America Merrill Lynch 1,443 $ Morgan Stanley 1,316 $ Citi 1,283 $ Barclays 1,109 $ Goldman Sachs 1,108 $ Credit Suisse 1,093 $ Deutsche Bank 914 $ Wells Fargo Securities 908 $ UBS 624 $ RBC Capital Markets 591 $ Jefferies LLC 561 $ Stifel / KBW 412 $ Raymond James & Associates 288 $ Piper Jaffray & Co 280 $ Cowen & Company LLC 270 $ Leerink Partners LLC 193 $ BMO Capital Markets 178 $ Robert W Baird & Co 170 $ Roth Capital Partners 169 $ Aegis Capital Corp 116 $ KeyBanc Capital Markets 115 $ William Blair & Co LLC 112 $ Sandler O'Neill & Partners 102 $ Canaccord Genuity Corp 94 $3.4 Source: Dealogic. Rank eligible SEC registered IPOs and Follow-On offerings since Includes demutualizations. As of 5/31/2017. 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. 24

25 Institutional Group Research Largest U.S. Equity Research Platform U.S. Equity Research Coverage (1) Companies Under Coverage Rank Firm Overall Mid Cap Small Cap 1 Stifel / KBW 1, JPMorgan 1, Wells Fargo Securities, Llc 1, BofA Merrill Lynch 1, Citi Jefferies & Co Morgan Stanley Raymond James Barclays Deutsche Bank Securities Goldman Sachs RBC Capital Markets Credit Suisse UBS Robert W. Baird & Co., Inc Cowen And Company Suntrust Robinson Humphrey Piper Jaffray Morningstar, Inc BMO Capital Markets Stifel Research Highlights Largest provider of U.S. Equity Research Largest provider of U.S. Small Cap Research² #1 U.S. provider of Financial Services coverage Ranked #1 in 2016 & 2017 Thomson Reuters StarMine Awards Only firm ranked in the Top 10 each year for the last 11 years in the Thomson Reuter StarMine Analyst Awards Coverage Balanced Across All Market Caps (1) Small Cap 28% Large Cap 36% (1) Source: StarMine rankings as of 5/31/17. 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. Mid Cap 36% 25

26 Institutional Group Equity Sales and Trading Powerful Platform Spanning North America and Europe Institutional Equity Sales 80 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 sales traders located in Equity Trading Baltimore, New York, Boston, Dallas, San Francisco, and London 12 position traders covering each major industry 13 specialized traders focused on: Option Trading Profitable model with advantages of scale Extensive Distribution Network Relationships with over 3,500 institutional accounts globally Active daily market maker in over 3,700 stocks Traded over 7.4 billion shares in 2016 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 26

27 Institutional Group Fixed Income Capital Markets Strong Fixed Income Brokerage Capabilities Comprehensive platform Overview Client Distribution (1)(2) 125 traders with annual client trade volume approaching $500 billion 50-person Fixed Income Research and Strategy Group Widespread distribution More than 220 Institutional sales professionals covering over 12,000 accounts 49 institutional fixed income offices nationwide International offices in London, Zurich and Madrid Trust Company Insurance 1% Company 7% Hedge Fund 3% Bank or thrift 17% Government 3% Other 2% Broker/Dealer 7% Corporation 1% Credit Union 1% Money Manager 58% 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 Platform & Products 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 High Yield and Distressed Credit Loan Trading Group Aircraft Finance & Credit Solutions Hybrid Securities Emerging Markets Structured 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. Investment Grade Credit Municipal Sales and Trading and Public Finance UK Sales and Trading (former Knight Capital team) 27

28 Institutional Group Public Finance 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 Stifel s Public Finance Group ranked #1 in municipal negotiated issues in 2016 Total of 26 Public Finance offices Nearly 150 Public Finance professionals Overview 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. 28

