<SUBMISSION>
<ACCESSION-NUMBER>0000720672-01-500015
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20010630
<FILING-DATE>20010814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>STIFEL FINANCIAL CORP
<CIK>0000720672
<ASSIGNED-SIC>6211
<IRS-NUMBER>431273600
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-09305
<FILM-NUMBER>1712406
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE FINANCIAL PLAZA
<STREET2>501 N BROADWAY
<CITY>ST. LOUIS
<STATE>MO
<ZIP>63102-2102
<PHONE>314-342-2000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE FINANCIAL PLAZA
<STREET2>501 N BROADWAY
<CITY>ST. LOUIS
<STATE>MO
<ZIP>63102-2102
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>r10q-200106.htm
<DESCRIPTION>10 Q FOR PERIOD ENDING 6/30/2001
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY>
<B><FONT SIZE=4><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">WASHINGTON, D.C.  20549</P>
<P ALIGN="CENTER">FORM 10-Q</P>
</B></FONT>
<P>(Mark One)</P><DIR>
<DIR>

<FONT FACE="Wingdings" SIZE=4><P ALIGN="JUSTIFY">x</FONT><FONT SIZE=4>&#9;QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
</FONT><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">For the quarterly period ended <U>&#9;June 30, 2001&#9;</P>
</U><FONT SIZE=4><P ALIGN="CENTER">OR</P>
</FONT><FONT FACE="Wingdings" SIZE=4><P ALIGN="JUSTIFY">o</FONT><FONT SIZE=4>&#9;TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
</FONT><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">For the transition period from <U>&#9;</U> to <U>&#9;</P>
<P ALIGN="JUSTIFY"></P>
</U><P ALIGN="CENTER">Commission file number <U>&#9;1-9305&#9;</P>
<P ALIGN="CENTER"></P></DIR>
</DIR>
</U>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=384>
<TR><TD VALIGN="TOP">
<B><U><FONT SIZE=4><P ALIGN="CENTER">STIFEL FINANCIAL CORP.</B></U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Exact name of registrant as specified in its charter)</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<U><P ALIGN="CENTER"></P></U>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<U><P ALIGN="CENTER">DELAWARE</U></TD>
<TD WIDTH="50%" VALIGN="TOP">
<U><P ALIGN="CENTER">43-1273600</U></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(State or other jurisdiction of incorporation</P>
<P ALIGN="CENTER">or organization</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(I.R.S. Employer Identification No.)</FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<U><P ALIGN="CENTER">501 N. Broadway, St. Louis, Missouri</U></TD>
<TD WIDTH="50%" VALIGN="TOP">
<U><P ALIGN="CENTER">63102-2188</U></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Address of principal executive offices)</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">(Zip Code)</FONT></TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="58%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Registrant's telephone number, including area code</TD>
<TD WIDTH="42%" VALIGN="TOP">
<U><P ALIGN="CENTER">314-342-2000</U></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P>&#9;<U>&#9;</P>
</U><P ALIGN="CENTER">(Former name, former address, and former fiscal year,</P>
<P ALIGN="CENTER">if changed since last report)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">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 <FONT FACE="Wingdings">&#120;</FONT>
  No <FONT FACE="Wingdings">&#168;</FONT>
</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Shares of common stock outstanding at July 31, 2001: 7,371,539, par value $0.15.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><FONT SIZE=5><P ALIGN="CENTER"><A NAME="Index"></A>Stifel Financial Corp. And Subsidiaries</P>
</FONT><FONT SIZE=4><P ALIGN="CENTER">Form 10-Q Index</P>
<P ALIGN="CENTER">June 30, 2001</P>
<P ALIGN="CENTER"></P>
</B></FONT><P>&nbsp;</P>
<B><P>&#9;</P>
<FONT SIZE=4><P>PART I.  FINANCIAL INFORMATION                                                 </FONT><U>PAGE</P>
</U><FONT SIZE=4>
</B></FONT><P>Item 1. Financial Statements (Unaudited)</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Financial Condition --</P>
<P>&#9;&#9;June 30, 2001 and December 31, 2000</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">3</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Operations --</P>
<P>&#9;&#9;Six  Months Ended June 30, 2001 and June 30, 2000</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">4</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Operations --</P>
<P>&#9;&#9;Six  Months Ended June 30, 2001 and June 30, 2000</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">5</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>&#9;Consolidated Statements of Cash Flows--</P>
<P>&#9;&#9;Six Months Ended June 30, 2001 and June 30, 2000</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">6</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Notes to Consolidated Financial Statements</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">7 - 10</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Item 2.  Management's Discussion and Analysis of Financial Condition and </P>
<P>&#9;Results of Operations</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">11 -14</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Item 3.  Quantitative and Qualitative Disclosure about Market Risk</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">14</TD>
</TR>
</TABLE>


