Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Stifel Financial Corp (NYSE: SF) Q1 2026 Earnings Call dated Apr. 22, 2026
Corporate Participants:
Joel Jeffrey — Head of Investor Relations
Ron Kruszewski — Chairman and Chief Executive Officer
Jim Zemlyak — Chief Financial Officer
Analysts:
Devin Ryan — Analyst
Mike Brown — Analyst
Steven Chubak — Analyst
Brandon Hawken — Analyst
Alex Blostein — Analyst
Bill Katz — Analyst
Presentation:
Operator
It’s sam. It. Satan. Sa. Please stand by. Good day and welcome to The Stifel Financial Q1 26 Financial Results Conference call. Today’s conference is being recorded at this time. I would like to turn the conference over to Joel Jeffrey, Head of Investor Relationship. Please go ahead.
Joel Jeffrey — Head of Investor Relations
Thank you operator. Good morning and welcome to Stifel’s first quarter 2026 earnings call on behalf of Stifel Financial Corp. I will begin the call with the following information and disclaimers. This call is being recorded. During today’s presentation we will refer to our earnings release and financial supplement, copies of which are available@stifel.com Today’s presentation may include forward looking statements that are subject to risks and uncertainties that may cause actual results to differ materially.
Stifel Financial Corp. Does not undertake to update the forward looking statements in this discussion. Please refer to our notices regarding forward looking statements and non GAAP measures that appear in the earnings release. I will now turn the call over to our Chairman and Chief Executive Officer Ron Krushewski.
Ron Kruszewski — Chairman and Chief Executive Officer
Thanks Joel. Good morning and thanks to everyone for joining us. In the first quarter we delivered very strong performance. Net revenues of 1.48 billion were up 18% from a year ago. That includes a non recurring gain from the sale of Stifel and Independent Advisors which closed in February, which was partially offset by interest on a legal judgment. We’ve excluded both from our core results. Excluding the sia gain, revenue grew 15%. Either way, it was a record first quarter and regardless it’s a growth rate comparable to the best firms on the Street.
Earnings per share were $1.48 on a GAAP basis and $1.45 on a non GAAP basis compared to 33 cents last year. That’s a significant improvement, so I want to be transparent. Last year’s results were impacted by 180 million legal accrual, which was unusual to say the least. Adjusting for that, EPS was up 32%. On a comparable basis, our annualized return on tangible equity was nearly 25%. We expect 2026 to be a good year and the first quarter reflects that. Yet the environment has become more uncertain against a backdrop of escalating geopolitical risk.
Energy prices have risen, credit spreads have widened and interest rate uncertainty has increased. The wildcard remains a conflict in Iran and its potential impact on energy prices, inflation and ultimately growth. But I’d like to note that unlike some of our larger pairs, people’s business model isn’t built around trading volatility. We have a trading business, but it’s client driven and relationship oriented, not structured to capitalize on market dislocations. Delivering these results in a volatile quarter tells you something important about the durability and diversification of what we’ve built.
Our growth was broad based global wealth management delivered record first quarter net revenue driven by record asset management revenues and growing advisor productivity. We also generated record first quarter investment banking revenue, producing a record first quarter for our institutional business. Our firm wide pretax margin was more than 22% reflecting continued robust wealth management margins coupled with an institutional pre tax margin of nearly 20%. It is noteworthy that this metric improved nearly 1,300 basis points from last year, benefiting from both revenue growth and our international equities restructuring.
Jim will provide more detail on that. Look, if the risk I cite remain within a range of market expectations, we are confident in a strong 2026. That confidence is grounded in something more than one quarter. Let me put these results in the longer context. TFO is a company that both grows and understands the concept of return on invested capital. We’ve scaled revenue from about 100 million in 1996 to roughly 6 billion today and we’re targeting $10 billion in revenue and 1 trillion in client assets.
We grow and we grow the right way. That long term philosophy also informs how I think about some of the questions dominating every earnings call so far this season. For each one, I want to tell you what Stifel is doing and share my observations about what I’m seeing in the market around us. The first is AI. Across Stifl, we’re seeing real benefit from our AI investments. The technology enables our advisors, our investment bankers, our commercial lenders and support teams to work faster and smarter.
In every case, we’re working to enhance client relationships with AI, keeping our professionals at the center of the value proposition. The opportunity here is significant. We are in the early process of linking our data to these new tools and there is a lot of work ahead. But the early results give me confidence that we’re on the right track, on the right path. But I’d be less than candid if I didn’t raise a concern about frontier models like Mythos that are becoming an entirely new category of technology.
As recently as a few weeks ago, I’m not sure any of us really fully understood what Mythos was, possibly even those that created it. And the next version, as I understand it, is already in development. Models this powerful increase capability on both sides of the table for those defending and for those who would do harm. And if you Ask me what our industry needs to get right before anything else. The answer is cyber. Not just for Wall Street. This requires a national response. I have consistently said that this is an issue of national security.
The second is credit. At Stifeville, our lending philosophy has never been built around chasing yield. We treat lending as a relationship oriented business, not a volume driven growth engine. The headlines this season involved specific credit situations. First Brands, Tricolor, Medallia, where aggressive structures, weak collateral monitoring and in some cases fraud drove the losses. Depot had essentially zero exposure to any of them. As an aside, the more recent concern has been about liquidity in private credit vehicles.
