<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
Commission file number 0-14199
ALEX. BROWN INCORPORATED
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Maryland 52-1434118
_______________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
135 E. Baltimore St., Baltimore, MD
21202
_______________________________________________________________________________
(Address of principal executive offices)
(Zip code)
(410) 727-1700
_______________________________________________________________________________
(Registrant's telephone number, including area code)
______________________________________________________________________________
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.10 par value 16,128,565
- -------------------------------------------------------------------------------
(Class) (Outstanding at April 29, 1996)
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
INDEX
Page
Part I - Financial Information
Consolidated Statements of Earnings (Unaudited) for the
three months ended March 31, 1996 and 1995 1
Consolidated Statements of Financial Condition as of
March 31, 1996 (Unaudited) and December 31, 1995 2-3
Consolidated Statements of Stockholders' Equity
(Unaudited) for the three months ended
March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows (Unaudited)
for the three months ended March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements (Unaudited) 6-7
Management's Discussion and Analysis of Results of
Operations and Financial Condition 8-10
Part II - Other Information 11
Signatures 12
Exhibit -
(11) Calculation of Earnings Per Share (Unaudited) 13
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Earnings
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
1996 1995
--------- --------
Revenues:
<S> <C> <C>
Commissions $ 52,005 $ 39,619
Investment banking 101,838 39,854
Principal transactions 52,365 28,917
Interest and dividends 33,735 21,146
Advisory and other 30,897 21,800
--------- ---------
Total revenues 270,840 151,336
--------- ---------
Operating expenses:
Compensation and benefits 145,575 82,245
Communications 8,642 7,249
Occupancy and equipment 8,763 8,503
Interest 12,185 6,779
Floor brokerage, exchange
and clearing fees 4,943 4,197
Other operating expenses 23,466 15,026
--------- ---------
Total operating expenses 203,574 123,999
--------- ---------
Earnings before income taxes 67,266 27,337
Income taxes 26,570 10,935
--------- ---------
Net earnings $ 40,696 $ 16,402
========= =========
Earnings per share:
Primary $ 2.51 $ 1.10
========= =========
Fully diluted $ 2.21 $ 0.96
========= =========
Weighted average number of shares outstanding:
Primary 16,210 14,940
========= =========
Fully diluted 18,673 17,583
========= =========
Cash dividends declared per share $ 0.20 $ 0.175
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
1
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Financial Condition
(in thousands)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 18,158 $ 62,103
Receivables:
Customers 1,270,588 1,277,869
Brokers, dealers and clearing organizations 572,938 416,449
Other 61,530 62,056
Firm trading securities (Note 2) 167,148 110,564
Securities purchased under agreements to resell 28,250 34,865
Deferred income taxes 29,370 27,813
Memberships in exchanges, at cost
(market $3,360 and $2,864) 323 323
Office equipment and leasehold improvements,
at cost less accumulated depreciation and
amortization of $42,931 and $40,483 36,908 41,189
Investment securities (Note 5) 51,363 50,294
Loans to employees to purchase convertible
subordinated debentures (Note 4) 49,939 48,320
Other assets 86,994 64,662
---------- ----------
$2,373,509 $2,196,507
</TABLE>
========== ==========
(continued)
2
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Financial Condition (continued)
(in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C> <C> <C>
Bank loans $ 191,012 $ 120,008
Payables:
Cash management facility 83,677 70,338
Customers, including free credit balances 440,343 506,993
Brokers, dealers and clearing organizations 636,726 480,621
Current federal and state income taxes 12,969 5,032
Other 235,062 294,643
Securities sold, not yet purchased (Note 2) 49,210 54,276
Securities sold under repurchase agreements - 2,460
7 5/8% Senior notes (Note 4) 109,429 109,414
5 3/4% Convertible subordinated debentures 11,856 11,851
Employee convertible subordinated debentures (Note 4) 57,545 51,584
Commitments and contingencies (Note 6)
Stockholders' equity (Note 4):
Common stock of $.10 par value
Authorized 50,000,000 shares
Issued and outstanding 16,080,246 shares in 1996
and 15,532,696 shares in 1995 1,608 1,553
Additional paid-in capital 31,007 114,011
Loans to employees to purchase common stock (10,649) (12,470)