<B><FONT SIZE=4><P>PART II. OTHER INFORMATION</P>
</B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Item 1.  Legal Proceedings</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">14</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Item 6.  Exhibit(s) and Report(s) on Form 8-K</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">14</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Signatures</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">15</TD>
</TR>
</TABLE>


<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P><A NAME="Part_I"></A>PART I.  FINANCIAL INFORMATION</P><DIR>
<DIR>

<U><P ALIGN="JUSTIFY">Item 1. Financial Statements (Unaudited<FONT SIZE=4>)</P></DIR>
</DIR>

</U></FONT><FONT SIZE=2><P ALIGN="CENTER"><A NAME="Statements_of_Financial_Condition_1"></A>STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION</P>
</B><P ALIGN="CENTER">(In thousands, except par values and share amounts)</P>
</FONT><FONT SIZE=3><P>&#9;Unaudited&#9;Audited</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=4 WIDTH=691>
<TR><TD WIDTH="67%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">June 30, 2001</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">December 31, 2000</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<U><FONT SIZE=2><P>ASSETS</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Cash and cash equivalents</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$         13,530</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$         14,589</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Cash segregated for the exclusive benefit of customers</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">189</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">187</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Receivable from brokers and dealers</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">16,423</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">30,730</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Receivable from customers, net of allowance for doubtful receivables
 of $104 and $104, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">316,758</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">305,478</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Securities owned, at fair value</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">30,069</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,212</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Securities owned and pledged, at fair value</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">17,761</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,548</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Investments</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">31,474</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">32,478</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Membership in exchanges, at cost</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">463</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">463</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Office equipment and leasehold improvements, at cost, net of allowances for 		depreciation and amortization of $16,493 and $15,085, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">10,985</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">9,689</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Goodwill, net of accumulated amortization of $1,107 and $984, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,801</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">5,261</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Notes receivable from and advances to officers and employees, net of allowance for doubtful receivables from former employees of $328 and $331, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">22,384</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">17,420</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Deferred income tax</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,691</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,036</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Other assets</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">      <U>    15,662</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">      <U>    14,221</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;&#9;Total Assets</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>$483,190</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>$458,312</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<U><FONT SIZE=2><P>LIABILITIES AND STOCKHOLDERS' EQUITY</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">Liabilities</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Short-term borrowings from banks</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$     120,025</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$      88,250</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Payable to brokers and dealers</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">170,334</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">155,522</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Payable to customers</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">35,578</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">40,484</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Securities sold, but not yet purchased, at fair value</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,850</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,355</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Drafts payable</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11,217</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">19,034</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Accrued employee compensation</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11,654</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">19,500</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Obligations under capital leases</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,352</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,771</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Accounts payable and accrued expenses</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">14,258</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">20,620</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Long-term debt</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">10,000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">10,000</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">  24,598</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">  24,598</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;Total Liabilities</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>401,866</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>384,134</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Subordinated Debt</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,629</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">- -</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">Stockholders' Equity</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">

<FONT SIZE=2><P>Preferred stock -- $1 par value; authorized 3,000,000 shares;<BR>
none issued
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">- -  </FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">- -</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">

<FONT SIZE=2><P>Common stock -- $0.15 par value; authorized 30,000,000 shares; issued 7,675,781 and 7,525,971 shares, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">1,151</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<P ALIGN="RIGHT">1,129</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Additional paid-in capital</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">48,620</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">45,920</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Retained earnings</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">      <U>34,563</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">32,827</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">84,334</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">79,876</B></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>Less:</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Treasury stock, at cost, 304,550 and 297,879 shares, respectively</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,053</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,938</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Unamortized expense of restricted stock awards
</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">   85</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">  155</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Unearned employee stock ownership plan shares, at cost, 195,205 and 203,337 shares, respectively
</FONT></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">   2 ,501</U></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<U><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="RIGHT">      2,605</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;Total Stockholders' Equity</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">         <U>   78,695</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">  <U>    74,178</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;&#9;Total Liabilities and Stockholders' Equity</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>$483,190</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">      <U>$458,312</B></U></FONT></TD>
</TR>
</TABLE>
<DIR>
<DIR>
<DIR>

