UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended June 30, 1999
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: 1-12043
FAHNESTOCK VINER HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Ontario, Canada 98-0080034
State or jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
P.O. Box 2015, Suite 1110
20 Eglinton Avenue West
Toronto, Ontario, Canada M4R 1K8
(Address of principal executive offices)
(Zip Code)
416-322-1515
(Registrant's telephone number, including area code)
Not applicable
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether 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 [ ]
The number of shares of the Company's Class A non-voting shares and
Class B voting shares (being the only classes of common stock of the
Company), outstanding on July 21, 1999 was 12,429,769 and 99,680 shares,
respectively.
FAHNESTOCK VINER HOLDINGS INC.
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet
as of June 30, 1999
and December 31, 1998
Consolidated Statement of Operations
for the six months ended
June 30, 1999 and 1998
Consolidated Statement of Cash Flows
for the six months ended
June 30, 1999 and 1998
Notes to Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
FAHNESTOCK VINER HOLDINGS INC.
CONSOLIDATED BALANCE SHEET (unaudited)
June 30, December 31,
1999 1998
Expressed in thousands of U.S. dollars
ASSETS
Current assets
Cash and short-term deposits $14,975 $11,501
Restricted deposits 2,751 2,312
Securities purchased under agreement to resell 38,067 12,174
Deposits with clearing organizations 12,327 7,072
Receivable from brokers and clearing organizations 197,924 167,018
Receivable from customers 466,608 334,664
Securities owned, at market value 78,748 88,579
Demand notes receivable 30 30
Other 17,611 26,912
829,041 650,262
Other assets
Stock exchange seats (approximate market value
$6,535; $4,798 in 1998) 1,326 1,507
Fixed assets, net of accumulated depreciation of
$10,334; $8,896 in 1998 9,301 9,286
Goodwill, at amortized cost 5,476 5,708
16,103 16,501
$845,144 $666,763
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Drafts payable $16,024 $22,734
Bank call loans 29,779 42,217
Securities sold under agreement to repurchase 28,425 664
Payable to brokers and clearing organizations 384,466 235,029
Payable to customers 116,657 115,878
Securities sold, but not yet purchased, at market value 45,258 41,104
Accounts payable and other liabilities 37,939 40,119
Income taxes payable 8,231 2,665
Subordinated loans payable 30 30
666,809 500,440
Shareholders' equity
Share capital
12,375,819 Class A non-voting shares
(1998 - 12,241,269 shares) 36,310 36,392
99,680 Class B voting shares 133 133
36,443 36,525
Contributed capital 3,105 2,196
Retained earnings 138,787 127,602
178,335 166,323
$845,144 $666,763
The accompanying notes are an integral part of these condensed financial
statements.
FAHNESTOCK VINER HOLDINGS INC.
CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
Second Quarter ended Six Months ended
June 30, June 30,
1999 1998 1999 1998
Expressed in thousands of U.S. dollars, except per share amounts
REVENUE:
Commissions $31,540 $29,380 $60,813 $58,781
Principal transactions, net 20,135 14,399 34,938 33,628
Interest 10,992 11,404 20,188 22,387
Underwriting fees 2,690 4,035 5,606 6,352
Advisory fee 5,519 4,776 12,018 10,538
Other 2,072 3,909 3,336 5,416
72,948 67,903 136,899 137,102
EXPENSES:
Compensation and related
expenses 37,189 36,317 71,183 72,710
Clearing and exchange fees 2,452 2,078 4,632 4,196
Communications 5,377 5,630 10,705 10,894
Occupancy costs 3,353 3,415 6,360 6,455
Interest 5,579 5,939 10,214 12,156
Other 5,243 3,358 10,058 7,336
59,193 56,737 113,152 113,747
Profit before income taxes 13,755 11,166 23,747 23,355
Income tax provision 6,148 4,961 10,795 10,117
NET PROFIT FOR PERIOD $7,607 $6,205 $12,952 $13,238
Profit per share
- basic $0.61 $0.49 $1.04 $1.04
- diluted $0.60 $0.47 $1.02 $1.01
The accompanying notes are an integral part of these condensed financial
statements.