29 Second Quarter Update & First Quarter Review 29

30 Second Quarter Financial Update Operating Environment Remains Mixed: Institutional Segment: Brokerage Negatively impacted by lower sequential industry-wide volumes, low volatility, a flatter yield curve, and tighter spreads. Global Wealth Management: Brokerage Impacted by move to fee-based accounts as well as uncertainty regarding the current political and market environment. Asset Management Positively impacted by higher equity market values, higher short-term rates, migration to fee-based accounts, and net new asset growth. Bank Asset growth continues to be driven by bank earnings. Second quarter NII benefitting from March and December rate increases. Updated Guidance from First Quarter Earnings Conference Call: Institutional Segment: 2Q17 Fixed Income Brokerage revenue is tracking 18%- 22% below our guidance from our 1Q17 earnings conference call due to headwinds from the market environment. Advisory pipeline remains ahead of last year s levels and we expect that our full year 2017 results may be more weighted to the second half of the year. Global Wealth Management: Bank NIM expected to be at the high end of the expected bps sequential increase. Expenses: Reiterate our annual comp. ratio range of 60.5% % as well as our 2Q17 non-comp. range of $151 mil.- $158 mil. (ex. loan loss provisions). Share Repurchases: In 2Q17TD, we repurchased 295,000 shares at an average share price of $ We have 7.1 million shares remaining on our current authorization. 30

31 1st Quarter Highlights Financial Highlights Three Months Ended Non-GAAP (000s, except per share data) 1Q17 1Q16 4Q16 1Q17 U.S. GAAP Net revenues $675,531 $619,974 $661,391 $677,515 Compensation ratio 64.6% 66.3% 63.6% 62.3% Non-compensation ratio 23.7% 26.6% 28.1% 22.8% Pre-tax operating margin 11.7% 7.1% 8.3% 14.9% Net income $65,512 $27,055 $26,880 $61,806 Preferred dividend $2,344 $2,343 $2,344 Net income available to common shareholders $63,168 $27,055 $24,537 $59,462 Earnings per diluted share available to common shareholders $0.78 $0.36 $0.31 $

32 Brokerage & Investment Banking Revenue Brokerage: Three Months Ended (000s) 1Q17 1Q16 % Change 4Q16 % Change Global Wealth Management brokerage revenue $171,494 $172, % $160, % Institutional brokerage: Equity 53,820 62, % 64, % Fixed income 66,817 83, % 65, % Total institutional brokerage 120, , % 129, % Total brokerage revenue $292,131 $318, % $289, % Investment banking: Three Months Ended (000s) 1Q17 1Q16 % Change 4Q16 % Change Investment banking: Capital raising: Equity $48,812 $25, % $48, % Fixed income 25,104 27, % 29, % Total capital raising 73,916 53, % 78, % Advisory fees 52,936 47, % 56, % Total investment banking $126,852 $100, % $134, % 32

33 GAAP to Non-GAAP Reconciliation Three months ended March 31, 2017 GAAP Results Three months ended (000s) 03/31/17 Total GAAP Compensation & benefits expense $436,387 GAAP comp. ratio 64.6% Total GAAP non-compensation expense $160,125 GAAP non-comp. ratio 23.7% GAAP pre-tax margin 11.7% Adjusted Non-GAAP Results Three months ended (000s) 03/31/17 Total Adjusted Non-GAAP Compensation & benefits expense $422,047 Adjusted Non-GAAP comp. ratio 62.3% GAAP to Non-GAAP Reconciliation for Fourth Quarter 2016 (000s) 03/31/17 GAAP Net Income $65, 512 Preferred Dividend 2,344 Net Income available to common Shareholders $63, 168 Non-GAAP Adjustments Acquistion-Related 17,114 Severance 4,535 Provision for Income Taxes (25,355) Total Non-GAAP Adjustments ( 3, 706) Non-GAAP Net Income Available to Common Shareholders $59, 462 Total adjusted Non-GAAP non-compensation expense $154,800 Adjusted Non-GAAP non-comp. ratio 22.8% Adjusted Non-GAAP pre-tax margin 14.9% 33