<FONT SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
</FONT><B><P ALIGN="CENTER"></P></DIR>
</DIR>
</DIR>

<P ALIGN="CENTER">STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER"> CONSOLIDATED STATEMENTS OF OPERATIONS</P>
</B><FONT SIZE=3><P ALIGN="CENTER">(UNAUDITED)</P>
<P ALIGN="CENTER"> (In thousands, except per share amounts)</P>
<P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=582>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="41%" VALIGN="TOP" COLSPAN=3>
<B><U><P ALIGN="CENTER">Three Months Ended</P>
<P ALIGN="CENTER">June 30, </B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT"> 2001</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<U><P>REVENUES</U></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Commissions</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">    $  18,498</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">    $  19,815</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Principal transactions</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    8,825</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    6,314</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Investment banking</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    7,667</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    5,381</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Interest</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    6,062</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    9,265</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Other</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT"> <U>     6,597</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>     7,167</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;Revenues</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">   47,649</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">   47,942</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Interest expense</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">     3,445</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<U><P ALIGN="RIGHT">     5,655</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;&#9;Net revenues</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">   44,204</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">   42,287</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<U><P>EXPENSES</U></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Employee compensation and benefits</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">        29,392</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">        27,880</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Occupancy and equipment rental</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    4,379</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    3,558</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Communications and office supplies</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;          2,751</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    2,744</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Commissions and floor brokerage</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;       829</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;       751</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Other operating expenses</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>    5,578</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>&#9;    3,494</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;    Total operating expenses</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>  42,929</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">     <U>&#9;  38,427</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<B><P> Income before income taxes</DIR>
</DIR>
</DIR>
</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    1,275</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    3,860</B></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Provision for income taxes</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">     <U>       481</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>     1,399</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;Net income </B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$      794</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$  2,461</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;Net income per share:</B></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Basic</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.11</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.35</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Diluted</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.10</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.32</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Dividends declared per share</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.03</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.03</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;Average common equivalent </P>
<P>&#9;    shares outstanding:</B></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Basic</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">          7,176</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">          7,015</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Diluted</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">          8,034 </B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">          7,610 </TD>
</TR>
</TABLE>


<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<FONT SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
</FONT><P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER"><A NAME="Statements_of_Operations"></A>STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER"> CONSOLIDATED STATEMENTS OF OPERATIONS</P>
</B><FONT SIZE=3><P ALIGN="CENTER">(UNAUDITED)</P>
<P ALIGN="CENTER"> (In thousands, except per share amounts)</P>
<P ALIGN="CENTER"></P></FONT>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=600>
<TR><TD WIDTH="61%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="39%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="CENTER">Six Months Ended</P>
<P ALIGN="CENTER">June 30, </B></U></TD>
</TR>
</TABLE>

<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=582>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT"> 2001</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<U><P>REVENUES</U></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Commissions</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">    $  38,973</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">    $  45,375</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Principal transactions</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    15,812</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    15,490</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Investment banking</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    15,883</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    7,635</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Interest</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    12,510</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    16,971</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Other</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">     <U>     12,958</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>     14,688</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;Revenues</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">        96,136</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">        100,159</B></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Interest expense</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">       7,084</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<U><P ALIGN="RIGHT">     10,035</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;&#9;Net revenues</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">     89,052</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">     90,124</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<U><P>EXPENSES</U></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Employee compensation and benefits</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">        59,772</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">        59,997</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Occupancy and equipment rental</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    8,526</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    7,022</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Communications and office supplies</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;          5,680</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;    5,240</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Commissions and floor brokerage</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;       1,784</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;       1,746</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Other operating expenses</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>    9,381</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>&#9;    7,173</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;    Total operating expenses</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>  85,143</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">     <U>&#9;  81,178</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<B><P>Income before income taxes</DIR>
</DIR>
</DIR>
</B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    3,909</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;    8,946</B></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Provision for income taxes</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">     <U>     1,541</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">     <U>     3,205</U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;&#9;Net income </B></TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$   2,368</B></U></TD>
<TD WIDTH="23%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$  5,741</B></U></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;Net income per share:</B></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Basic</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.33</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.82</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Diluted</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.30</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.76</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;Dividends declared per share</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$    0.06</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$    0.06</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<B><P>&#9;Average common equivalent </P>
<P>&#9;    shares outstanding:</B></TD>
<TD WIDTH="19%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="23%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Basic</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">          7,165</B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">          6,974</TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP">
<P>&#9;&#9;Diluted</TD>
<TD WIDTH="19%" VALIGN="TOP">
<B><P ALIGN="RIGHT">          8,012 </B></TD>
<TD WIDTH="23%" VALIGN="TOP">
<P ALIGN="RIGHT">          7,563 </TD>
</TR>
</TABLE>