FAHNESTOCK VINER HOLDINGS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
FOR THE SIX MONTHS ENDED JUNE 30,
1999 1998
Expressed in thousands of U.S. dollars
Cash flows from operating activities:
Net profit for the period $12,952 $13,238
Adjustments to reconcile net profit to net cash provided
by (used in) operating activities:
Non-cash items included in net profit:
Depreciation and amortization 1,686 1,369
Gain on sale of exchange seat (492) -
Decrease (increase) in operating assets,
Restricted deposits (439) (386)
Securities purchased under agreements to resell (25,893) -
Deposits with clearing organizations (5,255) (2,314)
Receivable from brokers and clearing
organizations (30,906) 96,726
Receivable from customers (131,944) (21,825)
Securities owned 9,831 (17,254)
Other assets 9,302 11,818
Increase (decrease) in operating liabilities,
Drafts payable (6,710) (4,293)
Securities sold under agreement to repurchase 27,761 880
Payable to brokers and clearing organizations 149,437 (97,659)
Payable to customers 780 (6,518)
Securities sold, but not yet purchased 4,154 9,107
Accounts payable and other liabilities (2,180) (6,166)
Income taxes payable 5,567 (8,281)
Cash provided by (used in)
operating activities 17,651 (31,558)
Cash flows from investing activities:
Proceeds from sale of exchange seat 655 -
Purchase of fixed assets (1,453) (1,712)
Cash (used in) investing
activities (798) (1,712)
Cash flows from financing activities:
Cash dividends paid on Class A non-voting and
Class B shares (1,768) (1,778)
Issuance of Class A non-voting shares 3,771 1,529
Repurchase of Class A non-voting shares for
cancellation (3,853) (299)
Tax benefit from employee stock options exercised 909 -
(Decrease) increase in bank call loans (12,438) 32,677
Cash (used in) provided by
financing activities (13,379) 32,129
Net increase (decrease) in cash and short-term deposits 3,474 (1,141)
Cash and short-term deposits, beginning of period 11,501 10,784
Cash and short-term deposits, end of period $14,975 $9,643
The accompanying notes are an integral part of these condensed financial
statements.
FAHNESTOCK VINER HOLDINGS INC.
Notes to Consolidated Financial Statements (unaudited)
1. Basis of Presentation
The consolidated financial statements include the accounts of
Fahnestock Viner Holdings Inc. ("FVH") and its subsidiaries (together,
the "Company"). The principal subsidiary of FVH is Fahnestock & Co.
Inc. ("Fahnestock"), a registered broker-dealer in securities. All material
intercompany accounts have been eliminated in consolidation.
The Company's financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission ("SEC") with respect to Form 10-Q and do not include all
of the information and footnotes required under accounting principles
generally accepted in the United States for complete financial statements.
These financial statements should be read in conjunction with the
Company's most recent annual report on Form 10-K for the year ended
December 31, 1998 which should be consulted for a summary of the
significant accounting policies utilized by the Company.
All adjustments which, in the opinion of management, are normal
and recurring and necessary for a fair presentation of the results of
operations, financial position and cash flows for the interim periods
presented have been made. The nature of the Company's business is such
that the results of operations for the interim periods are not necessarily
indicative of the results to be expected for a full year.
These consolidated financial statements are presented in U.S.
dollars.
2. Profit per share
Profit per share was computed by dividing net profit by the
weighted average number of Class A non-voting and Class B shares
outstanding. Diluted profit per share includes the weighted average Class
A non-voting and Class B shares outstanding and the effects of Class A
non-voting share options using the treasury stock method.
