<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-9305
STIFEL FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1273600
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
500 N. Broadway, St. Louis, Missouri 63102-2188
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-342-2000
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No
Shares of common stock outstanding at June 30, 1998: 6,774,516,
par value $0.15.
Exhibit Index is on page 15.
<PAGE>2
Stifel Financial Corp. And Subsidiaries
Form 10-Q Index
June 30, 1998
PAGE
PART I. FINANCIAL CONDITION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition --
June 30, 1998 and December 31, 1997 3-4
Consolidated Statements of Operations --
Three Months Ended June 30, 1998 and June 27, 1997 5
Consolidated Statements of Operations --
Six Months Ended June 30, 1998 and June 27, 1997 6
Consolidated Statements of Cash Flows--
Six Months Ended June 30, 1998 and June 27, 1997 7-8
Notes to Consolidated Financial Statements 9-10
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 11-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibit(s) and Report(s) on Form 8-K 15
Signatures 16
<PAGE>3
PART I. FINANCIAL CONDITION
Item 1. Financial Statements (Unaudited)
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED) (In thousands, except par values and share amounts)
June 30, December 31,
1998 1997
------------ ------------
ASSETS
Cash and cash equivalents $ 9,894 $ 15,366
Cash segregated for the exclusive benefit
of customers 180 177
Receivable from brokers and dealers 43,747 35,223
Receivable from customers, net of
allowance for doubtful accounts of
$556 and $556, respectively 222,249 218,301
Securities owned, at fair value 30,799 19,212
Membership in exchanges, at cost 513 513
Office equipment and leasehold
improvements, at cost, net of
allowances for depreciation and
amortization of $11,574 and $10,890,
respectively 4,259 2,227
Goodwill, net of accumulated amortization
of $1,568 and $1,414, respectively 4,027 4,181
Notes receivable from and advances to
officers and employees, net of
allowance for doubtful receivables of
$1,054 and $2,376, respectively 6,454 4,249
Deferred tax asset 3,924 4,577
Other assets 19,174 11,458
--------- ---------
$ 345,220 $ 315,484
========= =========
<PAGE>4
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
(UNAUDITED) (In thousands, except par value and share amounts)
June 30, December 31,
1998 1997
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Short-term borrowings from banks $ 69,600 $ 89,150
Payable to brokers and dealers 135,733 73,708
Payable to customers 32,994 39,239
Securities sold, but not yet purchased, at
fair value 3,508 4,264
Drafts payable 11,512 13,966
Accrued employee compensation 14,827 19,247
Obligations under capital leases 840 522
Accounts payable and accrued expenses 11,753 15,707
Long-term debt 9,970 9,600
--------- ---------
Total Liabilities 290,737 265,403
Stockholders' Equity
Preferred stock -- $1 par value; authorized
3,000,000 shares; none issued
Common stock -- $0.15 par value; authorized
10,000,000 shares; issued 6,776,928
and 6,678,223 shares, respectively 1,016 1,002
Additional paid-in capital 37,470 37,006
Retained earnings 20,269 17,425
--------- ---------
58,755 55,433
Less:
Treasury stock, at cost, 2,412 and
168,648 shares, respectively 28 1,989
Unamortized expense of restricted
stock awards 1,066 185
Unearned employee stock ownership plan
shares, at cost, 236,250 shares 3,178 3,178
--------- ---------
Total Stockholders' Equity 54,483 50,081
--------- ---------
$ 345,220 $ 315,484
See Notes to Consolidated Financial Statements.
<PAGE>5
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended
June 30, June 27,
1998 1997
------------ ------------
REVENUES
Commissions $ 13,982 $ 11,879
Principal transactions 6,006 4,850
Investment banking 3,676 4,028
Interest 5,115 6,002
Other 5,293 3,901
--------- ---------
34,072 30,660
EXPENSES
Employee compensation and benefits 21,239 17,380
Commissions and floor brokerage 701 739
Communications and office supplies 2,121 1,792
Occupancy and equipment rental 2,223 2,195
Interest 2,883 4,132
Other operating expenses 2,805 2,858
--------- ---------
31,972 29,096
--------- ---------
INCOME BEFORE INCOME TAXES 2,100 1,564
Provision for income taxes 876 643
--------- ---------
NET INCOME $ 1,224 $ 921
Net income per share:
Basic $ 0.19 $ 0.19
Diluted $ 0.18 $ 0.16
Dividends declared per share $ 0.03 $ 0.03
Average common equivalent shares
outstanding:
Basic 6,533 4,936
Diluted 6,903 6,605
See Notes to Consolidated Financial Statements.