Some funds are limiting withdrawals and we’re seeing secondary market participants offering liquidity at significant discounts to nav. It reminds me of the scene and It’s a Wonderful Life where Potter is trying to buy Bailey Billingham loan shares of $0.50 on the dollar during a run on the bank. The underlying assets haven’t changed, but when everyone rushes for the exit at once, the gates come down. That’s a structural issue. The third consistent question surrounds software loans. I read the predictions that every software loan is essentially worthless given AI disruption.
To put some numbers to Stifel, our software loan exposure is approximately 500 million on a $43 billion balance sheet. Not a material number. But the more important point is that we have reviewed our software exposure carefully. And while there are always normal pockets of stress, we don’t see the broad credit issues that the headlines suggest. The fourth is legislation and market structure. Two questions are dominating this debate, right? Stablecoin yield and tokenized equities. Let me tell you where Stifel stands on both.
On stablecoins we will offer them. But in my opinion, if a stablecoin pays yield, that’s a deposit subject to capital requirements, aml, BSA and the full framework of bank regulation. Or if the yield comes from investing in the underlying funds, then it’s a money market fund. Follow those rules. Legislation should not create a third option that avoids both. On tokenized equities, we will build the capability to offer, settle and trade them. But in my opinion, the regulatory framework should follow the underlying asset.
A tokenized Apple share is still Apple stock. Every rule that applies to that stock, disclosure, best execution, settlement, finality, investor recourse applies to the token. The technology changes the delivery, it doesn’t change the obligation. And for those who say this is about protecting the incumbents, if that was true, we wouldn’t be building the capability at all. But we are building this capability. The principle is simple. A deposit is a deposit a security is a security. Custody is custody.
Nearly a century of investor protection wasn’t built to apply only to some participants. The technology doesn’t change that. I’ve discussed AI and software disruption, credit markets and legislation and market structure. In each case. I wanted you to understand both where Stifel stands and my observation about what’s happening around us. Over the last 30 years we have shown a consistent ability to adjust to economic and technology change. Global wealth management is growing, our institutional pipelines are strong and our investments in the innovation economy through venture lending and deposit generation are paying dividends.
Bottom line. What I see is a firm that is very well positioned. So Jim, please take us through the numbers.
Jim Zemlyak — Chief Financial Officer
Thanks Ron and good morning everyone. Before I jump into the financial results, I’d remind everyone that the EPS numbers are reported on a split adjusted basis following our 3 for 2 stock split that was effective in late February of this year. Turning to the results, total non GAAP revenues of 1.44 billion was right in line with consensus estimates. Investment banking was the primary upside driver, exceeding expectations by $8 million or 2% as their number of transactions closed late in the quarter.
Advisory revenue was the primary driver of the beat. Transactional revenue came in 1% below expectations but increased 7% from the prior year. I’ll cover the components in more detail when we get to the institutional segment. Asset management revenue was modestly above consensus and increased 12% from the prior year and was driven by market appreciation and net new asset growth. Net interest income came in at the lower end of our guidance and $3 million below consensus. I’ll cover the details and the second quarter guidance when we get to the Global Wealth Management section.
To highlight the miss to consensus expectations was driven by lower corporate or non bank net interest income. Expenses were well controlled and benefited from the strategic actions Ron referenced earlier. Both our comp ratio and non comp expenses came in below consensus. The effective tax rate was roughly 23%, slightly below both guidance and consensus due to improved profitability from our non US operations. Turning to Slide 4 Global Wealth Management generated $932 million in net revenue, the strongest first quarter in our history and essentially in line with last quarter’s record.
Results were driven by record asset management revenue and growth in net interest income. These results are particularly strong given the sale of SIA reduced our transactional and asset management run rate for two months during the quarter. We ended the quarter with total client assets of $539 billion and fee based assets of $220 billion, excluding the SIA impact, total client assets and fee based assets were essentially flat sequentially despite the equity market decline as net new asset growth was in the low single digits and was offset by market depreciation.
Our recruiting pipeline remains robust though activity is episodic and dependent on changing competitive and market dynamics. Over the last 12 months we’ve recruited trailing 12 month production totaling approximately $80 million, which does not include the impact that recruiting has on net interest income. Our client driven balance sheet continues to enhance both earnings consistency and client engagement. As I mentioned, net interest income came into the lower end of our guidance due to slower loan growth as market volatility impacted fund banking late in the quarter more than offsetting growth in residential mortgages, securities based lending and CNI loans.
Non bank interest income, particularly within corporate interest and securities lending was approximately $3 million lower than originally forecast. For the second quarter, we expect net interest income in the range of $280 to $290 million. Client cash balances increased meaningfully during the quarter. Suite balances increased by more than $670 million while non wealth client funding increased by nearly $1.2 billion, reflecting strong momentum from our Venture Group third party money fund balances increased by nearly $200 million.
We have significant funding to grow our loan book. While loan growth in the first quarter was slower than originally forecast, we’ve already seen fund banking activity pick up in April and we are maintaining our full year guide of up to $4 billion in asset growth. Turning to slide 5, our Institutional Group posted its strongest first quarter in our history. Revenue was $495 million up 29% year over year driven by record first quarter investment banking. Investment banking revenue totaled $341 million, up 44% year over year, coming in slightly above our recent guidance due to a number of transactions closing late in the quarter with a particularly meaningful contribution from our new partners at Brian Garnier.
