SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1996
Commission file number 0-19483
SOUTHWEST SECURITIES GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2040825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Elm Street, Suite 3500, Dallas, Texas 75270
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 651-1800
(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
As of May 10, 1996, there were 8,783,630 shares of the registrant's common
stock, $.10 par value, outstanding.
<PAGE>
SOUTHWEST SECURITIES GROUP, INC. AND SUBSIDIARIES
INDEX
Part 1. Financial Information
Item 1. Financial Statements
Consolidated Statements of Financial Condition
March 29, l996 and June 30, l995
Consolidated Statements of Income
For the three and nine months ended March 29, l996 and March 31, 1995
Consolidated Statements of Cash Flows
For the nine months ended March 29, l996 and March 31, 1995
Notes to Consolidated Financial Statements
March 29, l996
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. Other Information
Item 1. Legal proceedings
Item 2. Changes in Securities
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
<PAGE>
SOUTHWEST SECURITIES GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition
March 29, l996 and June 30, l995
(Dollars in thousands, except par values and share amounts)
<TABLE>
<CAPTION>
March June
(Unaudited)
<S> <C> <C>
Assets
Cash $ 6,485 $ 3,589
Assets segregated for regulatory purposes 246,444 202,367
Receivable from brokers, dealers and
clearing organizations 1,364,660 958,025
Receivable from clients, net of
allowance for doubtful accounts 385,870 309,684
Securities owned, at market value 35,585 36,565
Other assets 21,945 25,749
$ 2,060,989 $ 1,535,979
Liabilities and Stockholders' equity
Short-term borrowings $ 89,998 $ 69,539
Payable to brokers, dealers and
clearing organizations 1,239,467 883,586
Payable to clients 597,978 456,820
Drafts payable 31,918 25,359
Other liabilities 21,196 29,134
1,980,557 1,464,438
Stockholders' equity:
Preferred stock of $1.00 par value.
Authorized 100,000 shares; none issued. --- ---
Common stock of $.10 par value. Authorized
10,000,000 shares. Issued 8,792,807 and
outstanding 8,783,630 at March 29, 1996 and
8,763,396 at June 30, 1995. 879 876
Additional paid-in capital 27,107 26,860
Retained earnings 52,822 44,181
Receivable from employees under the
Employee Stock Purchase Plan (302) (376)
Treasury stock, at cost, 9,177 shares
at March 29, 1996 (74) ---
Total Stockholders' equity 80,432 71,541
Commitments and contingencies
$ 2,060,989 $ 1,535,979
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
SOUTHWEST SECURITIES GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the three months and nine months ended
March 29, 1996 and March 31, 1995
(Dollars in thousands, except per share and share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Revenues 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net revenues from clearing
operations $ 4,921 $ 2,518 $ 12,556 $ 7,694
Commissions 9,339 6,312 26,908 19,133
Interest 23,350 16,753 69,457 45,221
Investment banking, advisory and
administrative fees 2,703 1,986 9,040 6,360
Net gains on principal transactions 1,074 1,742 6,570 3,651
Other 2,900 1,382 6,992 3,535
44,287 30,693 131,523 85,594
Expenses
Commissions and other
employee compensation 12,644 9,598 39,569 29,265
Interest 16,772 11,173 49,964 29,497
Occupancy, equipment and computer
service costs 2,199 1,963 6,996 6,332
Communications 2,574 1,601 6,636 4,773
Floor brokerage and clearing
organization charges 969 842 2,917 2,395
Other 3,355 2,520 10,497 7,639
38,513 27,697 116,579 79,901
Income before income taxes 5,774 2,996 14,944 5,693
Provision for income taxes 2,050 1,155 5,249 2,079
Net Income $ 3,724 $ 1,841 $ 9,695 $ 3,614
Earnings per share $ .42 $ . 23 $ 1.10 $ .44
Weighted average shares outstanding 8,783,630 8,052,732 8,785,727 8,138,652
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE>
SOUTHWEST SECURITIES GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the nine months ended March 29, 1996 and March 31, 1995
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,695 $ 3,614
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 2,129 2,113
Provision for doubtful accounts 932 606
Deferred income taxes (1,013) ---
(Increase) decrease in assets segregated