34 Avg. IEA (mil.) NIM Balance Sheet & Net Interest Margin Net Interest Income Drivers 3.00% $15, % 2.00% $10, % 1.00% $5, % $0 0.00% 2Q16 3Q16 4Q16 1Q17 Avg. Non-Bank IEA Avg. Bank IEA NIM Bank NIM Net Interest Income Drivers: Total assets increased to $19.14 bil. were flat sequentially but increased 35% Y/Y Average interest earning assets decreased to $15.2 bil. down 3% sequentially but up 55% Y/Y NIM increased to 224 bps, up 33 bps sequentially & 23 bps Y/Y. NIM at Stifel Bank of 266 bps increased 42bps sequentially & 19 bps Y/Y Firm-wide NII of $85.1 mil. increased 14% sequentially and 74% Y/Y. Book value per share was $38.40 Capital Structure (in millions, except ratios) 1Q16 2Q16 3Q16 4Q16 1Q17 Total Assets $14,214 $15,386 $17,205 $19,129 $19,136 Total Equity $2,417 $2,491 $2,692 $2,738 $2,778 Tier 1 Leverage Ratio 11.6% 11.5% 11.8% 10.2% 10.1% Tier 1 Risk Based Capital Ratio 21.3% 20.9% 22.0% 20.3% 20.8% 34

35 Segment Results 35

36 Pre-tax Margin Pre-tax Contribution (mil.) Net Revenue (mil) Global Wealth Management $500 $400 $300 $200 $100 $0 GWM Net Revenue 1Q16 2Q16 3Q16 4Q16 1Q17 Investment Banking & Other Net Interest Asset Management & Service Fees Brokerage GWM Pre-tax Margin & Contribution 35% $150 30% 25% $100 20% 15% $50 10% 5% 0% $0 1Q16 2Q16 3Q16 4Q16 1Q17 Pre-tax Contribution Pre-tax Margin Net revenue in the GWM segment was $443 mil., up 9% sequentially & 17% Y/Y Brokerage revenue increased 7% sequentially but declined 1% Y/Y Ex. Sterne IBC & Clearing, Brokerage revenue increased 9% Y/Y Net interest income increased 14% sequentially & 73% Y/Y 2,299 total FAs up from 2,282 $252.4 bil. in client AUA, up 7% sequentially Compensation ratio was 51.6% down 130 bps sequentially & 670 bps Y/Y Non-comp. ratio was 16.3% down 70 bps sequentially & 80 bps Y/Y Pre-tax margin was 32.1% up 200 bps sequentially & 750 bps Y/Y. 36

37 Stifel Bank & Trust (mil. except for %'s) 1Q17 1Q16 % Change 4Q16 % Change Assets: Investments $6,557 $4,148 58% $6,209 6% Mortgage Loans 2, % 2,161 2% Commercial Loans 1,831 1,295 41% 1,710 7% Securities Based Loans 1,729 1,346 28% 1,614 7% Total Loans, net $5, 865 $3, % $5, 591 5% Loans Held for Sale % % Total Assets $13,233 $8,172 62% $12,798 3% Liabilities: Deposits $11,701 $7,218 62% $11,527 2% Credit Metrics Non-performing assets ($s) % 27 4% Non-performing assets (%s) 0.21% 0.28% -7 bps 0.21% 0% Allowance as a percentage of loans 0.87% 0.98% -12 bps 0.81% 6 bps Net Interest Margin 2.66% 2.47% 19 bps 2.24% 42 bps 37

38 Pre-ax Margin Pre-tax Contribution (mil.) GAAP Net Revenue (mil.) Institutional Group Institutional Group Net Revenue $300 $250 $200 $150 $100 $50 $0 1Q16 2Q16 3Q16 4Q16 1Q17 Brokerage Capital Raising Advisory Fees Other 20% 15% 10% 5% 0% Institutional Group Pre-tax Margin & Contribution 1Q16 2Q16 3Q16 4Q16 1Q17 Pre-tax Contribution Pre-tax Margin $50 $40 $30 $20 $10 $0 Total net revenue of $237 mil. decreased 6% sequentially & 2% Y/Y Investment banking revenue of $115 mil. decreased 6% sequentially but increased 25% Y/Y Equity underwriting of $37 mil. decreased 5% sequentially but increased 97% Y/Y Debt underwriting of $25 mil. decreased 10% sequentially & 4% Y/Y Advisory revenue of $53 mil. decreased 5% sequentially but increased 12% Y/Y Brokerage revenue of $121 mil. decreased 7% sequentially & 17% Y/Y Equity brokerage revenue of $54 mil. was down 16% sequentially & 14% Y/Y Fixed income brokerage revenue of $67 mil. was up 2% sequentially but down 20% Y/Y Pre-tax margin was 16.8% down 200 bps sequentially but up 470 bps Y/Y. Pre-tax Contribution decreased by 16% sequentially but increased 36% Y/Y 38