Advisory revenues increased 59% to $218 million with continued strength in financials, industrials, consumers and health care. Equity capital raising was 67 million, our second strongest first quarter result with increased issuer engagement led by health care industrials and energy. Fixed income underwriting of 50 million was up 9% year over year driven by increased public finance activity and higher corporate issuance. We remain the number one negotiated issue manager in public finance by deal count with nearly 15% market share and are also seeing increased success in larger par value transactions.
Investment banking and advisory pipelines remain very strong. That said, the pace of realization will depend on the geopolitical and economic factors that Ron mentioned earlier, including energy prices, credit spreads and interest rate uncertainty. We continue to anticipate a strong 2026 transactional revenue increased 4% year over year, driven by a 12% increase in fixed income revenue reflecting increased client activity from market volatility. Equity Transactional revenue was down 7% entirely reflecting the European restructuring.
Excluding that impact of a $9 million year over year decline due to those restructuring efforts, our core equity transactional business grew by 10%. This was also the primary driver of the nearly 1,300 basis point improvement in our institutional pretax margins year over year. While we’ve made significant progress in our non U S operations, the first quarter benefited from some larger advisory fees and results will not be linear over the remainder of the year. Moving on to expenses, our comp ratio of 57.5% was at the high end of our full year guidance and down from 58% a year ago.
We were certainly conservative in our comp accruals early in the year and will continue to look for leverage as the year progresses. Non compensation expenses totaled 293 million, up 8% year over year. After excluding the illegal accrual from the first quarter of 2025, our operating non comp ratio was 19% and it was at the midpoint of our full year guidance. The declines in our comp and non comp ratios benefited from the strategic actions referenced earlier and we remain confident in our full year guidance.
Turning to Slide 7, our capital position remains strong and provides meaningful strategic flexibility. The Tier 1 leverage ratio increased to 11.4% and the Tier 1 risk based capital ratio rose to 18.7%. Based on a 10% Tier 1 leverage target. We ended the quarter with nearly $560 million of excess capital. I’d also highlight that we have thoroughly reviewed the new proposed capital rules. Based on our review, Stifel would obtain some relief across risk based capital requirements, but these rules would have no material impact on our Tier 1 leverage capital.
Finally, we repurchased 2.8 million shares during the quarter and have 10.2 million shares remaining under the current authorization. Assuming no additional repurchases and a stable stock price, our fully diluted share count for the second quarter is expected to be approximately 163.1 million shares. And with that, Ron, back to you.
Ron Kruszewski — Chairman and Chief Executive Officer
Thanks Jim. I want to close by saying that I’m generally excited about where Stipel is headed. We have a strong business, an experienced team and a model that has proven itself in good times and in challenging ones, the environment is uncertain. I said that at the outset and I mean it. But uncertainty has always been the context in which Stifel has grown. Look, global wealth management is growing. Our institutional pipelines are strong and I look forward to reporting our future progress. So with that operator, please open the lines for questions.
Questions and Answers:
Operator
Thank you. If you would like to ask a question, please Signal by pressing STAR1 on your telephone keypad. If you are using a speakerphone, please make sure the mute function is turned off to allow the signal to reach our equipment. In the interest of time, we ask that you please limit yourself to one question and one follow up question. Again, press Star one to ask a question. We’ll pause for just a moment to assemble the queue. We will take our first question from Devin Ryan with Citizens Bank.
Devin Ryan
Good morning Ron and Jim, how are you?
Ron Kruszewski
Morning. Good morning.
Devin Ryan
Good question on A.I. Ron, appreciate the context you gave in the script, but a couple questions we’re getting obviously is the technology gets stronger and stronger and potentially agents are automating more and even transacting. Do fewer people seek out financial advisors or does that impact pricing that advisors charge? And then the more pointed question that we’re getting is just around kind of tools that automate kind of customer cash sweep and just does that drive balances even lower? And so that’s a revenue stream that firms have to think about.
Love your thoughts on both of those. Thank you.
Ron Kruszewski
Well, look, the technology is powerful to your first question and it just really helps advisor productivity. I believe, as I’ve said in many things I’ve talked about that today at least the models are mathematically driven and they’re great at summarizing, organizing, helping you solve math. I said it’s like chess, there’s a finite board and it’s very good at that. When you move to judgment, which is what our advisors do, it just really isn’t that good. And I’m not really comfortable thinking that we’re going to serve our clients with some consensus building mathematical AI, to be honest with you.
And we can debate whether or not human judgment will matter, but investing in markets are not a finite game. It’s constantly changing. Every second it changes. The participants change, their outcomes change, their risk tolerances change. And so you know, that’s an ever moving target. So to answer your question, what will happen, I believe at least on the advisor side, is that this will make our advisors more productive. It will unearth potentially and it will more opportunities, more ideas, more things on tax savings idea, more on estate, more things that will Help our advisors do what they do, which is generally be the financial advisor to not only individuals but to families.
So I see this as a tailwind to advice, not a headwind. And you know, it’s a more sophisticated version. We’ve seen it in the past with robo advisors and a number of things with technology better. But again, I’m going to say it’s a tailwind to the advice business as it relates to Angenic type models and the cash optimization. Look, we’ve been through that, Devin. I mean, you know, we have about Jim, going to say this I think when I look at it. Overall we have about 60 billion of our AUM that I would say is allocated to short term cash between sweep deposits, smart rate money market funds, short term treasuries, about $60 billion, which is frankly about consistent, a little 11, 12% of our AUM toward that.