for regulatory purposes (44,077) 8,219
Net change in broker, dealer and
clearing organization accounts (50,754) (50,260)
Net change in client accounts 64,040 (4,976)
Decrease in securities owned 980 9,489
Increase (decrease) in other assets 4,565 (8,173)
Increase in drafts payable 6,559 2,677
Decrease in other liabilities (7,975) (1,393)
Net cash used in operating activities (14,919) (38,084)
Cash flows from investing activities:
Purchase of furniture, equipment,
and leasehold improvements (2,116) (1,064)
Disposal of furniture, equipment,
and leasehold improvements 232 ---
Net cash used in investing activities (1,884) (1,064)
Cash flows from financing activities:
Proceeds from short term borrowings 20,459 37,535
Payment of capital lease obligation --- (723)
Purchase of treasury stock (74) (1,880)
Proceeds from employees for
Employee Stock Purchase Plan 74 19
Net proceeds from issuance of common stock 250 ---
Payment of cash dividend on common stock (1,010) (830)
Net cash provided by financing activities 19,699 34,121
Net increase (decrease) in cash 2,896 (5,027)
Cash at beginning of period 3,589 10,207
Cash at end of period $ 6,485 $ 5,180
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
<PAGE>
SOUTHWEST SECURITIES GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
General and Basis of Presentation
The accompanying interim consolidated financial statements include the
accounts of Southwest Securities Group, Inc. ("Parent") and its wholly owned
subsidiaries, (collectively, the "Company"), Southwest Securities, Inc.
("Southwest"), Brokers Transaction Services, Inc. ("BTS"), Southwest
Investment Advisors, Inc. ("Advisors"), Trust Company of Texas ("Trust
Company"), Westwood Management Corporation ("Westwood"), and SW Capital
Corporation ("Capital"). Southwest and BTS are registered broker/dealers
under the Securities Exchange Act of 1934 ("1934 Act"). Advisors and
Westwood are registered investment advisors under the Investment Advisors Act
of 1940. All significant intercompany balances and transactions have been
eliminated.
The consolidated financial statements as of March 29, 1996, and for the three
and nine month periods ended March 29, 1996 and March 31, 1995, are
unaudited; however, in the opinion of management, these interim statements
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial position, results of
operations and cash flows. These financial statements should be read in
conjunction with the consolidated financial statements and related notes in
the Company's annual audited report as of June 30, 1995. Amounts included
for June 30, 1995 are from the audited financial statements as filed on Form
10-K.
Cash Flow Reporting
Cash paid for interest was $49,121,000 and $28,391,000 for the periods ended
March 29, 1996 and March 31, 1995, respectively. Cash paid during the period
for income taxes was $3,540,000 and $1,197,000 in 1996 and 1995,
respectively.
Securities Purchased Under Agreements to Resell (Reverse Repurchase
Agreements) Southwest, from time to time, enters into reverse repurchase
agreements (collateralized by U.S. Government or U.S. Government agency
securities), for the purpose of segregating assets for the exclusive benefit
of its customers. Under a master repurchase agreement ("Agreement") with Trust
Company, securities purchased under the reverse repurchase agreement are
identified and segregated by Trust Company on its books and records as subject
to the Agreement. Management regularly monitors the market value of the
underlying securities relating to outstanding reverse repurchase agreements.
Assets Segregated for Regulatory Purposes
At March 29, 1996, the Company had reverse repurchase agreements of
$99,071,000 and U.S. Treasury securities with a market value of $147,373,000
segregated in a special reserve bank account for the exclusive benefit of
customers under Rule 15c3-3 of the 1934 Act, at Trust Company. The reverse
repurchase agreements were collateralized by U.S. Government securities with a
market value of approximately $100,515,000. At June 30, 1995, the Company had
reverse repurchase agreements of $82,083,000, and U.S. Treasury securities
with a market value of $120,284,000 in this account. The reverse repurchase
agreements were collateralized by U.S. Government securities with a market
value of approximately $82,953,000 at June 30, 1995.
