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Executives

Ron Kruszewski - Chairman, President & Chief Executive Officer

Jim Zemlyak - Chief Financial Officer

Analysts

David Trone - JMP Securities

Chris Harris - Wells Fargo Securities

Alexander Blostein - Goldman Sachs

Stifel Financial Corp. (SF) Q1 2013 Earnings Conference Call May 9, 2013 5:00 PM ET

Operator

Good afternoon. My name is Candice and I will be your conference operator today. At this time I would like to welcome everyone to the first quarter, 2013 earnings conference call.

All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions).

Mr. Jim Zemlyak, CFO of Stifel, you may begin your conference.

Jim Zemlyak

Thank you Candice. I would like to welcome everyone to our conference call today to discuss our first quarter 2013 financial results. Please note that this conference call is being recorded. If you’d like a copy of today’s presentation you may download slides from our website at www.stifel.com.

Before we begin today’s call, I’d like to remind listeners that this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are not statements of fact or guarantees of performance. They may include statements regarding other things, among other things our ability to successfully integrate acquired companies or branch offices and financial advisors, general economic, political, regulatory and market conditions, the investment banking and brokerage industry, our objectives and result and also may include our belief regarding the effect of various legal proceedings, management expectations, our liquidity and funding sources, counter party, credit risks or other similar matters. As such they are subject to risks, uncertainties and other factors that may cause actual future results to differ materially from those discussed in the statements.

To supplement our financial statements presented in accordance with GAAP, we may use certain non-GAAP measures of financial performance and liquidity. These non-GAAP measures should only be considered together with the company’s GAAP results, to the extent we discuss non-GAAP measures, the reconciliation to GAAP is available on our website at www.sifel.com.

And finally for a discussion of risks and uncertainties in our business, please see the business factors affecting the company and the financial services industry in the company’s Annual Report on Form 10-K and MD&A results and the company’s quarterly results on form 10-Q.

I will now turn the call over to our Chairman, CEO and President of Stifel, Ron Kruszewski.

Ron Kruszewski

Thank you Jim. Good afternoon everyone. We are pleased with our performance for the quarter, which included record net revenues, where our profitability is clouded by merger-related charges. It is noteworthy our Global Wealth Management segment posted both, record revenue and profitability and our institutional segment generated record quarterly revenue.

As we worked through our KBW integration process and related expense reductions, we expect to continue to report both GAAP and non-GAAP results for the remainder of the year. Looking forward, we are focused on leveraging our new and established businesses to drive growth and profits across the platform.

Additionally, we are on track this quarter to complete the acquisition of the U.S. institutional fixed income sales and trading team, and the hiring of the European team from Knight Capital Group.

The first slide I’d like to address is a market overview. Today market indices are achieving new highs with the S&P 500 I believe it closed today at 16.26. The Dow is above 15,000, so the market is scaling new heights. But in terms of equity volumes, while we’ve seen a bounce from March today, volumes remain relatively weak. They’ve been approximately 6 billion shares a day, which are well off their highs of prior years.

With respect to M&A activity, we believe a fair amount of activity was pulled into the fourth quarter of 2012. As noted the number of completed M&A transactions was down 21% sequentially.

On a positive note, I am optimistic about equity returns really for two factors. First, domestic equity flows turned positive in the first quarter. From the first quarter of 2010 through the end of last year, we have $370 billion of outflows from domestic equity funds. In Q1 it turned around with $20 billion of inflow.

Second is the equity risk premium, which is wide. The forward earnings estimate about $113 a share into the S&P 500, would generate an earnings yield of about 6.9% the 10 years at 180, give or take; that’s an equity risk premium, which historically is very wide at 510 basis points, I believe in any growth scenario.

If you take deflation off the table, I believe it has been taken off the table, in any growth scenario equities are undervalued relative to bonds, and I believe that the investments that we have made in this firm are going to begin to reap the rewards of a better market environment for securities firms such as Stifel.

I want to give you an update on the KBW merger. The merger closed February 15 for the first quarter. The back office conversion was completed on March 6. I want to give our congratulations to our operations staff. That’s quite an accomplishment, given that we closed the transaction on February 15. So kudos to the hardworking people that got that done and got it done both successfully and timely.