And of that, when you get right down to it, after you take out advisor cash, we have about 7 billion. That is if you would be unsorted. I love that industry term. And look, it’s transactional cash. I look at my own accounts, I have transactional cash because I have cash and I have needs and I’m paying bills or I’m doing things or I’m getting a dividend, I’m reinvesting it. So will, will some, you know, technology come that will help optimize that? I think so, you know, but at what cost? It’s not free.
And what kind of movement, what kind of transactional things are going to happen? Listen, I think it’ll happen, but do I lose sleep over that? No. Okay. This is a business model and you know, I’m hearing a lot of things. Well, you just replace it with fees and things like that. And I think, well look, if we could do that, we’d do it anyway. We’re not going to do it just because of this. So not overly concerned about the second. Very optimistic about the first part of your question.
Jim Zemlyak
Maybe add a little bit of detail there to support what Ron was saying is, you know, of the 60 billion as of the end of the first quarter, 12 billion was sweep. So roughly a third of that is an advisory cash accounts. And so that’s not subject to the same type of sorting dynamics we’re talking about here. So that’s how you get to that seven or eight billion dollars that’s remaining. And I’d just say, you know, as Ron reiterated, we’ve been out in front of this topic minimizing our exposure to this.
We’ve Adjusted our balance sheet both on the asset side and the liability side to give clients the yield seeking products they want on the liability side side and having a flexible balance sheet on the asset side to earn an acceptable return. So do we have some exposure here? Everyone has some exposure, but you’re never going to see, as Ron said, transactional cash go to zero. So I think on a relative basis this general topic is less impactful to Stifel than to a lot of other players. You think back 10 years ago, we funded our bank balance sheet 100% with sweep accounts.
Today that’s 12 of a much bigger number. So we’ve diversified and have already seen the sorting occur to a material extent.
Ron Kruszewski
Yeah. And not. And I answer the question, I tell you it’s not that big of an issue. I’m given a lot of oxygen to it. But I do think about these things and I think, you know, for Steve, really is not a big issue. I mean look at the numbers. But you can take it to the broader financial system and you know, zero based interest in many banks and stuff and you wonder, you know, what will happen there. And my viewpoint is that, you know, the market will adjust if rates go up. So are loan banks are earning their spread and return on capital.
So enough said. That’s a lot of oxygen to something that I’m not thinking that much about.
Devin Ryan
Appreciate it both of you and you know it’s a question that we’re I think all getting quite a bit. So just addressing it. Appreciate it. Lastly, quick follow up just on investment banking. Obviously very good start to the year. Sounds like backlogs are at a pretty healthy level as well. When you drill into that. Can you just talk about the depository side, like just the expectations for more activity there and how that’s kind of feeding into I think maybe the announced backlog or even preannounced backlog and then with sponsors, our middle market sponsors reengaged right now or do we need to see them ramp up and that’s progressed.
Ron Kruszewski
Yeah, look on the depository side, I was talking with Tom Michaux a little bit about this and what I would say is that in fact crossed M and A not just on the depository side, but specifically on the depository side. You know, there’s a lot of uncertainty and this uncertainty is impacting buyers. You know, you talk, read the press saying about $150 oil and interest rates may be rising and you know what happens to credit spreads, et cetera, et cetera. And I think that there’s a Pause. There’s some market concerns about, you know, have the deals been done with enough of a premium.
So there’s a little bit of combine all this and I think making people think about it. But the overriding question as depositories is that this administration, and just compared to the last administration is fostering and encouraging bank M and A. And that’s not going to change. And as we get closer to an election, not the midterms per se, but the 2028 election, the potential and what’s going to happen is going to happen. All right. People are incented to do that. It’s not linear, which is what we’re seeing now.
And that’s, you know, you need the same thing as it relates to 2026. You know, deals got to be announced in the next couple of months. Otherwise they’re 2027 deals. But that’s what I would say and an overall M and A. Look, we’re seeing a lot of activity, but my sense is that if we didn’t have the economic uncertainty that we have out there, we’d be seeing even more
Jim Zemlyak
Specific to sponsor. We’re seeing a lot of activity and growth and backlog across a number of verticals. The one area I would call out that has been a little bit weaker is technology. And that’s not as big of a vertical for us. But that is certainly area that has been slower.
Ron Kruszewski
Software.
Jim Zemlyak
Software specifically.
Devin Ryan
Yep, got it. Okay, well, I’ll leave it there. Thank you both. Appreciate it.
Jim Zemlyak
Yep, thank you.
Operator
We will take our next question from Mike Brown with ubs.
Jim Zemlyak
Hey Mike.
Mike Brown
Great, great. Good morning.
Jim Zemlyak
Morning.
Mike Brown
So Ron, you’re allocating more capital to recruitment in 2026 and some good organic growth in the first quarter. Can you just expand on how the recruitment and productivity efforts are faring relative to your expectations? Maybe what specific profile advisor are you more aggressively targeting and having success recruiting? And then how’s the competitive space from the wirehouses or some of your other peers? How’s that impacting recruitment and maybe cost of recruitment?
Ron Kruszewski
Well, I’ll take your second part first. You know, the competitive environment, you know, number a couple of the large firms, you may know some of them yourself, have really, really ramped some of these, the competitive aspects of transitional pay, the so called deals and that has, that’s been interesting. But the quarter across the industry was slower for I think the same reasons that we’re talking about M and A and everything else. It’s just some uncertain times as it relates to us. Our strategy hasn’t changed.