<PAGE>
Receivable from and Payable to Brokers, Dealers and Clearing
Organizations At March 29, l996 and June 30, l995, the Company had
receivables from and payables to brokers, dealers and clearing
organizations relating to the following (000's omitted):
<TABLE>
<CAPTION>
March June
<S> <C> <C>
Receivables:
Securities failed to deliver $ 15,531 $ 26,419
Securities borrowed 1,264,304 863,648
Correspondent broker/dealers 75,191 58,523
Clearing organizations 443 608
Other 9,191 8,827
$ 1,364,660 $ 958,025
March June
Payables:
Securities failed to receive $ 17,175 $ 24,419
Securities loaned 1,209,594 848,722
Correspondent broker/dealers 8,575 7,246
Other 4,123 3,199
$ 1,239,467 $ 883,586
</TABLE>
Short-term Borrowings
Southwest has credit arrangements with commercial banks, which include broker
loan lines up to $215,000,000 to finance securities owned, securities held for
correspondent broker/dealer accounts, and receivables in clients' margin
accounts. This line may also be used to release pledged collateral against
day loans. These credit arrangements are provided on an "as offered" basis
and are not committed lines of credit. These arrangements can be terminated
at any time by the lender. Any outstanding balance under these credit
arrangements is due on demand and bears interest at the brokers' call rate.
The amount outstanding under these credit facilities at March 29, 1996 was
$76,015,000 and was collateralized by marketable securities owned valued at
approximately $19,138,000, securities held for correspondent broker/dealer
accounts valued at approximately $67,818,000 and clients' securities valued at
approximately $71,545,000. At March 29, 1996, Southwest had securities sold
under agreements to repurchase for $l3,983,000, maturing April 2, 1996.
Additionally, Southwest had an irrevocable letter of credit agreement at March
29, 1996 aggregating $10,300,000, pledged to support its open positions with
an options clearing corporation. The letter of credit bears interest at the
brokers' call rate, if drawn, and is renewable annually. This letter of
credit is fully collateralized by marketable securities held in clients and
non-clients margin accounts with a value of $15,402,000.
Net Capital Requirements
The broker/dealer subsidiaries are subject to the Securities and Exchange
Commission's Uniform Net Capital Rule, which requires the maintenance of
minimum net capital. Southwest has elected to use the alternative method,
permitted by the rule, which requires that it maintain minimum net capital, as
defined in Rule 15c3-1 under the 1934 Act, equal to the greater of $l,500,000
or 2% of aggregate debit balances, as defined in Rule 15c3-1 under the l934
Act. At March 29, 1996, Southwest had net capital of $46,786,000, or
approximately 10% of aggregate debit balances, which is $38,982,000 in excess
of its minimum net capital requirement of $7,804,000 at that date.
<PAGE>
Additionally, the net capital rule of the New York Stock Exchange, Inc.
provides that equity capital may not be withdrawn or cash dividends paid if
resulting net capital would be less than 5% of aggregate debit items. At
March 29, l996, Southwest had net capital of $23,177,000 in excess of 5% of
aggregate debit items.
BTS follows the primary (aggregate indebtedness) method under Rule 15c3-3,
which requires it to maintain minimum net capital of $100,000 at March 29,
1996. At that date, BTS had net capital of $153,000 which is $53,000 in
excess of its minimum net capital requirement at that date.
Trust Company is subject to the capital requirements of the Texas Department
of Banking, and has a minimum capital requirement of $1,000,000. At March 29,
1996, Trust Company had total stockholder's equity of $4,663,000 which is
$3,663,000 in excess of its minimum capital requirement at that time.
Employee Stock Purchase Plan
The Company adopted an Employee Stock Purchase Plan ("Plan") as of August 30,
1994 to enable employees of the Company to purchase up to 468,227 shares of
common stock of the Company. Substantially all full-time employees were
eligible to purchase a minimum of $2,500 up to a maximum of $50,000 of the
common stock, subject to certain limitations, at a price of $6.89 per share.