Profit per share has been calculated as follows:
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
Basic weighted average
number of shares
outstanding 12,511,060 12,684,423 12,511,060 12,684,423
Net effect, treasury stock
method 161,411 462,222 133,961 423,418
Diluted common shares 12,672,472 13,146,645 12,645,022 13,107,841
Net profit for the period $7,607,000 $6,205,00 $12,952,000 $13,238,000
Basic profit per share $0.61 $0.49 $1.04 $1.04
Diluted profit per share $0.60 $0.47 $1.02 $1.01
3. Net Capital Requirements
The Company's principal broker-dealer subsidiary, Fahnestock, is
subject to the Uniform Net Capital Rule (the "Rule") of the SEC and the
net capital rule of the New York Stock Exchange (the "NYSE").
Fahnestock has elected to use the alternative method permitted by the
Rule which requires that it maintains minimum net capital equal to 2% of
aggregate debit items arising from customer transactions, as defined. The
NYSE may prohibit a member firm from expanding its business or
paying dividends if resulting net capital would be less than 5% of
aggregate debit items.
At June 30, 1999, the net capital of Fahnestock as calculated
under the Rule was $119,621,000 or 23% of Fahnestock's aggregate
debit items. This was $109,187,000 in excess of the minimum required
net capital.
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The securities industry is directly affected by general economic
and market conditions, including fluctuations in volume and price levels
of securities and changes in interest rates, all of which have an impact on
commissions and firm trading and investment income as well as on
liquidity. Substantial fluctuations can occur in revenues and net income
due to these and other factors.
Results of Operations
Unaudited net profit for the second quarter of 1999 was
$7,607,000 or $0.61 per shares compared to $6,205,000 or $0.49 per
share for the second quarter of 1998, an increase of 23% in net profit.
Revenue for the second quarter of 1999 was $72,948,000, an increase of
7% over revenue of $67,903,000 for the same period in 1998.
Commission revenue, principal trading revenue and advisory fees in 1999
surpassed levels achieved in 1998, as investor activity in the equity
markets continued at high levels.
Net profit for the six months ended June 30, 1999 was
U.S.$12,952,000 or $1.04 per share compared to U.S. $13,238,000 or
$1.04 per share for the comparable period of 1998, a decrease of 2% in
net profit. Revenue for the first six months of 1999 was U.S.
$136,899,000, compared to revenue of U.S. $137,102,000 in the first six
months of 1998.
During the second quarter of 1999, there was a continuation in the high
level of retail investor activity that has existed for the past several
quarters. Volatility increased in the equity and debt markets, as the stock
market raced to new highs in early May, only to drop back due to concern
over higher interest rates, and then reflected relief after comments
from the Federal Reserve Board at their June meeting, closing
the quarter with renewed strength. The volume on the NYSE and
NASDAQ set new records, and the Company likewise set
volume records on number of client transactions processed during the
quarter.
Commission income and to a large extent, income from
principal transactions, depend on market volume levels. Commission
revenue increased by 7% in the second quarter of 1999 compared to the
second quarter of 1998 due to strong market conditions and higher levels
of investor participation. Net revenue from principal transactions
increased substantially compared to the second quarter of 1998, but
remained constant on a year to year basis. Market volatility has reduced
the quarter to quarter predictability of these revenues. Investment banking
revenues declined by 33% in the second quarter of 1999 compared to the
same quarter of 1998 due to the timing of underwriting and private
placement activity and advisory fees increased by 16% due to an increase
in assets under management. Net interest revenue (interest revenue less
interest expense) decreased slightly in the second quarter of 1999
compared to the same period in 1998 as a result of lower stock
borrow/stock loan activity. Expenses, other than interest, increased by 6%
in the second quarter of 1999 compared to the same quarter of 1998 due
to the impact of higher compensation, clearing and other variable costs
that rise with an increased volume of business transacted. The First of
Michigan business, which was acquired in July 1997, has been operating
as a division of Fahnestock since the beginning of 1999. Expenses
relating to the First of Michigan division were lower during the quarter as
the effects of its consolidation into Fahnestock continued to be felt.