Retained earnings 423,714 386,193
---------- ----------
Total stockholders' equity 545,680 489,287
---------- ----------
$2,373,509 $2,196,507
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Loans To
Employees
Additional To Purchase Total
Common Paid-in Common Retained Stockholders'
Stock Capital Stock Earnings Equity
------ -------- ------- --------- ------------
Three months ended March 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $1,553 $114,011 $(12,470) $386,193 $489,287
Net earnings - - - 40,696 40,696
Issuance of 375,808 shares of
common stock 38 10,005 - - 10,043
Payments on employee loans - - 1,821 - 1,821
Repurchase and retirement of
1,934 shares of common stock - (79) - - (79)
Compensation payable
in common stock 17 7,070 - - 7,087
Dividends paid - - - (3,175) (3,175)
------- --------- --------- --------- --------
Balance at March 31, 1996 $1,608 $131,007 $(10,649) $423,714 $545,680
======= ========= ========= ========= ========
Three months ended March 31, 1995
Balance at December 31, 1994 $1,429 $ 81,042 $(11,011) $301,968 $373,428
Net earnings - - - 16,402 16,402
Issuance of 447,256 shares of
common stock 45 10,080 (433) - 9,692
Payments on employee loans - - 525 - 525
Repurchase and retirement of
6,025 shares of common stock (1) (180) - - (181)
Compensation payable
in common stock 13 4,162 - - 4,175
Loan forgiveness - - 36 - 36
Dividends paid - - - (2,556) (2,556)
------- -------- --------- --------- ----------
Balance at March 31, 1995 $1,486 $95,104 $(10,883) $315,814 $401,521
======= ======== ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
</PAGE>
4
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
1996 1995
---------- ----------
Cash flows from operating activities:
<S> <C> <C>
Net earnings $ 40,696 $ 16,402
Reconciliation of net earnings to net cash
used for operating activities:
Depreciation and amortization 3,166 2,667
Non-cash compensation expense 10,037 6,795
Gain on investment securities (5,405) (5,271)
Other (66) (9)
(Increase) decrease in assets:
Receivables (142,953) 3,841
Firm trading securities (56,584) (20,791)
Deferred income taxes (1,557) 4
Securities purchased under agreements to resell 6,615 (3,032)
Other assets (22,515) (21,768)
Increase (decrease) in liabilities:
Payables 37,811 (5,798)
Securities sold, not yet purchased (5,066) 382
---------- ---------
Net cash used for operating activities (135,821) (26,578)
---------- ----------
Cash flows from financing activities:
Net proceeds (payments):
Short-term loans 73,000 35,246
Securities sold under repurchase agreements (2,460) 0
Cash management facility 13,339 2,475
Payments on term loans (1,996) (2,383)
Issuance of common stock 10,501 9,621
Repurchase of common stock (79) (181)
Dividends paid to stockholders (3,175) (2,556)
---------- ---------
Net cash provided by financing activities 89,130 42,222
---------- ---------
Cash flows from investing activities:
Purchase of office equipment and leasehold
improvements (1,590) (4,841)
Purchase of investment securities (6,247) (5,401)
Sale of investment securities 10,583 4,289
---------- ---------
Net cash provided by (used for) investing activities 2,746 (5,953)
---------- ---------
Net icrease (decrease) in cash and cash equivalents (43,945) 9,691
Cash and cash equivalents at beginning of period 62,103 24,024
---------- ---------
Cash and cash equivalents at end of period $ 18,158 $ 33,715
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
</PAGE>
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1996
(Unaudited)
(1) The accompanying consolidated financial statements do not include
all of the information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles. In the opinion of management, all
adjustments considered necessary to fairly reflect Alex. Brown
Incorporated's (the "Company") financial position and results of
operations, consisting of normal recurring adjustments, have been
included. Certain revenue and expense items in 1995 have been
reclassified to conform to the current year presentation.
(2) Firm trading securities and securities sold, not yet purchased
consisted of the following (in thousands):
<TABLE>
<CAPTION>
Long Short
03/31/96 12/31/95 03/31/96 12/31/95
--------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
United States government
and agencies $ 10,572 $ 9,315 $28,608 $34,958
Mortgage-backed 16,327 1 - -
States and municipalities 70,653 36,607 567 67
Corporate debt 25,396 42,945 504 5,593
Equities and convertible debt 44,200 21,696 19,531 13,658
-------- -------- ------- -------
$167,148 $110,564 $49,210 $54,276
======== ======== ======= =======
</TABLE>
(3) In April, 1996, the Company declared a $.20 quarterly cash dividend payable
May 8, 1996 to stockholders of record on April 29, 1996.