The terms of the Plan provide that the Company will loan the full purchase
price of the stock to the employee under a promissory note due in monthly
installments over a five year period bearing interest at the Applicable
Federal Rate (5.47% at March 29, 1996). A total of 61,122 shares were sold
under the terms of the Plan, resulting in loans to employees of $421,000. The
amount outstanding under these notes at March 29, 1996 was $302,000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Southwest Securities Group, Inc. (The "Company"), through its principal
subsidiary, Southwest Securities, Inc. ("Southwest"), provides securities
transaction processing and other related services and operates a full-service
brokerage, investment banking and asset management firm. Its primary business
is delivering a broad range of securities transaction processing services to
broker/dealers, including the brokerage affiliates of commercial banks.
Transaction processing services include cost-effective integrated trade
execution, clearing, client account processing and other customized services
("Transaction Processing"). Southwest also provides services that are
directly related to Transaction Processing including margin lending and stock
loan services. The Company also provides securities brokerage and investment
services primarily to individuals, provides investment banking services to
municipal and corporate clients and trades fixed income and equity securities.
Brokers Transaction Services, Inc., ("BTS") a wholly owned subsidiary of the
Company, and a National Association of Securities Dealers registered
broker/dealer, contracts with independent registered representatives for the
administration of their securities business. Southwest Investment Advisors,
Inc., a wholly owned subsidiary of the Company is a registered investment
advisor and currently inactive. SW Capital Corporation, a wholly owned
subsidiary of the Company, administers the Local Government Investment
Cooperative ("LOGIC") program. The LOGIC program allows participants to pool
their available funds, resulting in increased economies of scale, which allow
higher returns while maintaining a high degree of safety and liquidity. In
addition, the Company offers asset management and trust services through its
wholly owned subsidiaries, Westwood Management Corporation and The Trust
Company of Texas.
While Southwest has over 200 correspondents, one correspondent, BA Investment
Services, Inc., ("BAIS") accounted for 3% and 5% of the Company's revenues in
fiscal years 1995 and 1994, respectively. BAIS is a wholly owned subsidiary
of BankAmerica Corp. BAIS has modified its clearing agreement with Southwest
and is now clearing a substantial amount of its own transactions. Management
believes that, based on the Transaction Processing and related services
provided to BAIS in fiscal 1995, the agreement modifications will reduce
fiscal 1996 revenues by approximately $3,000,000 with minimal impact on
revenues in subsequent years.
The most important facet of the Company's operations is Transaction Processing
and related services. Substantially all of the revenues from Transaction
Processing are shown on the Company's Consolidated Statements of Income as net
revenues from clearing operations. Increased Transaction Processing and
related services have resulted in increases in certain revenues, including net
revenues from clearing operations, interest revenue from margin loans to
clients of Southwest's Correspondents and to Correspondents for their own
security inventory positions and money market administrative fees. The
resultant increases in retained earnings have increased the capital of the
Company which in turn has permitted the Company to expand all areas of its
operations.
Other major sources of revenues are commissions from Southwest's client
transactions and interest revenue from margin loans to its own clients, stock
loan transactions and other interest-bearing assets. Investment banking,
advisory and administrative fees include revenues derived from the
underwriting and distribution of corporate and municipal securities, unit
trusts and money market and other mutual funds. The major expenses incurred
by the Company relate to payment of commissions, overall compensation and
benefits for both sales and administrative personnel and the costs of funds to
finance the Company's securities operations, including short-term borrowings,
stock loan transactions and other interest-bearing obligations.
During fiscal 1994, the Company's Board of Directors authorized the repurchase
of up to 1,000,000 shares of the Company's common stock in the open market.
The Company's Board has granted management the authority to repurchase the
Company's common stock from time to time at its discretion as market
conditions permit. A total of 710,527 shares were purchased in fiscal 1994 and
1995 at a total cost of $4,776,000. All of these shares were issued in 1995
for use in the Employee Stock Purchase Plan and the acquisition of Barre &
Company, Inc.
In August 1994, the Company authorized an employee stock purchase plan
available to eligible employees. The shares available for purchase were those
purchased in the Company's series of treasury stock acquisitions. At March
29, 1996, the amount receivable from employees under the Employee Stock
Purchase Plan was $302,000.