Since the close we’ve made significant steps towards achieving our initial cost-saving targets and I believe that the rationale for the deal is compelling as you seen the numbers. KBW is number one year-to-date and the number of FIG and bank mergers and it has advised on the five largest bank mergers this year; cross-selling synergies are evident by deals such as Boston Private Financial Holdings, where we did a preferred equity offering; Zions Bancorp. we did a preferred equity offering; Radiant Group, we did a convertible where it combined the relationships with KBW with the expertise on our convertible desk, and same with MGIC Investment Corp, we had a convertible senior debt offering.

On the equity side of the business KBW Research, we’ve combined the research staff and re-launched it. I’m pleased that in one measure which is the number of hits that we’ve had on our research for KBW are above pre-deal levels and that’s very encouraging.

More encouraging is that April was the best month for equity commissions for KBW and over a year in both their U.S. and European products, and I think our strategy of maintaining the brand, the best of what KBW has in financial services, both with specialty sales and research, and their brand in investment banking, has at least at this early returns has proven to be successful and I’m excited about that.

The next slide will look at non-core expenses relating to our KBW and two items that significantly impacted our GAAP results are first, a non-cash charge of $19.2 million after-tax, and that relates to expensing of stock awards issued in connection with the acquisition of KBW. We took this charge to align our plans and to make KBW awards retirement eligible, and second of all, we had $6.1 million in merger related expenses that was pretax.

I want to talk about this, because as I’ve talked in the past, we view items such as stock based retention, duplicate compensation, non-recurring expenses and duplicate expenses, effectively as purchase price. We analyze these when we look at doing deals and we take those costs, the after tax costs of these duplicative items and we view it as purchase price.

However, accounting rules require that we run these items through the income statement. As such, we look at core results excluding these items. Said another way, we view the after tax cost of retention and these duplicate expenses; in this case approximately $40 million as purchase price.

The next slide will project what you can expect as we eliminate the duplicate expenses over the next three quarters. This schedule includes KBW and Miller Buckfire, and the expected expenses related to the fixed income business of Knight Capital. This is our best guess at this time and could change, but I think it’s a pretty good estimate.

The impact in the second quarter on a pretax basis is $13 million. In the third quarter we have $7.5 million related to KBW and another $20 million, which is the stock based retention for Knight Capital employees, and in the fourth quarter we expect non-core expenses to be $5.3 million.

We believe after that, many of these are the duplicate and subscriptions, clearing services, communications, rent, this is all of the things that we have plans to eliminate to make KBW operate on what we said was going to be their non-comp operating expenses of $60 million annually and we’re on track for that today as we speak.

Now turning to our financial results for the quarter, we posted record quarterly revenues of $442 million, which was up 10% from a year ago. Non-GAAP net income was $40 million or $0.58 per diluted share and that compared with GAAP net income of $35 million or $0.55 a diluted share last year.

As I previously stated, there were two non-core items that impacted earnings by $0.37 a share. The non-GAAP pretax margin was 14%. And so look, I don’t like to give guidance and in fact we don’t give guidance, but we need some context in this case, because of all the moving parts.

So I’ll start by saying that if KBW had been in our results for the full quarter, revenues would have been approximately $467 million. We closed the deal mid-quarter. You don’t get started immediately. There’s a lot of drag as you do close deals. But the other thing I would say is that our quarterly run rate as of March was approximately $480 million, and I’m pleased to say we have a nice start to our second quarter. So I want to give some context to that.

The second thing is there’s been some questions about our shares outstanding. Again, we had 69 million shares outstanding for the quarter, but KBW was only half the quarter and I would like to just state that looking at the second quarter, our shares outstanding, fully diluted would be approximately $73.5 million. So just to give some context of some numbers that are going on here.

The next slide looks at our sources of revenue. Commission revenues increased 21% to $149 million. This increase was due really to higher mutual funds and listed in OTC transactions. Principle transactions decreased 8%. This was due to lower taxable debt and a decline in our equities. We had a decline in our market-making activities.

Investment banking revenue is up 11% to $78 million from $70 million. The year-over-year increase was a result of a 74% increase in advisory revenues, offset by a 7% decline in capital raising. Again to put some context to these numbers though, I think our advisory revenues were positively impacted on a comparative basis by our merger with KBW and the addition of Miller Buckfire on a historical basis.