(4) In August, 1995, the Company issued $110,000,000 senior notes due
August 15, 2005, which bear interest at 7 5/8%. The notes were sold at
a discount to yield 7.705%.
During 1996, the Company issued $7,820,000 convertible subordinated
debentures to certain employees pursuant to the 1991 Equity Incentive
Plan. The debentures are convertible into the Company's common stock
three years after the date issued. The Company made loans to
employees to fund the purchases of the debentures. During the first
three months of 1996, employees converted $1,310,456 convertible
subordinated debentures, which were issued in prior years, into
78,923 shares of the Company's common stock.
(5) Investment securities at March 31, 1996 and December 31, 1995
included $23.1 million and $23.5 million, respectively, of
merchant banking investments.
</PAGE>
6
<PAGE>
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
March 31, 1996
(Unaudited)
(6) COMMITMENTS AND CONTINGENCIES
Letters of Credit
At March 31, 1996, the Company's principal subsidiary, Alex. Brown & Sons
Incorporated, was contingently liable for up to $47.0 million under
unsecured letters of credit used to satisfy required margin deposits
at five securities clearing corporations.
Litigation
In the course of its investment banking and securities brokerage
business, Alex. Brown & Sons Incorporated has been named a
defendant in a number of lawsuits and may be required to contribute
to final settlements in actions, in which it has not been named a
defendant, arising out of its participation in the underwritings of
certain issues. A substantial settlement or judgment in any of
these cases could have a material adverse effect on the Company.
Although the ultimate outcome of such litigation is not subject to
determination at present, in the opinion of management, after
consultation with counsel, the resolution of these matters will not
have a material adverse effect on the Company's consolidated
financial statements.
7
</PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Alex. Brown Incorporated (the "Company") is a holding company whose
primary subsidiary is Alex. Brown & Sons Incorporated ("Alex. Brown"),
a major investment banking and securities brokerage firm. The Company,
like other securities firms, is directly affected by general economic
and market conditions, including fluctuations in volume and price
levels of securities, changes in interest rates and demand for
investment banking and securities brokerage services, all of which have
an impact on the Company's revenues as well as its liquidity.
Substantial fluctuations can occur in the Company's revenues and net
earnings due to these and other factors.
In periods of reduced market activity, profitability is likely to be
adversely affected because certain expenses, consisting primarily of
salaries and benefits, communications and occupancy expenses, remain
relatively fixed. Accordingly, net earnings for any period should not
be considered representative of any other period.
RESULTS OF OPERATIONS
First Quarter 1996 Compared to First Quarter 1995
Revenues totalled $270.8 million, a 79% increase as compared to $151.3
million in the first quarter of 1995. Commission revenues increased
31% to $52.0 million for the quarter, primarily as a result of
increased private client and institutional listed commissions.
Investment banking revenues increased 156% to $101.8 million, primarily
due to significant increases in revenues from underwriting activities
and a 96% increased in merger and advisory revenues to $30.2 million.
Principal transaction revenues increased 81% to $52.4 million,
primarily due to increases in revenues from OTC trading. Interest and
dividend revenues increased 60% to $33.7 million as a result of higher
margin loan balances. Advisory and other revenues increased 42% to
$30.9 million, primarily due to increases in advisory fees and
correspondent services revenues. Investment gains totalled $5.4
million for the quarter.
Operating expenses totalled $203.6 million, a 64% increase as compared
to $124.0 million in the first quarter of 1995. Compensation and
benefits increased 77% to $145.6 million from $82.2 million as a result
of increased incentive and commission expenses. Communications expense
increased 19% to $8.6 million, due to expenses required to support
increased levels of business activity. Occupancy and equipment
expenses increased 3% to $8.8 million, as a result of expansion in
several offices and increased technology expenditures. Interest
expense increased 80% to $12.2 million from $6.8 million, primarily due
to the cost of financing increased margin loan balances. Floor
brokerage, exchange and clearing fees increased 18% to $4.9 million,
resultant from an increased volume of listed trades. Other operating
expenses increased 56% to $23.5 million, primarily due to increased
expenses associated with the higher level of business activity.
The Company's effective tax rate for the quarter was 39.5%, compared to
40.0% for the first quarter of 1995.