Liquidity and Capital Resources
Total assets at June 30, 1999 of $845,144,000 increased by
approximately 27% from $666,763,000 at December 31, 1998 due
primarily to higher customer and broker/dealer balances. Liquid assets
accounted for 98% of total assets, consistent with year end levels. The
Company satisfies its need for funds from its own cash resources,
internally-generated funds, subordinated borrowings, collateralized
borrowings consisting primarily of bank loans, and uncommitted lines of
credit. The amount of Fahnestock's bank borrowings fluctuates in
response to changes in the level of the Company's securities inventories
and customer margin debt as well as changes in stock loan balances.
Fahnestock has arrangements with banks for borrowings on a fully
collateralized basis. At June 30, 1999, $29,779,000 of such borrowings
were outstanding.
Management believes that funds from operations, combined with
Fahnestock's capital base and available credit facilities, are sufficient for
the Company's liquidity needs in the foreseeable future.
Through June 30, 1999, the Company has purchased and
cancelled a total of 673,700 Class A non-voting shares at an average cost
of $14.61 (275,200 shares at an average price of $14.00 per share were
purchased during the first six months of 1999) through the facilities of
the New York and the Toronto Stock Exchanges pursuant to a Normal
Course Issuer Bid that was open from July 3, 1998 to July 2, 1999.
The Company announced that it intends to purchase up to
758,000 of its Class A non-voting shares (approximately 10% of the
public float) by way of a Normal Course Issuer Bid through the facilities
of the Toronto and New York Stock Exchanges during the period July 5,
1999 through July 4, 2000. The Company believes that its Class A non-
voting shares may be undervalued from time to time and that the
repurchase of such shares is an appropriate use of corporate funds.
On February 26, 1999 and May 21, 1999, the Company paid cash
dividends of U.S.$0.07 per Class A non-voting and Class B share totaling
$1,768,000 from available cash on hand.
On July 21, 1999, the board of directors declared a regular
quarterly cash dividend of $0.07 per Class A non-voting and Class B
share payable on August 20, 1999 to shareholders of record on August 6,
1999.
Year 2000 Disclosure
The Year 2000 problem ("Year 2000" or "Y2K") is the result of
computer systems having been written using two digits, rather than four,
to define the year. Any computer, computer program, equipment or
product that has date-sensitive software or embedded chips, not
corrected, could produce inaccurate or unpredictable results commencing
on January 1, 2000.
The Company is a broker/dealer in securities and as such relies
heavily on computer technology to conduct its operations. The Company
relies on both internal systems and on third party vendors. The
Company's remediation efforts have proceeded according to plan. The
modification and testing of the Company's internal systems for Year
2000 compliance is complete and Y2K compliant versions are currently
in service. Non-information systems have also been assessed, modified
and tested. In March, April and May 1999, the Company participated in
an industry-wide testing program. The Securities Industry Association
reported that these tests were successful. The Company will continue to
perform internal and point-to-point tests with significant counterparties
throughout the balance of 1999. The Company has contacted the third
parties on whom it relies, regarding their Year 2000 status, and has
received assurances that the third party systems are compliant. However,
there can be no guarantee that these parties have provided accurate and
complete information concerning their Year 2000 efforts.
The cost of readying the Company for Year 2000 has been
estimated to be approximately $500,000 for fiscal 1999. This includes the
costs associated with the personnel dedicated to the project and the cost
of new hardware. A budget of $50,000 has been approved for fiscal 2000
to cover contingencies. This range of costs does not include normal
ongoing costs for computer hardware or software revisions that would be
required in the normal course of business. All funding for the Y2K
compliance effort is from available cash on hand.
The Company has adopted a comprehensive contingency plan
with respect to the Y2K problem, is reviewing this plan on an ongoing
basis to assess its continued applicability, and is making adjustments as
required.
Despite the Company's planning and preparation for Year 2000,
there can be no assurance that partial or total systems interruptions will
not occur and that the costs necessary to update hardware and software
would not have a material adverse impact on the Company's business,
financial condition, statement of operations and business prospects.
Factors Affecting "Forward-Looking Statements"
This report on Form 10-Q contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933,
as amended ( the "Act"), and Section 21E of the Exchange Act.
