Core Insights - Stifel Financial Corp. reported significant growth in total client assets and fee-based client assets, increasing by 9% and 14% year-over-year, respectively, reaching record levels [2] - Treasury deposits saw a remarkable surge of 87% compared to the previous year, indicating strong deposit gathering capabilities [2] - The company experienced a 1% increase in bank loans in July, driven by growth in Fund Banking and Residential lending [2] Selected Operating Data - Total client assets as of July 31, 2025, were $522,303 million, up from $481,452 million a year earlier, reflecting a 9% increase [2] - Fee-based client assets reached $209,084 million, compared to $183,421 million in the same period last year, marking a 14% increase [2] - Private Client Group fee-based client assets also increased by 14%, reaching $182,534 million [2] - Bank loans, net, amounted to $21,605 million, up from $20,267 million, representing a 7% increase [2] - Client money market and insured product balances decreased by 2%, totaling $25,683 million [2] - Treasury deposits were reported at $7,246 million, a significant increase from $3,871 million, reflecting an 87% growth [2]

Financial Data and Key Metrics Changes - The company reported revenue of $156 million and net income of $43 million, an increase of $14 million or 48% compared to the same quarter last year, with earnings per diluted share rising to $0.34 from $0.23 [5][6] - The net interest margin improved by 45 basis points from the prior quarter to 3.87%, marking the fourth consecutive quarter of margin improvement [11][12] - Non-interest income decreased by $11.7 million due to prior quarter transactions, but overall revenue grew by 19% compared to Q1 2024 [12][16] Business Line Data and Key Metrics Changes - Average commercial loans increased by $121 million or 6.2% compared to the fourth quarter, reflecting a strategic shift towards commercial lending [13] - The consumer non-brokered average deposits increased by $68 million quarter over quarter, while brokered deposits decreased by $8 million [14] - The loan yields increased by 44 basis points to 6%, benefiting from an interest recovery [13] Market Data and Key Metrics Changes - Average total deposits increased by $60 million quarter over quarter and grew by 1.7% or $200 million compared to Q1 2024 [14] - The cost of deposits decreased by 9 basis points quarter over quarter, with the current cost standing at 1.59% [14][15] - The overall coverage ratio is at 1.09%, reflecting prudent risk management amid market concerns [19] Company Strategy and Development Direction - The company continues to focus on sustainable, responsible, and profitable growth, with a strategic shift towards commercial lending and enhancing retail banking [6][7] - Integration activities for the merger with Pennswoods Bancorp are underway, expected to close by late July, which will position the company among the top 100 banks in the U.S. by asset size [8][9] - The company is also exploring de novo branch opportunities, particularly in Columbus and Indianapolis [7] Management's Comments on Operating Environment and Future Outlook - The current operating environment is characterized by significant market volatility and economic uncertainty, but the company remains focused on managing controllable factors [10][11] - The company expects to maintain its margin performance at or above the high end of its range, depending on future Fed rate cuts [22] - Loan growth will depend on the broader economic environment, which remains unpredictable [22] Other Important Information - The company declared a quarterly dividend of $0.20 per share to shareholders of record as of May 8, 2025 [6] - Non-interest expense declined by 3.8% compared to the prior quarter, driven by disciplined expense management [12][18] Q&A Session Summary Question: Margin guidance and future expectations - Management indicated a core margin of 3.48% and expects to be at the high end of the range, with potential impacts from future rate cuts [30] Question: Deposit growth drivers - The company is transitioning from CDs to more liquid products, with new money market rates around 3.75% [34][38] Question: Credit trends and tariff impacts - Management noted minimal current impact from tariffs, with exposure to manufacturing, transportation, and hospitality sectors being monitored [45] Question: Commercial loan build-out and market share - The company continues to take share in newer verticals and has seen stronger pipelines compared to the previous year [46][54] Question: Competitive landscape and yield trends - New commercial loan yields are at 7.26%, with roll-off yields at 6.76%, indicating competitive pressure [61] Question: Future M&A activity - Management remains open to future M&A opportunities but is currently focused on internal efficiencies and execution [81]