As a result of the above, net earnings increased by 148% to $40.7
million from $16.4 million in the first quarter of 1995. Primary and
fully diluted earnings per share were $2.51 and $2.21, respectively, as
compared to $1.10 and $0.96 for the same period in the prior year.
8
</PAGE>
<PAGE>
The weighted average number of shares outstanding for purposes of
calculating earnings per share includes shares related to outstanding
dilutive stock options and is affected by the market price of the
Company's Common Stock. Additionally, the calculation of fully diluted
earnings per share assumes the conversion into Common Stock of the
Company's outstanding convertible subordinated debt, if dilutive. The
combination of these factors can result in lower rates of increase or
higher rates of decrease in earnings per share as compared to the
rates of increase or decrease in net earnings.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated statement of financial condition reflects a
liquid financial position. The majority of the securities (both long
and short) in Alex. Brown's trading accounts are readily marketable and
actively traded. Customer receivables include margin balances and
amounts due on uncompleted transactions. Receivables from other
brokers and dealers generally represent either current open
transactions, which usually settle within a few days, or securities
borrowed transactions which normally can be closed out within a few
days. Most of the Company's receivables are secured by marketable
securities. The Company also has investments in fixed assets and
illiquid securities but such investments are not a significant portion
of the Company's total assets.
High yield securities, also referred to as "junk" bonds, are non-
investment grade debt securities which are rated by Standard & Poor's
as lower than BBB- and by Moody's Investors Service as lower than Baa3.
The market for high yield securities can be extremely volatile and many
experienced significant declines in the past several years. At March
31, 1996, in its high yield operations, Alex. Brown had $13.3 million
of long inventory and $.2 million of short inventory as compared to
$12.9 million of long inventory and $.6 million of short inventory at
year-end 1995.
As of March 31, 1996, the carrying value of the Company's merchant
banking investments was $23.1 million, compared to $23.5 million at
year-end 1995. Gains related to merchant banking investments were $2.1
million for the first three months of 1996, due to increases in the
carrying value of investments and realized gains. It is anticipated
that merchant banking investments will generally have a holding period
of three years or more and will be funded with existing sources of
working capital. The Company has no outstanding bridge loans.
From time to time the Company makes subordinated loans to
correspondents as part of its Correspondent Services business. These
loans may be secured or unsecured and are funded through general
working capital sources. At March 31, 1996, $3.0 million of such loans
were outstanding.
The Company finances its business through a number of sources,
consisting primarily of paid-in capital, funds generated from
operations, free credit balances in customers' accounts, deposits
received on securities loaned, repurchase agreements and bank loans, as
well as through the issuance of debt and equity securities.
The Company borrows from banks on a short-term basis both on an
unsecured basis and under arrangements pursuant to which the amount of
funds available is based on the value of the securities owned by the
Company and customers' margin securities pledged as collateral. In
addition, the Company borrows on a long-term basis from banks on both
an unsecured basis and with fixed assets pledged as collateral
("term loans"). The Company historically has been able to obtain
necessary bank borrowings and believes that it will continue to be able
to do so in the future. The Company has $350 million of unused committed
9
</PAGE>
<PAGE>
lines of credit under revolving credit agreements (the "Credit Facilities")
with various banks. The Credit Facilities expire between August 1996 and
March 1999. The Credit Facilities and term loans contain various restrictive
financial covenants, the most significant of which require the maintenance of
minimum levels of net worth by both the Company and Alex. Brown and minimum
levels of net capital by Alex. Brown. There were no outstanding borrowings
under the Credit Facilities at March 31, 1996. At March 31, 1996, the Company
and Alex. Brown were in compliance with all restrictive covenants contained in
the Credit Facilities and term loans.
Alex. Brown is required to comply with the net capital rule of the
Securities and Exchange Commission. The Company's ability to withdraw
capital from Alex. Brown may be limited by the rule. Alex. Brown has
consistently exceeded minimum net capital requirements under the rule.
At March 31, 1996, Alex. Brown had aggregate net capital of $365.6
million, which exceeded its minimum net capital requirement by $336.2
million.
During the first three months of 1996, the Company repurchased a total
of 1,934 shares of its Common Stock at a cost of $79,253. As of April
1996, the Company had a remaining repurchase authorization of
approximately 1.4 million shares. The Company anticipates that,
subject to market conditions, it will make additional repurchases in
the future.