<PAGE>6
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Six Months Ended
June 30, June 27,
1998 1997
--------- ---------
REVENUES
Commissions $ 27,591 $ 23,299
Principal transactions 15,556 10,117
Investment banking 7,230 11,723
Interest 9,870 10,047
Other 9,664 7,318
--------- ---------
69,911 62,504
EXPENSES
Employee compensation and benefits 43,883 37,595
Commissions and floor brokerage 1,350 1,434
Communications and office supplies 4,086 3,452
Occupancy and equipment rental 4,328 3,921
Interest 5,423 6,483
Other operating expenses 5,324 5,303
--------- ---------
64,394 58,188
--------- ---------
INCOME BEFORE INCOME TAXES 5,517 4,316
Provision for income taxes 2,241 1,748
--------- ---------
NET INCOME $ 3,276 $ 2,568
Net income per share:
Basic $ 0.50 $ 0.52
Diluted $ 0.48 $ 0.43
Dividends declared per share $ 0.06 $ 0.06
Average common equivalent shares
outstanding:
Basic 6,497 4,942
Diluted 6,845 6,597
See Notes to Consolidated Financial Statements.
<PAGE>7
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(In thousands)
Six Months Ended
June 30, June 27,
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,276 $ 2,568
Noncash items included in earnings:
Depreciation and amortization 837 775
Bonus notes amortization 336 578
Deferred items 901 1,160
Restricted stock awards amortization 217 57
--------- ---------
5,567 5,138
(Increase) decrease in assets:
Operating receivables (12,472) (78,295)
Cash segregated for the exclusive
benefit of customers (3) 223
Securities owned (11,587) (1,142)
Notes receivable from officers and
employees (2,541) (444)
Other assets (1,938) 1,449
Increase (decrease) in liabilities:
Operating payables 55,780 31,892
Securities sold, but not yet purchased (756) 278
Drafts payable, accounts payable and
accrued expenses, and accrued
employee compensation (11,076) (6,196)
--------- ---------
Cash Provided By (Used For)
Operating Activities $ 20,974 $ (47,097)
========= =========
See Notes to Consolidated Financial Statements.
<PAGE>8
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)(In thousands)
Six Months Ended
June 30, June 27,
1998 1997
--------- ---------
Cash Provided By (Used For) Operating
Activities - from previous page $ 20,974 $ (47,097)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of office equipment - - 3
Sale of investments 51 - -
Payments for:
Acquisition of office equipment and
leasehold improvements (2,221) (571)
Acquisition of investments (5,828) (798)
--------- ---------
Cash Used For Investing Activities (7,998) (1,366)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term borrowings, net (19,550) 48,175
Proceeds from:
Issuance of stock 1,397 783
Temporary subordinated debt - - 8,000
Issuance of Long-term debt 370 - -
Payments for:
Repurchase of stock (86) (1,110)
Temporary subordinated debt - - (8,000)
Principal payments under capital
lease obligation (177) (208)
Cash dividends (402) (284)
--------- ---------
Cash (Used For) Provided By
Financing Activities (18,448) 47,356
--------- ---------
Decrease in cash and cash equivalents (5,472) (1,107)
Cash and cash equivalents -
beginning of period 15,366 7,960
--------- ---------
Cash and Cash Equivalents-end of period $ 9,894 $ 6,853
========= =========
Supplemental disclosure of cash flow
information:
Income tax payments $ 3,867 $ 1,864
Interest payments $ 5,238 $ 5,866
Schedule of noncash investing and
financing activities:
Fixed assets acquired under
capital lease $ 495 $ 292
Employee stock ownership plan - - $ 287
Restricted stock awards, net of
forfeitures $ 1,015 - -
Stock dividend distributable $ 30 - -
See Notes to Consolidated Financial Statements.
<PAGE>9
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The consolidated financial statements include the accounts of
Stifel Financial Corp. and its subsidiaries (collectively
referred to as "the Company"). The accompanying unaudited
consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results
for the six months ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1998. For further information, refer to the
financial statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1997.
Where appropriate, prior years' financial information has been
reclassified to conform with the current year presentation.