As I’ve said, I think our advisory business was negatively impacted by the pull into the fourth quarter of last year due to tax considerations. So while I’m pleased with investment banking, al-in-all I would say investment banking had a relatively soft quarter, all things considered. Our asset management service fees were up 13% to $69 million. This increase is due to the increase in the value of assets in our fee-based accounts.

Turning to brokerage revenues, our first quarter brokerage revenues, which we look at by combining commissions and principle transactions increased 7%, versus the year ago quarter was up 10% sequentially. This increase was driven largely by commissions, which was up 21%.

On a segment basis we made nice progress in private client brokerage, equity brokerage, again related to the historical business and KBW and fixed income was flat.

The next slide reviews our core non-interest expenses. Comp and benefits as a percentage of net revenues was 63.8% in the first quarter, compared to 63.6% in the year ago quarter and 62.8% in the fourth quarter of ‘12. Our goal is to maintain comp as a percentage of revenue and our targeted range of 62% to 64%. Included in that number is always a significant amount for transition pay, which reflects our growth primarily in the private client group over the last few years. Transition pay totals 5.3% within our compensation ratio.

Non-comp operating expenses were $96.2 million or 21.8% of net revenues versus 21.6% last year. Again to give some context, our current run rate estimate of core non-comp operating expenses will be in the range of $107 million to $110 million per quarter. This excludes the Knight transaction, which won’t close until the end of the second quarter, but to give some idea of how we’re looking at non-comp OpEx on a run rate, I will repeat that we think it’s in the $107 million to $110 million item or range.

The increase in year-over-year non-comp operating expenses is related, again to our growth through acquisitions. We’ve added a number of revenue producers and support staff and officers and we need work on rationalizing our office space, given our recent mergers, primarily in New York and San Francisco.

Commissions and floor brokerage increased in clearing fees and trade execution of costs as a result of higher business and the other increase, due to increase in loan loss provisions, we’ve been adding to the loan portfolio in the bank and legal fees and professional fees.

If you look at our segment comparison, we posted record revenues in both Global Wealth Management and the Institutional Group quarter-over-quarter. Global Wealth increased 8%, our institutional group was up 18%. The revenue mix in the first quarter was 60% from global wealth and 40% from institutional. Looking forward I would say that will be in the mid to high 50’s for global well and the remainder in our institutional group.

Our Global Wealth operating contribution was $69 million, which was an all-time quarterly record. Institutional Group, the operating contribute was $28 million, which was up 17%.

Turning to Global Wealth, this segment continues to performs well. Margins were 26% in the quarter; net revenues, record $267 million, up 8%; agency transactions and mutual funds equities and insurance products increased, which was slightly offset by fixed income products. Just said another way, when we look at our business, we are seeing the beginning, not the end, of a rotation into equity products out of fixed income. I think that bodes well for the markets and we’re seeing it in our private client group.

Asset management and service fees increased again, due to increase in our fee-based assets, which totaled over $21 billion, which was up 14%. The net interest revenues increased as a result of the growth of interest earning assets at Stifel Bank and comp and benefits was up, again, primarily for – we’ve been adding financial advisors and some new offices, and we’ve added the associated fixed compensation for our support staff.

Looking at the bank, asset quality remains high. Less than $600,000 trailing 12-month and four basis points of charge offs and we are four basis points of non-performing assets.

The assets totaled a $3.8 billion at March 31, which was up 47% from last year. Of those assets, investment securities are $2.4 billion. Our total loan portfolio is over a billion. We continue to grow securities based loans and corporate loans, the market has been and continues to be competitive, but we’ve been able to grow, retain loans, 30% year-over-year.

Deposits of $3.6 billion, which we sweep from the brokerage has increased 51%. The bank will continue and continues to prudently grow assets on a risk-adjusted basis, capitalizing more and more on the access to the Stifel platform.

The next slide looks at our Institutional Group results. We posted record net revenues for the quarter, up 18% to $176 million. This increase was due to higher equity institutional commissions in investment banking, which was positively impacted by our acquisitions of KBW and Miller Buckfire and our non-comp expenses increased, again due to these mergers.

Pretax operating income was $28.1 million; that’s up 17%. But I will tell you; it’s the press versus our targets. We believe that the pretax operating margins, which used to be in the mid-20s, can get there again with better markets.

If you look at our institutional group revenues, our institutional brokerage revenues were $98 million up 8%. Equity brokerage revenues increased 18% to $52 million. Again, we have basically a month and a half of KBW in those numbers. Fixed income brokerage revenues declined slightly to $46 million.