Management of the Company believes that existing capital and credit
facilities, when combined with funds generated from operations, will
provide the Company with sufficient resources to meet its present and
reasonably foreseeable cash and capital needs.
RISK MANAGEMENT
The Company records securities transactions on a settlement date
basis, generally the third business day following the trade execution.
The risk of loss on unsettled transactions relates to customers' or
brokers' inability or refusal to meet the terms of their contracts.
The Company monitors its exposure to market and counterparty risk
through a variety of financial, position and credit exposure reporting
and control procedures. The Risk Management, Credit and Investment
Committees, each of which meets on a regular basis, include members of
senior management. Each trading department is subject to internal
position limits established by the Risk Management Committee which
also reviews positions and results of the trading departments. Alex.
Brown's Credit Committee establishes and reviews appropriate credit
limits for customers and brokers seeking margin, repurchase and
reverse repurchase agreement facilities and securities borrowed and
securities loaned arrangements. The Investment Committee approves
investment purchases and sales and reviews holdings.
INFLATION
Because the Company's assets are, to a large extent, liquid in nature,
they are not significantly affected by inflation. However, the rate
of inflation affects the Company's expenses such as employee
compensation, office space leasing costs and communication charges,
and increases therein may not be readily recoverable in the price of
services offered by the Company. To the extent inflation results in rising
interest rates and has other adverse effects upon the securities markets and
on the value of securities owned by the Company, it may adversely affect the
Company's financial position and results of operations.
10
</PAGE>
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
None.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re: Calculation of Earnings Per Share
(b) No reports on Form 8-K were filed during the quarter ended March
31, 1996.
11
</PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ALEX. BROWN INCORPORATED
(Registrant)
Date: May 6, 1996 A. B. KRONGARD
------------------------------------
A. B. Krongard
Chairman and Chief Executive Officer
Date: May 6, 1996 BEVERLY L. WRIGHT
------------------------------------
Beverly L. Wright
Principal Financial Officer
</PAGE>
12
<PAGE>
Exhibit 11
ALEX. BROWN INCORPORATED AND SUBSIDIARIES
Calculation of Earnings Per Share
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1996 March 31, 1995
---------------------- ---------------------
Fully Fully
Primary Diluted Primary Diluted
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Weighted average shares
outstanding:
Common stock 15,839 15,839 14,618 14,618
Stock options 371 427 322 389
Convertible subordinated
debentures - 2,407 - 2,576
------- ------- ------- -------
16,210 18,673 14,940 17,583
======= ======= ======= =======
Net earnings for
calculating earnings per
share:
Net earnings $40,696 $40,696 $16,402 $16,402
Interest expense on
convertible subordinated
debentures, net of tax - 627 - 564
------- ------- ------- -------
$40,696 $41,323 $16,402 $16,966
======= ======= ======= =======
Earnings per share $ 2.51 $ 2.21 $ 1.10 $ 0.96
======= ======= ======= =======
</TABLE>
13
</PAGE>
<TABLE> <S> <C>
<ARTICLE> BD
<MULTIPLIER> 1000
<C> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> $18,158
<RECEIVABLES> $1,905,056
<SECURITIES-RESALE> $28,250
<SECURITIES-BORROWED> $0<F1>
<INSTRUMENTS-OWNED> $218,511
<PP&E> $36,908
<TOTAL-ASSETS> $2,373,509
<SHORT-TERM> $176,312
<PAYABLES> $1,408,777
<REPOS-SOLD> $0
<SECURITIES-LOANED> $0<F2>
<INSTRUMENTS-SOLD> $49,210
<LONG-TERM> $193,530
<COMMON> $1,608
$0
$0
<OTHER-SE> $544,072
<TOTAL-LIABILITY-AND-EQUITY> $2,373,509
<TRADING-REVENUE> $52,365
<INTEREST-DIVIDENDS> $33,735
<COMMISSIONS> $52,005
<INVESTMENT-BANKING-REVENUES> $101,838
<FEE-REVENUE> $30,897
<INTEREST-EXPENSE> $12,185
<COMPENSATION> $145,575
<INCOME-PRETAX> $67,266
<INCOME-PRE-EXTRAORDINARY> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $40,696
<EPS-PRIMARY> $2.51
<EPS-DILUTED> $2.21
<FN>
<F1>Included as part of receivables.
<F2>Included as part of payables.
</FN>