We continue to be disciplined As I said earlier in my remarks that we grow and we’ve grown through acquisition for a number of years and recruitment and our return on tangible equity is 25%. You know, you don’t do that by making investments with an RO return on invested capital of 5%, it just doesn’t work. So I’m very confident. What I mostly pleased about is our ability to compete, attract and recruit large teams, which is relatively, relatively being in the last, say 10 years, you know, new to Stifel and that we have that and we’re talking to a number of large teams and that to me is encouraging.
So, you know, recruiting, recruiting, appeals. You get this question, get this. Every quarter, same question. My answer seems to be the same every quarter.
Mike Brown
Great. Appreciate the color there, Ron.
Ron Kruszewski
Yeah, yeah. I mean, it’s no big news. No, no big news there. In terms of, you know, we’re still, you know, we’re number one in J.D. Power, number one in advise. We have a great culture. We have things, if anything, what we’re trying to do, and we’ve talked about this, it takes a little bit longer. We’re just trying to get our name out there. I get to discouraged sometimes when I’ll talk to people and they say, oh, you know, I didn’t really know, I didn’t know that much about Stifel. And we’re really trying to fix that.
We’ve done that with a lot of our brand advertising and a lot of things we’re trying to get out there. But that’s still an area that we can improve, we will improve and then that will improve our results.
Mike Brown
Great, that makes sense. And just as a follow up, appreciate the color on the advisory side, but I wanted to ask about the IPO window, which has certainly had some stops and starts in 2025 and in 2026. And we’ve had the Middle east volatility this year that seems to have contributed to some delays. But what’s your read on maybe the ECM calendar specifically, as we think about the back half of 2026 for Stifel and in the industry here,
Ron Kruszewski
Look, I think it’s good. I was talking to our desk. This might be dated by a week or so, but you know, what I said was what’s happening? And often when deals get delayed, they just get pulled and they’ll get pulled maybe for the next set of numbers. And we’ve seen delays that are a week or two. So people are. What that told me at the time was that people, clients or issuers and buyers are just concerned about volatility and you know, and the volatility has always impacted ecm and I think that’s the case now.
But when I layer that with the fact that things are just being delayed, you know, maybe for, you know, the next news that comes out of the Middle east or something or next comment. But it’s healthy I think. And now environment changes in a nanosecond, as you know. But as I sit here today, I would say that that’s a healthy market.
Operator
We will take our next question from Steven Chuback with Wolff Research.
Jim Zemlyak
Hello Steven. Good morning
Steven Chubak
Ron and Jim. Hello, how are you?
Jim Zemlyak
Yeah, good morning.
Steven Chubak
So wanted to double click Ron into some of the comments that you made around agentic AI. I know you gave it quite a bit of airplay and you might argue too much airplay during at least at the start of Q and A. But this is perceived to be a pretty meaningful potential source of pressure eventually on Idle sweepcash, whether it’s agentic AI, tokenization, lots of technology that’s in the nascent stages of development and was hoping you could simply speak to the levers you might consider if headwinds to sweepcash do in fact materialize.
And how does your pricing model differ from some of your competitors just in terms of account fees, platform fees that could serve eventually as potential offsets down the road?
Ron Kruszewski
Yeah. Well I read your report this morning and so well thought out. I would tell you that. And the. But again when I put it down, yeah, I didn’t go, I didn’t go, oh my gosh, you know, we got an issue here at Steve. Because we don’t. But as it relates, Stephen, I don’t, I do think that there will be changes. Okay. And there were changes on zero rate commissions and, and one of the leading consultants at the time said there wouldn’t be another commission trade done by 2004 and the robo advisors were going to do this and we’re going to do that.
It’s business model and the business model will adjust. And so if in fact AGENC can come in and be more efficient at sweeping cash, I don’t really see how it’s going to be that much more efficient myself with all of the things that you would have to do. You’d have to actually give something access to everything, not only your recurring expenses but your non recurring and you’re clearing checks and all your credit cards, not just your one single account. And that’s not going to be done for free. And so you’re going to sit there and tell me that you know, because of transactional cash is, has a lower yield that someone’s going to do and pay for that and give all that information, maybe, but it’s a ways away, in my opinion.
And if it does happen, there’s a lot of things that you can do. You know, many banks will raise the yield. In general, there’s a competitive thing just to make sure that the nimble remains. And as it relates to platform fees, which I know you referred to in your report and you just did in your question, you know, platform fees and account fees and inactive account fees, those are all levers. You know, we don’t have an account fee at Stifel, we don’t have an inactive account fee. So those levers are actually unpulled at Stifel today, while many of our competitors do do that.
And so a fair question to me would be, well, why don’t you do it? And my answer is it’s not that easy. Okay. I’m reminded of a commercial we did years ago where the person says, hey, what are all these fees? I have an idea. Why don’t we charge a fee on a fee? And the guy says, that’s a good idea. It’s just as difficult to do. And I’ll be watching. And if the market, if the cost of advice across the industry begins to be consistently with platform fees and done for firms that are trying, that have bigger issues with cash sorting than we do, and you know that, Steven, we’re probably at the low end of your issue of firms that are going to impact it on this.
I think that’s what your report said. So look, we have a lot of levers. We have dealt with changing economics in this business for as long as I’ve been in the business, and we will continue to do so.
