Stifel Financial Corp. saw an 11% profit increase in the first quarter in what shaped up to be its second best quarter on record for net revenue, net income and diluted earnings per share, though the firm still has a cautious outlook for the rest of the year.

Stifel’s net income for the first quarter totaled $34.8 million, or 55 cents per share, up 10.7% from $31.4 million, or 50 cents per share, in the first quarter of 2011, the firm said in its earnings release on Wednesday. Net income rose 28.7% from $27 million, or 43 cents per share, for the fourth quarter.

Net revenue for the first three months of the year totaled $400.3 million, up 9.2% from $366.6 million for the first quarter of 2011 and a 12.2% increase from $356.9 million for the fourth quarter.

“The overall improvement in the economy positively impacted both our Global Wealth Management and Institutional Group’s businesses during the quarter, particularly in investment banking and fixed income trading,” Stifel Financial Chairman, President and Chief Executive Ronald J. Kruszewski said in a statement. “During the quarter, we continued to expand our retail platform as a result of successful recruiting of financial advisors.”

Improved market conditions for the first quarter came as investor confidence and risk taking improved, combined with less volatility and better equity market performance, according to Kruszewski.

“Outside of a major event or catalyst to move the markets, we remain cautious on the outlook for the rest of the year,” Kruszewski said.

Stifel’s Global Wealth Management unit came in with $69.2 million in pre-tax operating income for the first quarter, up 12.5% from $61.5 million for the first quarter of 2011 and a 10% increase from $62.9 million last quarter.

The wealth management unit’s net revenue totaled $248.3 million in the first quarter, a 4.2% gain from $238.4 million for the first quarter of last year and a 10.6% rise from $224.6 million in the fourth quarter.

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