Investment banking; our advisory fee revenues were $27 million, which was 74% higher than last year and 2% higher than in the fourth quarter. And as I said, even though we believe that deals were accelerated in the fourth quarter and I do believe that M&A was tepid, the fact is that we did add KBW and Miller Buckfire. So the numbers are not quite comparative.

I can tell you that we believe that the activity is picking up nicely in the second quarter and our pipeline is building and we are optimistic that M&A revenue will grow this year, but we see a lot of activity in the second half of the year based on our pipeline.

With respect to Miller Buckfire, as you know we completed the full merger with them at the end of the year and we are excited that Norma Corio joined us as Co-President along with Ken Buckfire, and I’m excited to acknowledge that.

Capital raising revenues $40 million is down 6%. The capital raising year-over-year comparison is really due both to a strong Q1, 2012, which simply has larger and more book managed deals. The first quarter this year was flat in terms of fees and on the growth side, in other words, our underwritten deals in growth companies was really flat. We did a lot more on yield deals. We completed generally just fewer deals this quarter and again though, when I look at our pipeline, I’m optimistic about that business, given receptive capital markets.

Looking at our capital structure, total assets $8 billion driven primarily by growth in the assets of Stifel Bank, along with our acquisitions, total capitalization; $2.4 billion book value per share came in at $30.13.

Looking at other financial data, total leverage ratio was 3.4%. That’s 2.1 at the broker dealer and 13.5 times at the bank, which is really how we are running our leverage. Most of the leverage is in the bank.

We were excited to welcome a team of 11 financial advisors in Bellevue, Washington and Portland right at the end of the quarter. They brought more than $1 billion in client assets. They have long standing relationships in the northwest and we’d like to continue to grow in that market.

Our marketing efforts are paying off and recruiting is active and the pipeline is building and recruiting. Full time associate is up 11%, which includes approximately 400 new partners from KBW and Miller Buckfire. And as of March 30, the end of the quarter, our total client assets were $147 billion, which was up 13% from last year.

In conclusion, we believe we’ve significantly added to our capabilities and we are well positioned to increase our institutional market share and continue to significantly grow our Global Wealth Management business. I’m excited about our KBW merger and the integration is going well.

As I previously stated, the first quarter revenues, if you had included KBW, it would have been $467 million. If you look at March, it would be $480 million and I again think that we have a nice start to the second quarter.

We are on track to complete the acquisition of the U.S. fixed income and the European trading team of Knight Capital Group. This is another growth opportunity we saw that increased our product mix with an established group of professionals.

Markets are at all time highs. I don’t think – I think this is the bull market that gets no respect. I think this market can’t continue to provide opportunities, but also be more conducive to the type of firm that we built over the last few years.

We’ve closed a lot of deals so far this quarter and we’re optimistic about the future.

I will now open the call for questions.

Question-and-Answer Session

Operator

(Operator Instructions) And your first question comes from David Trone. Your line is now open.

David Trone - JMP Securities

Hey Ron, how are you doing?

Ron Kruszewski

Good, David.

David Trone - JMP Securities

Thanks for taking my question. A couple of questions for you; this is very detailed as usual and I appreciate all the information. Can you maybe talk about something else? How does international expansion fit into your future growth plans?

Ron Kruszewski

Well, we’ve always had a presence in Europe, selling our U.S. equity research in Europe and that goes back to our acquisition or merger with Legg Mason Capital Markets. Since that time we’ve looked at the European expansion as almost an option. The KBW business at one time was quite robust, probably was operating more of a breakeven basis last year. I’m talking about Europe and not in Asia and so we looked at it as an opportunity to build on what we already had in Europe.

The Knight business, the European bond business with Knight we believe is quite profitable and so we now have some profitable scale in Europe and we’ll go on cautiously, but we see an opportunity to gain some market share there, especially with what we have with KBW, they are behind where we are in the United States and the restructuring of all of their banks, and we see some real opportunity there.

David Trone - JMP Securities

Okay. So if I can summarize that. So basically you have these three-foot holds in Europe and you think that might be a sufficient platform to at some point add on some additional opportunities?

Ron Kruszewski

Well look, I mean I think there are revenues. Our revenues in Europe are pro-forma, well in excess of $100 million, and-more than that and its profitable. So we’re not over there, losing money. We believe we have a profitable base with which we can add.