Jim Zemlyak
The other thing you have to think about here is the impact on the client. Higher interest income is not just a complete wash based upon the fee. When you think about the tax effect of those things, because the higher interest income is taxable while the fee that they’re paying is not tax deductible. So you have to consider that overall impact on the client as well. When you’re doing your overall thesis here,
Ron Kruszewski
Yeah, I’d be interested when you get your feedback as to the number of firms that will say, oh yeah, it would be easy to institute these fees because I would take the other side of that.
Steven Chubak
I will certainly keep you in the loop and appreciate that perspective. For my follow up just on the restructuring within Europe, I was hoping that you could quantify the benefit to the margins that we’re expecting in the coming year just from shuttering some of the businesses. And was also hoping to get your longer term perspective on how this informs at least your ambitions or appetite to expand outside the US and tying that with just your ma appetite in general, at least in the current environment amid what remains a heightened level of uncertainty.
Ron Kruszewski
That’s a fair question. I’m going to let Jim, I don’t think we can really talk, nor do we disclose margin improvement in that segment. But I’ll lateral that to Jim and let him decide whether he can answer in a moment so you can think about that. Jim but as it relates to our strategy and we have seen margin improvement, what we did and something that we sort of unwound was the fact that we invested in sales, trading and capital markets within Europe and you know, thinking we’ll either be on, you know, the London Exchange or the Nordics and we would do IPOs and we do sales, trading and research over there.
And what we found was that that market, because of MiFID and what they’ve done raised to themselves is that that business, even at scale, I’m not sure you make any really money, but you certainly were not making, we weren’t making any money at the size that we were. But just as importantly was that when I would visit clients in Europe and I would ask them what their objectives were, it was interesting. Most of them, and this is a credit to the United States, their dream was to list on NASDAQ or the New York Stock Exchange.
And I’d say hmm. And we started and we’ve seen this, we just did a, we just did a large transaction European based. We listed it on the U.S. Jim referred to it. And so what we decided to do strategically and it frames or you can frame my thoughts about this is to lead our US capabilities into Europe through advice, our advisory platform. And then when we have an equity capital markets transaction, for the most part they’re coming back to the US Especially in healthcare and in areas where we have some expertise.
So I feel that this was maybe you can criticize the way we started, but where we’re ending up is where we want to be. We’re a global firm, we have global capabilities. I just don’t think we needed to do market making, sales trading in local markets to achieve our ultimate goal and frankly many of the clients ultimate goal, which is to access the US Capital markets. Jim so
Jim Zemlyak
In terms of some numbers to support the question you’re asking here is as we’ve talked about this in prior quarters. We frame this up with a combination of not just the European restructuring but also the sale of SAA. And we’ve told you in the past that’s about $100 million of revenue, probably roughly half and half between the two, you know, the two groups, the SAA as well as the European equities business. You think about it, that was probably somewhere between 70 and 80% comp margin that we’re going to save off of.
And then we talked about 20 to 25 million dollars of non comp expenses. Get you roughly to around a break even number of pulling those revenues out. And that’s a good way to think about it as we look at the, you know, the non comp expenses of what actually occurred. We were able to pull out about $6 million here in the first quarter quarter which is relatively consistent to what our guide was what we talked about. We kind of framed this up last quarter and so all those things are fairly consistent as we look forward.
There’s still more cost to be taken out of some of our European operations post the restructuring. Think of some of the longer term contracts like leases, think of you know, subscription agreements and things like that. So more to come. But as we sit here today, we’ll just caveat that this, you know, this is a pretty good quarter for the international or the non US business given some of the larger fees Iran talked about. It won’t necessarily be linear but it gives you a sense of kind of the overall financial benefit we’ll receive over this entire year.
Ron Kruszewski
And look, you see it in our margins, our margins and institutional. When I was getting questioned about that when it was sub 10% and now it’s nearly 20%. That’s a combination of both productivity and revenue plus the restructuring that we did. So I mean it’s a good thing.
Steven Chubak
It’s great color. And thank you both for the fulsome responses. Really appreciate the perspective.
Ron Kruszewski
Sure. Take care.
Operator
We will take our next question from Brandon Hawken with BMO Capital Markets.
Brandon Hawken
Good morning. Thanks for taking questions. Good
Ron Kruszewski
Morning. Hey Ron, how are you? Yeah, good,
Brandon Hawken
Good. Excellent. So I wanted to touch on nii. You touched a little bit on the headwinds in the quarter. You mentioned corp and based loan headwinds. But you know, maybe could you provide a little bit more texture around what caused that versus your prior expectations and then in the context of the 282 to 290 expected for next quarter, good to see your expectations for that to uplift. But maybe could you provide a Little bit more texture around what’s going to drive that. Thanks.
Ron Kruszewski
I love giving NII and margin questions to Jim and that’s. I’m not, I’m going to do that right now.
Jim Zemlyak
Right. So in terms of this quarter, you know, obviously the non bank NII is the main piece there. If you look at kind of the consolidated Ninja NII numbers and back off what you see in global wealth management, you can compare 1Q year over year and you can see the non banks down about $3 million. So it’s consistent that Delta is consistent with what we described there. Most of that. Some of it’s corporate interest. It wasn’t securities based lending. It was kind of stock, you know, securities lending, stock lending, if you will.
That’s opportunistic based upon individual hard to borrows in your box. That number can move around from period to period. It was just somewhat slower in this individual quarter. We do view that kind of getting back to its normalized run rate. But the bigger piece of the 280-290 million dollars NII guide is going to go back to asset growth within the bank. And we said on the call that we still feel comfortable with up to $4 billion of asset growth.