NOTE B - NET CAPITAL REQUIREMENT
The Company's principal subsidiary, Stifel, Nicolaus &
Company, Incorporated ("SN & Co."), is subject to the Uniform Net
Capital Rule 15c3-1 under the Securities Exchange Act of 1934
(the "rule"), which requires the maintenance of minimum net
capital, as defined. SN & Co. has elected to use the alternative
method permitted by the rule which requires maintenance of
minimum net capital equal to the greater of $250,000 or 2 percent
of aggregate debit items arising from customer transactions, as
defined. The rule also provides that equity capital may not be
withdrawn or cash dividends paid if resulting net capital would
be less than 5 percent of aggregate debit items.
At June 30, 1998, SN & Co. had net capital of $29,130,000
which was 11.00% of its aggregate debit items and $23,834,000 in
excess of the minimum required net capital.
NOTE C - RECENT ACCOUNTING PRONOUNCEMENTS
As of January 1, 1997, the Company adopted the original
provisions of SFAS No.125, which was effective for transfers of
financial assets made after December 31, 1996, except for
transfers of certain financial assets for which the effective
date had been delayed for one year. The Company adopted the
delayed Provision in 1998. SFAS No. 125 provides financial
reporting standards for the derecognition and recognition of
financial assets, including the distinction between transfers of
financial assets which should be recorded as sales and those
which should be recorded as secured borrowings. The adoption of
the provisions of SFAS No. 125 had no material effect on the
Company's financial condition or results of operations.
<PAGE>10
SFAS No.130 "Reporting Comprehensive Income" became effective
for companies whose fiscal year began after December 15, 1997.
SFAS 130 establishes standards for the display of comprehensive
income. The Company has no reportable items to be included in
comprehensive income and therefore comprehensive income and net
income are the same.
NOTE D - EARNINGS PER SHARE
During 1997, the Company adopted SFAS 128. The following table
reflects a reconciliation between Basic EPS and Diluted EPS.
<TABLE>
<CAPTION>
Three Months Ended June 30, 1998 June 27, 1997
- -----------------------------------------------------------------------------------------------------------
(In thousands,except Income Shares Per Share Income Shares Per Share
per share amounts) (Numerator) Denominator Amount (Numerator) (Denominator) Amount
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings Per Share
Income available to
shareholders $1,224 6,533 $0.19 $921 4,936 $0.19
- -----------------------------------------------------------------------------------------------------------
Diluted Earnings Per Share
Effect of Dilutive Securities:
Options, ESPP, and
deferred compensation - - 370 - - 180
Convertible debt - - - - 129 1,489
Income available to
common stockholders
and assumed conversions $1,224 6,903 $0.18 $1,050 6,605 $0.16
- -----------------------------------------------------------------------------------------------------------
Six Months Ended June 30, 1998 June 27, 1997
- -----------------------------------------------------------------------------------------------------------
(In thousands,except Income Shares Per Share Income Shares Per Share
per share amounts) (Numerator) Denominator Amount (Numerator) (Denominator) Amount
Basic Earnings Per Share
Income available to
shareholders $3,276 6,497 $0.50 $2,568 4,942 $0.52
Diluted Earnings Per Share
Effect of Dilutive Securities:
Options, ESPP, and
deferred compensation - - 348 - - 166
Convertible debt - - - - 257 1,489
Income available to
common stockholders
and assumed conversions $3,276 6,845 $0.48 $2,825 6,597 $0.43
- -----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE E - SUBSEQUENT EVENT
On July 23, 1998, the Company's Board of Directors declared a
regular quarterly cash dividend of $0.03 per share, payable on
August 20, 1998 to stockholders of record August 6, 1998.
******
<PAGE>11
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Results of Operations
Three months ended June 1998 and June 1997
The Company recorded net earnings of $1.2 million or $0.18 per
diluted share on total revenues of $34.0 million for the second
quarter ended June 30,1998 compared to net earnings of $921,000
or $0.16 per diluted share on revenues of $30.7 million recorded
for the same period one year earlier.
Revenue from commissions increased $2.1 million (18%) to $14.0
million, principally due to increased investment executive
production. Main components of the increase were from sales of
mutual funds - up $1.1 million (44%); listed equity securities -
up $372,000 (13%); over-the-counter equity securities - up
$417,000 (9%); and insurance - up $284,000 (25%).
Principal transaction revenues are primarily derived from the
sale of over-the-counter and fixed income securities.
Inventories of these securities are maintained to meet client
needs. Realized and unrealized gains and losses that result from
holding and trading these securities are included in principal
transactions. Revenues from principal transactions increased
$1.1 million (24%) to $6.0 million. The increase resulted
primarily from higher sales of these products.