David Trone - JMP Securities

Okay, good. Thank you.

Ron Kruszewski

That was easy. It’s not like you. Next question? Are you done David?

Operator

And your next question comes from Chris Harris. Your line is now open.

Chris Harris - Wells Fargo Securities

Thanks a lot. Want to start out Ron with your comments on the revenue side of things. You did mention you guys were getting some synergies. I think when you’re putting KBW and Stifel together, and kind of just curious if you guys are seeing any attrition happening and particularly wondering if you are getting any attrition occurring on the commission side of the institutional business?

Ron Kruszewski

Well, you can see in the numbers that our flow business is up and the answer is that we have said that we will maintain a separate brand, a separate brand of research, and sales and trading, and I believe that that adds value to the marketplace and it’s been accepted. So we really have not seen the attrition on that side of the business. Certainly not what some of all of you have been predicting, but I’ve been pleased and it goes to their platform, which is a very specialized and very deep in the financial services.

Chris Harris - Wells Fargo Securities

Okay. Well, it sounds like the April number is really strong; KBW highlighted that. Is April similarly strong for the legacy Stifel business as well?

Ron Kruszewski

Yes, we’ve had a very nice start to the second quarter; that’s what I said. I don’t really want to get into projections Chris, but I’m pleased that our strategy of maintaining the brand for KBW is effective.

Chris Harris - Wells Fargo Securities

Okay, and then the question on the expenses. If we look at just the institutional business, it looks like your revenues went up quarter-over-quarter, but your comp actually went down quarter-over-quarter, and it just seems really odd to us that you’d have comp that was going down, while you’ve added employees from KBW and you’ve added employees from Miller Buckfire.

So if you can kind of elaborate a little bit on that and then kind of related to that question, your comp ratio is 61% in that segment and I think that’s the lowest it’s been in two years, and revenues are kind of probably below where you think they’d be. So maybe if you could talk a little bit about that, it would be great.

Ron Kruszewski

Well, I think you got to go back to a couple of years where the ratio was, the institutional group was in the high 50s, and as I said last year, we were making investments in this business, which was costing some money in the comp ratio.

I think that if you asked where our plan is for compensation expense in the segment, I would say that where it is today, which is for the quarter is 61%, is high. In terms of you don’t run the firm at 63% and a segment at 61% in the way we think about things. So part of it is, is that we did have record revenue and in this group, but it went from 63% to 61% and I don’t view that as significantly low.

Chris Harris - Wells Fargo Securities

Okay. So potentially more upside in that number then?

Ron Kruszewski

Yes.

Chris Harris - Wells Fargo Securities

Okay, all right. Real quick, last question for me and I’ll let others get in. On the Knight deal, can you guys give us a little color the revenue and margin you expect to get from that transaction?

Ron Kruszewski

Look, I plan to next quarter okay, when we close it. We are sort of – it works in between with what they closed. There’s another merger transaction going on and so I’d like to, I want to talk about it and I certainly, it’s not a huge material thing, but there is another merger going on and I’m mindful of what they’ve said and what they disclosed of revenues and so I’m just being quiet at this point. I intend to talk about what we think that does next quarter; it will close the end of the second quarter.

Chris Harris - Wells Fargo Securities

Okay Ron, understood. Thank you.

Chris Harris - Wells Fargo Securities

Thank you.

Operator

And your next question comes from Alex Blostein. Your line is now open.

Alexander Blostein – Goldman Sachs

Great, thanks. Good afternoon everybody. Maybe just a couple of questions in numbers. So you gave the pro forma revenue number for the quarter of KBW. Is it possible to get the expense number as well, so we kind of have apples to apples and if the franchise was kind of together for a full quarter, what the profitability would look like?

Ron Kruszewski

Well, what I’ve said is that on a core basis, there’s a lot of expenses as you know that go on in mergers, and there’s a lot of charge that they took. But as I’ve said, we believe and we’ve done a lot of work, that the core operating expenses for KBW is $60 million, and so if you want to work backwards, we had about say $7.5 million for half of a quarter and the another half would have been $7.5 million and you can do the math. But it is difficult just to – I don’t want to state numbers when they had also a lot of unusual expenses in their last month or quarter.