<PAGE>
Three Months Ended March 29, l996 Compared With the
Three Months Ended March 31, l995
Total revenues increased by $13,594,000, or 44%, in the third quarter of
fiscal 1996 to $44,287,000 compared to $30,693,000 in the third quarter of
fiscal 1995. Improved market conditions as well as an increase in the number
of correspondents resulted in increased revenues from Transaction Processing
of $2,403,000, an increase of 95%. The increased activity in the securities
markets also contributed to an increase in commissions generated by Southwest
brokers and BTS registered representatives. Commissions increased $3,027,000
to $9,339,000, an increase of 48% when compared with revenues in the third
quarter of fiscal 1995 of $6,312,000. Interest income increased to
$23,350,000, an increase of $6,597,000, or 39%, while interest expense
increased 50%, or $5,599,000 to $16,772,000. This resulted in an increase in
net interest revenue of $998,000 or 18% due to increased balances in
securities lending accounts and a continuing favorable interest rate
environment. The amounts receivable and payable relating to open positions
for securities borrowed and loaned as of March 29, 1996, were $1,264,304,000
and $1,209,594,000, respectively. As of March 31, 1995, these amounts were
$882,122,000 and $857,352,000. Investment banking, advisory and
administrative fees increased $717,000 or 36% to $2,703,000 primarily due to
an increase in managed accounts and fees received for investment banking
services during the third quarter of fiscal 1996 when compared to the same
period in the previous year. Net gains on principal transactions decreased
38% or $668,000 to $1,074,000, principally due to a decline in trading and
underwriting income on fixed income securities.
Total expenses increased $10,816,000 or 39% to $38,513,000 when compared to
the quarter ended March 31, 1995 primarily as the result of increased interest
expense, as discussed above, and increased commission and employee
compensation expense. Commissions and other employee compensation increased
$3,046,000 or 32% compared to the same period last year as a result of
increased commissions generated by Southwest and BTS registered
representatives and an increase in the number of employees to 561 at March 29,
1996 compared to 432 at March 31, 1995. Other expenses increased $835,000 or
33% to $3,355,000 due to expenses associated with trading and underwriting
fixed income securities.
Nine Months Ended March 29, 1996 Compared with the
Nine Months Ended March 31, 1995
Total revenues for the nine months ended March 29, 1996 increased $45,929,000
or 54% when compared to same period last year. As discussed above, increased
activity in the securities markets and an increase in the number of
correspondents resulted in increased revenues from Transaction Processing and
commissions. Net revenues from clearing operations increased to $12,556,000
an increase of $4,862,000 or 63% from a year ago. Commissions generated by
Southwest brokers and BTS registered representatives increased $7,775,000 in
the first nine months of fiscal 1996 to $26,908,000, compared to $19,133,000
in fiscal 1995. Interest income increased $24,236,000 or 54% to $69,457,000
from $45,221,000, while interest expense increased $20,467,000 or 69% to
$49,964,000 compared to $29,497,000. Net interest revenue increased
$3,769,000 to $19,493,000 from $15,724,000, an increase of 24% due to the
increase in securities lending accounts and a favorable interest rate
environment. An increase in managed accounts and fees received for investment
banking services during the first nine months of fiscal 1996 resulted in
increased investment banking, advisory and administrative fee income of
$2,680,000 or 42% when compared to the same period last year. Favorable
market conditions resulted in increased net gains on principal transactions
and other income.
Total expenses for the nine months ended March 29, 1996 were $116,579,000
which was $36,678,000 or 46% higher than the same period last year primarily
as the result of interest expense and increased compensation. Commissions and
other employee compensation increased due to the increase in commissions
generated by Southwest brokers and BTS representatives and in the number of
employees. Other expenses rose $2,858,000 generally due to expenses
associated with trading and underwriting fixed income securities.
Liquidity and Capital Resources
Approximately 98% of the Company's assets consist of cash, assets segregated
for regulatory purposes, marketable securities and receivables from clients
(representing borrowings from Southwest by clients to finance the purchase of
securities on margin, which are secured by marketable securities) and from
brokers, dealers, and clearing organizations. All assets are financed by the
Company's equity capital, short-term bank borrowings, interest bearing and non-
interest bearing client credit balances, correspondent deposits, and other
payables. Southwest maintains an allowance for doubtful accounts which
represents amounts, in the judgment of management, that are necessary to absorb
losses from the inherent risks in receivables from clients, clients of
correspondents and correspondents themselves. As of March 29, 1996, the
allowance was approximately $4,800,000.