Other revenues increased $1.4 million (36%) to $5.3 million.
Main components of the increase resulted from increases in fee
revenues from investment advisory and management services - up
$653,000 (43%); customer service fees - up $361,000 (29%); and
increases in gains on various investments held by the Company -
up $435,000 (257%).
Total expenses increased $2.9 million (10%) to $32 million
principally as a result of increased compensation and benefits
offset by a decrease in interest expense.
Compensation and benefits, a significant portion of the
Company's total expense, rose $3.9 million (22%) in the second
quarter of 1998. A majority of the increase resulted from
compensation that is variable in nature and grew in conjunction
with the increases in revenues and profitability. This variable
component increased $2.9 million (24%) compared to last year's
second quarter. The fixed component of compensation, principally
salaries, increased $1.0 million (19%) as a result of normal year-
to-year salary increases and the addition of approximately 60 non-
sales associates since June of 1997. Growth occurred in key
areas such as Equity Capital Markets and Investment Services,
foundations for the Company's overall growth plans.
Communications and Supplies increased $329,000 (18%) to $2.1
million, primarily as a result of costs associated with
improvements in communications technology and increased activity
in the printing of sales materials.
<PAGE>12
Interest expense declined $1.2 million (30.2%) due to
decreased borrowings by the company to finance customers margin
accounts.
Six months ended June 1998 and June 1997
The Company recorded net earnings of $3.3 million or $0.48 per
diluted share on revenues of $70.0 million for the six months
ended June 30, 1998 compared to $2.6 million or $0.43 per diluted
share on revenues of $62.5 million for same period one year
earlier.
The increase in net earnings for the first six months of 1998
over the first six months of 1997 is attributed primarily to the
increase in revenues. Total revenues increased $7.4 million
(12%) as retail investor activity remained strong coupled with
increased investment executive production.
Commission revenue increased $4.3 million (18%) principally
due to increased investment executive production. Main components
of the increase were from sales of mutual funds - up $2.1 million
(39%); listed equity securities - up $905,000 (16%); over-the-
counter equity securities - up $833,000 (9%); and insurance - up
$505,000 (28%).
Principal transaction revenues increased $5.4 million (54%)
principally due to revenue derived from the underwriting of a
unit investment trust (trust) by Stifel Nicolaus & Company,
Incorporated in the first quarter of 1998. The trust consisted
of a portfolio of common stocks issued by financial institutions
with operations mainly in the Midwest.
Investment banking revenue decreased $4.5 million (38%) for
the first six months of 1998 compared to the previous year's
first six months. The decrease can be attributed to fewer
underwritings of Trust Preferred and mortgage Real Estate
Investment Trust (REIT) transactions. Last year's first half was
especially strong as $6.4 million of revenue was generated from
these transactions, most of which occurred in the first quarter.
Other revenues increased $2.3 million (32%) for the first six
months of 1998. Main components of the increase resulted from
increases in fee revenues from investment advisory and managed
account services - up $1.1 million (40%); customer service fees -
up $648,000 (31%); and increases in gains on various investments
held by the Company - up $631,000 (327%).
Total expenses increased $6.2 million (11%) for the first half
of 1998 over the previous year's first half principally due to
increased compensation and benefits.
<PAGE>13
Compensation and benefits increased $6.3 million (17%) in the
first six months of 1998 over the same period one year earlier.
A majority of the increase resulted from compensation that is
variable in nature and grew in conjunction with the increases in
revenues and profitability. This variable component increased
$4.6 million (17%) compared to last year's first half. The fixed
component of compensation, principally salaries, increased $1.7
million (18%) for the same reasons described in the three months
results.
Communications and supplies increased $634,000 (18%) as a
result of costs associated with improvements in communications
technology and increased activity in the printing of sales and
promotional materials.
Interest expense declined $1.1 million (16%) primarily as a
result of decreased customer borrowings.
Year 2000
The Year 2000 issue is the result of computer programs
currently written in a two-digit format rather than four digits
to define the applicable year and therefore affecting the ability
of computer systems to accurately process dates ending after
December 31, 1999. The Company continues to review its computer
systems and programs to prepare for the Year 2000 compliance.
Such review includes internal and third party software: and more
significantly, service providers' computer systems. A significant
portion of the Company's internal programs are already year 2000
compliant.
