Stifel Nicolaus, the quiet St. Louis-based regional, doubled its size in two years with its purchases of Legg Mason's capital markets group in 2005 and now Ryan Beck, Bank Atlantic's brokerage arm, in January. Registered Rep.'s senior editor, John Churchill, talked with “Coach K” about Stifel's success and recent activity.
Registered Rep.: Ron, how do you say your last name?
Ron Kruszewski: It's pronounced Kru-chef-ski, like Mike Krzyzewski at Duke — guys here sometimes call me “Coach K.”
RR: Tell us about Ryan Beck, why them and why now?
RK: You know, it's funny, every year our board asks what our strategic plan is, and I say the same thing every year: “We want to be in a position to take advantage of opportunities.” After we bought Legg's unit we had 500-plus reps and a capital markets group built for 1,500. So Ryan Beck was an opportunity.
RR: How do Stifel and Ryan Beck compare? And what are the integration plans?
RK: They're very similar. Our revenue per broker is around $470,000 with $50 million-plus in average assets. Ryan Beck's average per broker is roughly $400,000 with similar assets. As far as integration, there'll be no branch closings, but there will be some changes since there has to be one organization. Still, it's a little early to speak of. Heck, integration is always a wildcard but we think we're pretty good at it.
RR: Regional firms catch a lot of flack for barely subsisting financially — how does Stifel stack up versus the industry?
RK: Since the industry's revenue peak in 2000, our revenues are up 180 percent and our pretax profits are up 400 percent. And while our stock price was up only 3 percent last year, it's up almost 400 percent in the last five years. That's significantly better than the industry overall.