<PAGE>
Southwest has credit arrangements with several commercial banks, which include
broker loan lines up to $215,000,000 to finance securities owned, securities
held for correspondent accounts and receivables in client margin accounts.
These credit arrangements are provided on an "as offered" basis and are not
committed lines of credit. As of March 29, l996, the Company had $76,015,000
outstanding as loans under these arrangements. Outstanding balances under
these credit arrangements are due on demand, bear interest at the brokers'
call rate, and are collateralized by securities of Southwest and its clients.
At March 29, 1996 Southwest had securities sold under agreements to repurchase
totaling $13,983,000, which matured April 2, 1996. The repurchase
agreements were collateralized by certain U.S. Government agency securities,
held by a third party with a market value of $13,966,000. In the opinion of
management, these credit arrangements are adequate to meet the short-term
operating capital needs of Southwest.
Southwest is subject to the requirements of the Securities and Exchange
Commission and the New York Stock Exchange relating to liquidity, capital
standards and the use of client funds and securities. The Company has
historically operated in excess of the minimum net capital requirements.
Effects of Inflation
Management does not believe that changes in replacement costs of fixed assets
will materially affect the Company's operations. The rate of inflation,
however, affects the Company's expenses, such as employee compensation, rent
and communications. Increases in these expenses may not be readily
recoverable in the price the Company charges for its services. Inflation can
have significant effects on interest rates which in turn can affect prices and
activities in the securities markets. These fluctuations may have an adverse
impact on the Company's operations.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None Reportable (229.103)
Item 2. Changes in Securities
None Reportable (Per Instructions to Form 10-Q)
Item 3. Defaults upon Senior Securities
None Reportable (Per Instructions to Form 10-Q)
Item 4. Submission of Matters to a Vote of Security Holders
None Reportable (Per Instructions to Form 10-Q)
Item 5. Other Information
None Reportable (Per Instructions to Form 10-Q)
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS
10.1 Executive Compensation
The information required by this item regarding Executive compensation is
incorporated by reference to pages 10 through 13 of the Company's Proxy
Statement dated September 22, 1995 which was filed with the Commission
pursuant to Regulation 240.14a (6) (c) prior to October 28, 1995.
REPORTS ON FORM 8-K
None.
<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.
Southwest Securities Group, Inc.
(Registrant)
May 10, 1996 /S/David Glatstein
Date (Signature)
David Glatstein
President
May 10, 1996 /S/ Stacy Hodges
Date (Signature)
Stacy Hodges
Controller
<TABLE> <S> <C>
<ARTICLE> BD
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-28-1996
<PERIOD-END> MAR-29-1996
<CASH> 6,485
<RECEIVABLES> 1,750,530
<SECURITIES-RESALE> 99,071
<SECURITIES-BORROWED> 1,264,304
<INSTRUMENTS-OWNED> 35,585
<PP&E> 5,231
<TOTAL-ASSETS> 2,060,989
<SHORT-TERM> 89,998
<PAYABLES> 1,837,445
<REPOS-SOLD> 13,983
<SECURITIES-LOANED> 1,209,594
<INSTRUMENTS-SOLD> 456
<LONG-TERM> 000
000
000
<COMMON> 879
<OTHER-SE> 79,553
<TOTAL-LIABILITY-AND-EQUITY> 2,060,989
<TRADING-REVENUE> 6,570
<INTEREST-DIVIDENDS> 69,457
<COMMISSIONS> 26,908
<INVESTMENT-BANKING-REVENUES> 9,040
<FEE-REVENUE> 12,556
<INTEREST-EXPENSE> 49,964
<COMPENSATION> 39,569
<INCOME-PRETAX> 14,944
<INCOME-PRE-EXTRAORDINARY> 14,944
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 9,695
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.10
</TABLE>