Devin Ryan
We’re
Jim Zemlyak
Seeing things like fund banking pick back up in April. There was a number of pay downs kind of late in the quarter specific to fund banking that kind of caused the period over period, you know, end of period balances to decline. So as we look forward, we, you know, we feel comfortable. Our original NII guide is, you know, 1.1 to 1.2 billion. We’re already annualizing the low end of that. And we think there’s a fair amount of growth that can occur in the second through fourth quarter that can help support getting, you know, higher in that range.
So we feel pretty good about where we’re at.
Ron Kruszewski
Yeah. And it’s not, it’s not necessarily NIM expansion. It’s just, it’s just growing. It’s just growth. And we’ve, we’ve never, growth’s always there in banking. That’s not the issue. The issue is, you know, prudent growth and that’s what we’re doing. But we see a lot of opportunities. I’ve always, I am still, you know, optimistic about what we’re building in venture and for the innovation economy. And that’s got nice growth written all over it.
Brandon Hawken
Great, thanks for that color. And then you touched on this a little bit, Ron, in your prepared remarks about concerns around the software loans and whatnot. But curious to hear what you’re seeing in the CLO portfolio. So seen spreads widen out in the levered loan market. Equity and lower rated layers of CLOs have been under some pressure recently. So totally appreciate that you’re in the higher layers which have been fine, but you know, what underlying trends are you seeing?
Jim Zemlyak
Yeah, Jim. Yep. So our CLO book at the end of the quarter sat right around $6.8 billion. I’d say a little over 60% or 62% of those holdings are AAA rated with the rest the of AA rated. What we’re seeing in terms of credit enhancement is remain consistent with what we’ve said in prior periods on a blended basis that’s around 32%. You can see AAA classes 36%. And north of there in terms of credit enhancement, aa classes around 24%. The underlying collateral here is very well diversified. There’s no particular concentrations over college, 11, 12, 13% of the underlying portfolio.
Our portfolio is spread out over nearly 100 CLO managers. And I think the key here is that what we see in our stress testing has not changed. We’re not seeing any new issues. We’re seeing consistent levels of the ability to withstand stress that are multiples of the great financial crisis and not break the underlying structure. So we feel very comfortable with the overall credit exposure in terms of clos.
Ron Kruszewski
Yeah. And I look, I’ve always said that Brenda, what people are talking about is the lower rated tranches. You know, that’s really what they’re talking about, as you would expect. But as it relates to diversification, I don’t think there’s any class that’s more than 10%. I think they can’t go more than 15. And every time I look at it, which I think I did in the place first court, I just put it down. It’s not an issue for us. When we look at, we look at individual loan by individual loan across CLO’s and look at it consolidated and individually, our team does a really good job.
But at the AAA where we are at the top and what happens when it gets stressed? Actually the subordination gets higher as stress occurs because you divert cash flows. So what I sometimes ask myself is that, is the yield give up worth the subordination? Sometimes we got a lot of subordination. Remember we don’t get the full yield. We get the, we get the AAA yield and thus far over 10 years risk weighting risk based capital the way that it’s allowed us to sort cash because the variable rate asset, it’s been A great asset class for us and I don’t really see any stress in what we own.
Brandon Hawken
Great. Thanks for taking my questions.
Ron Kruszewski
Yep.
Operator
We will take the next question from Alex Blossing with Goldman Sachs.
Alex Blostein
Hey guys, good morning. Hello. Question. Good to hear you as well. I got almost as enthusiastic a response as you gave to Steve, so I appreciate that. So I wanted to ask you guys a question. Around the bank growth and loan growth, kind of how that comes together. Obviously that’s a priority for the firm for some time. I’m curious how you think about funding that because if we look at the sweep deposit balances, they’ve been basically in a range of, I don’t know, 10, $11 billion for quite some time.
A couple of years even holding the whole AI sweep cash issue aside, as you think about the forward loan growth and without a whole lot of balance sheet sweep options, how do you sort of think about the funding mix here over time? Is that more institutional? Is it more sort of high yield savings? I’m just trying to think about the funding of the bank on the forward.
Ron Kruszewski
Well, first of all, it’s both, but I would have. Geez, Alex, I thought you might have complimented us on our deposit growth. Okay. Relative to our muted loan growth. Okay. In terms of, I think our deposit growth was $2 billion. And what we’re seeing is much of our loan growth and the potential we see is not only self funded, if you will, by deposit generation, but you know, self funded in a multiple of the loans outstanding. So you know, some of those deposits are not sweep. So if you’re focusing on sweep, then we got to go all the way back around the barn and come back and say, you know, transactional cash and clients isn’t going to get that much higher for all the reasons that we’ve been talking about.
But in terms of our smart rate and our venture deposits and our sort of non well deposits, that growth has been very strong. And that’s to then answer your question, that’s how we’re funding that growth. Right.
Jim Zemlyak
If you look at the supplement and you look at page 10, the bottom of page 10 has a disclosure of third party deposits available to Seifel Bancorp. There’s $6.2 billion of excess deposits that are off balance sheet today that we can use to fund that growth. Obviously a good portion of that is going to be in that third party commercial treasury deposit line. So that’s 5.7 billion of it. The vast majority of that’s going to be obviously venture and fund banking. And as you Think about that. That grew $1.2 billion in the first quarter and if you look at that as kind of a mark to market of where we’re at through, I don’t know, as of yesterday, that’s up another $700 million.