These forward-looking statements relate to anticipated
financial performance, future revenues or earnings, business prospects
and anticipated market performance of the Company. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company cautions readers that a variety of factors could cause
the Company's actual results to differ materially from the anticipated
results or other expectations expressed in the Company's forward-
looking statements. These risks and uncertainties, many of which are
beyond the Company's control, include, but are not limited to: (i)
transaction volume in the securities markets, (ii) the volatility of the
securities markets, (iii) fluctuations in interest rates, (iv) changes in
regulatory requirements which could affect the cost and manner of doing
business, (v) fluctuations in currency rates, (vi) general economic
conditions, both domestic and international, (vii) changes in the rate of
inflation and the related impact on the securities markets, (viii)
competition from existing financial institutions and other new
participants in the securities markets, (ix) legal developments affecting
the litigation experience of the securities industry, and (x) changes in
federal and state tax laws which could affect the popularity of products
sold by the Company. There can be no assurance that the Company has
correctly or completely identified and assessed all of the factors affecting
the Company's business. The Company does not undertake any
obligation to publicly update or revise any forward-looking statements.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Risk Management
The Company's principal business activities by their nature
involve significant market and credit risks. The Company's effectiveness
in managing these risks is critical to its success and stability.
As part of its normal business operations, the Company engages
in the trading of both fixed income and equity securities in both a
proprietary and market-making capacity. The Company makes markets in
over-the-counter equities in order to facilitate order flow and
accommodate its institutional and retail customers. The Company also
makes markets in municipal bonds, mortgage-backed securities,
government bonds and high yield bonds.
Market risk generally means the risk of loss that may result from
the potential change in the value of a financial instrument as a result of
fluctuations in interest and currency exchange rates and in equity and
commodity prices. Market risk is inherent in all types of financial
instruments, including both derivatives and non-derivatives. The
Company's exposure to market risk arises from its role as a financial
intermediary for its customers' transactions and from its proprietary
trading and arbitrage activities.
In addition, the Company's activities expose it to operational risk,
legal risk and funding risk. Operational risk generally means the risk of
loss resulting from improper processing of transactions or deficiencies in
the Company's operating systems or internal controls. With respect to its
trading activities, the Company has procedures designed to ensure that all
transactions are accurately recorded and properly reflected on the
Company's books on a timely basis. With respect to client activities, the
Company operates a system of internal controls designed to ensure that
transactions and other account activity (new account solicitation,
transaction authorization, transaction processing, billing and collection)
are properly approved, processed, recorded and reconciled. Legal risk
generally includes the risk of non-compliance with legal and regulatory
requirements and the risk that a counterparty's obligations are
unenforceable. The Company is subject to extensive regulation in the
various jurisdictions in which it conducts its business. Through its legal
advisors and its compliance department, the Company has established
routines to ensure compliance with regulatory capital requirements, sales
and trading practices, new products, use and safekeeping of customer
securities and funds, granting of credit, collection activities, and record
keeping. The Company has procedures designed to assess and monitor
counterparty risk.
Value-at-Risk
Value-at-risk is a statistical measure of the potential loss in the
fair value of a portfolio due to adverse movements in underlying risk
factors. In response to the SEC's market risk disclosure requirements, the
Company has performed a value-at-risk analysis of its trading financial
instruments and derivatives. The value -at-risk calculation uses standard
statistical techniques to measure the potential loss in fair value based
upon a one-day holding period and a 95% confidence level. The
calculation is based upon a variance-covariance methodology, which
assumes a normal distribution of changes in portfolio value. The forecasts
of variances and co-variances used to construct the model, for the market
factors relevant to the portfolio, were generated from historical data.
Although value-at-risk models are sophisticated tools, their use can be
limited as historical data is not always an accurate predictor of future
conditions. The Company attempts to manage its market exposure using
other methods, including trading authorization limits and concentration
limits.