The Company's brokerage securities processing system is
provided by a leading industry vendor. The Company has contacted
and continues to cloesly monitor the implementation plans of the
vendor. The vendor has completed a significant portion of its
plans and expects to begin user testing in the fall of 1998.
The Company believes that the incremental costs associated
with modifications for internal software and systems will not be
material to the Company's financial statements. However, the
Company could be adversely affected if other organizations,
including the vendor mentioned above, are unsuccessful in
completing the required Year 2000 system modifications.
Liquidity and Capital Resources
The Company's assets are highly liquid, consisting mainly of
cash or assets readily convertible into cash. These assets are
financed primarily by the Company's equity capital, customer
credit balances, short-term bank loans, proceeds from securities
lending, long term notes payable, and other payables. Changes in
securities market volumes, related customer borrowing demands,
underwriting activity, and levels of securities inventory affect
the amount of the Company's financing requirements.
Management believes the funds from operations, available
informal short-term credit arrangements, and long-term
borrowings, at June 30, 1998, will provide sufficient resources
to meet the present and anticipated financing needs.
<PAGE>14
Stifel, Nicolaus & Company, Incorporated, the Company's
principal broker-dealer subsidiary, is subject to certain
requirements of the Securities and Exchange Commission with
regard to liquidity and capital requirements. At June 30, 1998,
Stifel, Nicolaus had net capital of approximately $29.1 million
which exceeded the minimum net capital requirements by
approximately $23.8 million.
<PAGE>15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On August 7, 1998 the United States Tenth Circuit
Court of Appeals affirmed the previous ruling by the United
States District Court for the Western District of Oklahoma, to
dismiss the State of Oklahoma suit against the Company seeking $
7.6 million in compensatory damages and that these damages be
trebled. The State of Oklahoma suit alleged that the Company and
two former executives of the Company committed violations of the
Racketeer Influenced and Corrupt Organizations Act.
There were no other material changes in the legal
proceedings previously reported in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997. Such information
is hereby incorporated by reference.
Item 6. Exhibit(s) and Report(s) on Form 8-K
(a) Exhibit No.
(Reference to Item 601(b)
of Regulation S-K) Description
- -----------------------------------------------------------------
27 Financial Data Schedule
(furnished to the Securities and Exchange
Commission for Electronic Data
Gathering, Analysis, and Retrieval
[EDGAR] purposes only)
(b) Report(s) on Form 8-K
There were no reports on Form 8-K filed during the quarter
ended June 30, 1998.
<PAGE>16
SIGNATURES
Pursuant to the requirement of Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
STIFEL FINANCIAL CORP.
(Registrant)
Date:August 14,1998 By /s/Ronald J. Kruszewski
Ronald J. Kruszewski
(President and
Chief Executive Officer)
Date:August 14,1998 By /s/ Stephen J. Bushmann
Stephen J. Bushmann
(Principal Financial and
Accounting Officer)
<PAGE>17
STIFEL FINANCIAL CORP. AND SUBSIDIARIES
EXHIBIT INDEX
June 30, 1998
Exhibit
Number Description
- -----------------------------------------------------------------
27 Financial Data Schedule
(furnished to the Securities and Exchange
Commission for Electronic Data
Gathering, Analysis, and Retrieval
[EDGAR] purposes only)
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION DATED JUNE 30, 1998 AND THE
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 10,074
<RECEIVABLES> 240,562
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 31,888
<INSTRUMENTS-OWNED> 30,799
<PP&E> 4,259
<TOTAL-ASSETS> 345,220
<SHORT-TERM> 69,600
<PAYABLES> 74,736
<REPOS-SOLD> 0
<SECURITIES-LOANED> 132,923
<INSTRUMENTS-SOLD> 3,508
<LONG-TERM> 9,970
<COMMON> 1,016
0
0
<OTHER-SE> 53,467
<TOTAL-LIABILITY-AND-EQUITY> 345,220
<TRADING-REVENUE> 15,556
<INTEREST-DIVIDENDS> 9,870
<COMMISSIONS> 27,591
<INVESTMENT-BANKING-REVENUES> 7,230
<FEE-REVENUE> 1,686
<INTEREST-EXPENSE> 5,423
<COMPENSATION> 43,883
<INCOME-PRETAX> 5,517
<INCOME-PRE-EXTRAORDINARY> 5,517
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,276
<EPS-PRIMARY> .50
<EPS-DILUTED> .48
</TABLE>