So that’s a significant source of funding capacity growth that continues to occur. That’s been fairly consistent. Consistent and gives us a lot of flexibility if we’re talking about up to $4 billion of asset growth.
Ron Kruszewski
And I’ll end by saying, as I’ve said before in this segment of what we’re doing, we’re really in the early innings of some of the things that we can do as we’ve been adding frankly technology capabilities to our treasury platform, international settlements. There’s a lot of work that we’re doing to, to have a very competitive platform and I see the potential. It’s a great question, but again, we’ve said that it’s almost self funding what we’re doing.
Alex Blostein
That’s really helpful. Thanks. Question on the buyback. Really nice to see pick up. I know you guys tend to do a little more in the first quarter than typically over the course of the year. So as you think about your share repurchase plans from here on through the rest of the year, any thoughts you’d share will be helpful. Thank you.
Ron Kruszewski
Capital allocation, capital utilization, return on invested capital, all of those are the inputs to the model that you know, will. We’re always buying back shares. The pace of that math changes daily as well as to what is. That’s why we don’t just sit there and say, oh, you know, we’ll buy X number per day. We, we look at it, we balance that against M and A other opportunities. But we’ve been more consistent because we felt that relative to our growth, our stock’s been undervalued. So you see us buying back our stock, John.
Jim Zemlyak
So Ron touched on the strategy and how we think about it in terms of capacity. We had $560 million of excess capital at the end of the quarter. If you think about what we talked about with the balance sheet growth expectation of up to 4 billion, say we do the full 4 billion. That’s only about 70% of the current excess before retained earnings. So we certainly have fairly material amount of capacity. If the strategic rationale that Ron talked about, if that math works, we can buy back a lot of stock if we’re so inclined.
Alex Blostein
Very well. Thank you guys.
Jim Zemlyak
Hey, thanks Alex.
Operator
We’ll take our next question from Bill Katz with TD Cowan.
Bill Katz
Great, thank you Very much. Most of my big picture questions have been asked already. So maybe just thinking tactically update us on sort of what’s been happening in April just in terms of maybe client engagement, whether it be on the advisory side or on the institutional side and how what the sort of cash levels look like just net of maybe billings and or seasonal tax payments. Thank you.
Ron Kruszewski
Yeah, look, I said client engagement remains strong. It certainly hasn’t. I just said that Bill. And that wasn’t through the quarter. I guess my comments were through this call and it is. I have to caution though because from where I sit the level of uncertainty which we’re not seeing right now, but the things that can change pretty quick, whether it would be on the technology, this methosanthropic thing is concerning. There’s a number of things that can change investor sentiment in perspective very quickly.
And this is one of those environments where there just feels like there’s a lot of uncertainty. But today things are good, engagement is strong. Jim, I don’t know if you comment on cash. Right.
Jim Zemlyak
So if you kind of go bucket by bucket, Sweep is down since quarter end. SmartRate is down since quarter end while treasury deposits are up and provides some details. You’re down probably a billion four in sweep. So call it about 10.6. You’re down about 400 million in smart rate and then again you’re seeing a $700 million increase offsetting some of that in the other treasury deposits. Yeah,
Ron Kruszewski
But you know what, I will just say that. Yeah this is so seasonal right around here. I wonder if we’ve ever had an increase in April. Okay. Ever in cash. It is an outflow for and it’s a lot of tax. That’s just what happens and that’s across the street. So you know, I don’t want those comments to be taken as some, you know, trend. It’s April
Bill Katz
Of course and then as a follow up I’m just sort of curious. You mentioned on the banking side a very good pipeline. But also seems like a lot of this conversation is about just so the ebbs and flows around uncertainty and certainly appreciate one day to the next with the headlines coming out of Middle east is the confounding for everything. Should we be assuming that there’s a little bit of a deceleration here in terms of activity from a revenue perspective given your comments that if some things don’t get sort of booked in the next couple months is more about 2027 just as we think about the pacing for this year versus next for the advisory side of investment banking.
Thank you.
Ron Kruszewski
Look, I think our banking is overall strong. We’re seeing real pockets and our. At least what our guys tell me is, you know, it’s strong. I think we caution a little bit on depository. We’re big in depositories. And so that feels like it’s, you know, lull a little bit. But that can change quickly too. And you know, software and the technology side, which we haven’t been as big at, but we can see when we look at numbers, that appears to be more muted relative to what else is going on. But overall, as I’ve said, if the risks land within the range of market expectations, we see the business improving.
If some of these things get resolved, it could really improve. It’s not just all downside from here. The business, especially in ecm, can really pick up here if we take some of the volatility out of this and uncertainty out of this market. There’s always$, so there’s always uncertainty. It’s just heightened. And we all know this. I’m not telling you any. Anyone on this call. Anything that news from. From my.
Mike Brown
Thank you.
Operator
There are no further questions at this time. I will turn the conference back to Mr. Kraszewski for any additional or closing remarks.
Ron Kruszewski
Well, I would want to compliment all the questions, actually. Very, very robust questions. And we like being able to engage and give you our best answers. And I appreciate, I appreciate everyone’s time and I look forward to talking to you in July. I would just say, who knows what’s going to happen between now and July. But many of you will be talking before then. But to our investors that are on the call, thank you for calling in and have a great day. Thank you.
Operator
This concludes today’s call. Thank you for your participation. You may now disconnect.