At June 30, 1999, March 31, 1999 and December 31, 1998, the Company's value-
at-risk for each component of market risk was as follows:
June 30, March 31, December 31,
(000's omitted) 1999 1999* 1998
Interest rate risk $166 $254 $298
Equity price risk 498 518 759
Diversification benefit (265) (345) (575)
Total $399 $427 $482
*The March 31, 1999 value-at-risk has been revised from the amounts included
in the Company;s Report on Form 10-Q for the quarterly period ended
March 31, 1999.
The potential future loss presented by the total value-at-risk
generally falls within predetermined levels of loss that should not be
material to the Company's results of operations, financial condition or
cash flows. The changes in the value-at-risk amounts reported in 1999
from those reported in 1998 reflect changes in the size and composition
of the Company's trading portfolio; more particularly an increase in the
size and weighting of the Company's portfolio of government debt and
a reduction in the Company's exposure to NASDAQ markets at June 30, 1999
compared to December 31, 1998 reduced both interest rate risk and equity
price risk components.
The value-at-risk estimate has limitations that should be
considered in evaluating the Company's potential future losses based on
the year-end portfolio positions. Recent market conditions, including
increased volatility, may result in statistical relationships that result in
higher value-at-risk than would be estimated from the same portfolio
under different market conditions, or the converse may be true. Critical
risk management strategy involves the active management of portfolio
levels to reduce market risk. The Company's market risk exposure is
continuously monitored as the portfolio risks and market conditions
change.
PART II
ITEM 1. Legal Proceedings
There are no material legal proceedings to which the
Company or its subsidiaries are parties or to which any of their
respective properties are subject. The Company's subsidiaries are
parties to legal proceedings incidental to their respective
businesses. The materiality of legal matters on the Company's
future operating results depends on the level of future results of
operations as well as the timing and ultimate outcome of such
legal matters.
ITEM 2. Changes in Securities and Use of Proceeds
Not applicable
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security-Holders
None
ITEM 5. Other Information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Financial Data Schedule included as Exhibit 27
(b) Reports on Form 8-K - None
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 hereunto duly authorized, in the City of Toronto, Ontario,
Canada on the 21st day of July, 1999.
FAHNESTOCK VINER HOLDINGS INC.
By:/s/ A.G. Lowenthal
A.G.Lowenthal, Chairman
(Principal Financial Officer)
By:/s/ E.K. Roberts
E.K.Roberts, President
(Duly Authorized Officer)
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
EXHIBIT 27
Financial Data Schedule for the second quarter ended June 30, 1999
required pursuant to Item 601(c) of Regulation S-K and Regulation S-B
and Rule 401 of Regulation S-T.
</LEGEND>
<CIK> 0000791963
<NAME> FAHNESTOCK VINER HOLDINGS INC.
<MULTIPLIER> 1
<CURRENCY> 1
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<EXCHANGE-RATE> 1
<CASH> 14,975,000
<RECEIVABLES> 503,842,000
<SECURITIES-RESALE> 38,067,000
<SECURITIES-BORROWED> 160,720,000
<INSTRUMENTS-OWNED> 78,748,000
<PP&E> 9,301,000
<TOTAL-ASSETS> 845,144,000
<SHORT-TERM> 29,779,000
<PAYABLES> 221,028,000
<REPOS-SOLD> 28,425,000
<SECURITIES-LOANED> 372,098,000
<INSTRUMENTS-SOLD> 45,258,000
<LONG-TERM> 0
<COMMON> 36,443,000
0
0
<OTHER-SE> 141,892,000
<TOTAL-LIABILITY-AND-EQUITY> 845,144,000
<TRADING-REVENUE> 20,135,000
<INTEREST-DIVIDENDS> 10,992,000
<COMMISSIONS> 31,541,000
<INVESTMENT-BANKING-REVENUES> 2,690,000
<FEE-REVENUE> 5,519,000
<INTEREST-EXPENSE> 5,579,000
<COMPENSATION> 37,189,000
<INCOME-PRETAX> 13,755,000
<INCOME-PRE-EXTRAORDINARY> 7,607,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,607,000
<EPS-BASIC> 0.61
<EPS-DILUTED> 0.60
</TABLE>