Alexander Blostein – Goldman Sachs

Well, but I guess you guys strip out merger related expenses and things like that. So there is I guess like a quarterly expense number for KBW with the sort of apples to apples. So what we should think about on a go forward basis. I’m just trying to think like for the 467 on the revenue side, what is the expense number associated with that?

Ron Kruszewski

Right. Well look, I think another way to look at it could have been that you could have added to our OpEx, $7.5 million to $8 million, plus the compensation expense that would go with that. So as you go back to our merger model, and this is pretty accurate, the comp expense, we view at about 58% and the core operating expenses are not duplicate of about $15 million a quarter.

Alexander Blostein – Goldman Sachs

Got you. All right, that’s helpful. And then I guess the outlook you gave on the core non-comp numbers, kind of like 107 to 110 run rate for the next couple of quarters with KBW on a full run rate basis. Are there any expense synergies that we should think about from here or the business kind of is what it is at this point. So aside from merger related things going away, there is really no incremental expense savings that will still come through?

Ron Kruszewski

As I’ve said, if you look at the OpEx number of 107 to 110, and then apply it against whatever revenue number that you want, to the extent that that number is over 20%, and it is, I have a firm belief that that to be efficient we should be running non-comp OpEx at 20% of net revenue.

And there’s a lot of things that we’ve been looking at and we have to do a better job, frankly on the expense side. We’ve done a lot of mergers, space is one of them. We went from no space to five locations in New York, and we have plans to consolidate there and in San Francisco and a lot of expenses that are going to come out.

So, I would say that what I’m trying to show is the ones, that’s where our run rate is today, but I believe that we can do better.

Alexander Blostein – Goldman Sachs

Okay. And I guess just one on the strategy. You made a couple of interesting points as far as flows coming back and just greater appetite for equities and you kind of make a point of that. You believe that we’re in the earlier innings of an equity cycle. Can you run us through I guess the rational of going out and buying a fixed income franchise at this point in the cycle for Knight?

Ron Kruszewski

Well, first of all, yes. I mean I’ll go through it. First of all we got it right. Second of all, it fills a significant need of the Knight. U.S. business is complimentary for loan sale, distressed, high-yield business, so we did not have a lot of capability and not a lot of overlap.

So that’s going to fit very nicely, but not only with our fixed income, but our equity strategy in the space. Obviously, you got equity convert, high preferred convert, high-yield to investment grade and we need this capability to compliment not only what we are doing on our fixed income offering but also for our equity platform.

So we viewed it as a great opportunity. It will be a nice addition in terms of revenue and we believe that we’ve modeled this to be profitable.

Alexander Blostein – Goldman Sachs

Got you. Great, thanks.

Ron Kruszewski

You’re welcome.

Operator

And your next question comes from David Stachnik. Your line is now open.

Unidentified Analyst

Hey Ron. Can you hear me?

Ron Kruszewski

Is this Stachnik?

Unidentified Analyst

Yes.

Ron Kruszewski

Hey, how are you?

Unidentified Analyst

How did book value go from $27 to $30?

Ron Kruszewski

Because we issued equity with respect to the KBW transaction above book, but in all fairness you also have to look at the fact that we increased goodwill and so…

Unidentified Analyst

That was the other aspect of it. So of the $30, how much goodwill is on the books right now?

Ron Kruszewski

Well, we have about – I don’t know that number exactly, but it’s somewhere in the $11, $11.5. I mean tangible book is – goodwill is $700 million. So what happened David is we priced the deal at 32. We had a collar, so we benefited up to 35, but when we closed the deal the stock was at 38. So that had the effect of both increasing equity and increasing goodwill. It’s on paper, but that’s what happened.

Unidentified Analyst

Thank you.

Ron Kruszewski

Glad to see you’re listening, Mr. Stachnik.

Unidentified Analyst

I always listen.

Ron Kruszewski

All right.

Unidentified Analyst

Good-bye.

Operator

And we have no further questions at this time. I’ll turn the call back to Mr. Kruszewski.

Ron Kruszewski

Well, I would like to take this opportunity to welcome our new partners from KBW and Miller Buckfire and our new partners from Knight and would like to just say that we look forward to our next earnings call and to show what we’ve built and what it can do, and what we’ve built and how it will perform in these markets.

So I’ll end with that and look forward to seeing and talking to everyone next quarter. Thank you very much.

Operator

And this concludes today’s conference call. You may now disconnect.

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