<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<FONT SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
<B><P ALIGN="CENTER"><A NAME="Statements_of_Operations_2"><A NAME="Cash_Flow_1"></A></P>
</FONT><FONT FACE="Tms Rmn,Times New Roman"><P ALIGN="CENTER"></P>
</FONT><FONT SIZE=3><P ALIGN="CENTER">STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER"></A>CONSOLIDATED STATEMENTS OF CASH FLOWS</P>
</B><P ALIGN="CENTER">(UNAUDITED)(In thousands)</P><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR>
</FONT><B><FONT SIZE=2><P ALIGN="CENTER">&#9;<U>&#9;Six Months Ended&#9;</P></B></U></FONT></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=643>
<TR><TD WIDTH="55%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">June 30, 2001</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">June 30, 2000</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=2><P>CASH FLOWS FROM OPERATING ACTIVITIES</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>Net income </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;2,368</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;5,741</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<I><FONT SIZE=1><P>Noncash and nonoperating items included in earnings:</I></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Depreciation and amortization</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">2,051</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">1,558</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Bonus notes amortization</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">2,487</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">1,083</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Realized &amp; unrealized (gain)/losses </DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">1,023</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(296)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Deferred items</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">1,112</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">1,082</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>
<FONT SIZE=1><P>Amortization of restricted stock awards, units,
  and stock benefits</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="CENTER">
<B><FONT SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">858</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="CENTER">
<FONT SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">736</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">9,899</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">9,904</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=1><P>&#9;Decrease (increase) in assets:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Operating receivables</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">3,027</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(49,759)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Cash segregated for the exclusive benefit of customers</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(2)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(3)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Securities owned</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(23,070)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(1,120)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Notes receivable from officers and employees</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(7,451)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(3,208)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=20><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Other assets</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=20>
<B><FONT SIZE=1><P ALIGN="RIGHT">(1,691)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=20>
<FONT SIZE=1><P ALIGN="RIGHT">(920)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Increase (decrease) in liabilities:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Operating payables</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">9,906</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">30,282</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Securities sold, but not yet purchased</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(1,504)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">1,347</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Drafts payable, accrued employee compensation, and accounts payable and accrued expenses</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="CENTER">
<B><FONT SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">(19,360)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="CENTER">
<FONT SIZE=1><P ALIGN="RIGHT"></P>
<U><P ALIGN="RIGHT">(8,094)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=1><P>Cash Flows From Operating Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(30,246)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(21,571)</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=1><P><A NAME="Cash_Flow_2"></A>CASH FLOWS FROM INVESTING ACTIVITIES</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Proceeds from:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Cash received in acquisition of subsidiary </DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">-  -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">2,927</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Sale of investments</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">344</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">463</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Payments for:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Acquisition of office equipment and leasehold improvements</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(3,201)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(2,259)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Acquisition of investments</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(170)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=1><P ALIGN="RIGHT">(2,433)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=1><P>Cash Flows From Investing Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(3,027)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(1,302)</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=1><P>CASH FLOWS FROM FINANCING ACTIVITIES</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Short-term borrowings, net</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">31,775</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">22,785</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Proceeds from:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Issuance of stock  </DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">1,610</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">1,477</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Payments for:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Settlements of long-term debt</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">-  -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(370)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Purchase of stock for treasury</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(290)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(1,260)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Repayment of notes assumed in acquisition of subsidiary</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">-  -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(1,500)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Principal payments under capital lease obligation</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">(419)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">(289)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Cash dividends</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">(462)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=1><P ALIGN="RIGHT">(450)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=1><P>Cash Flows From Financing Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">32,214</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">20,393</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=16><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>(Decrease) increase in cash and cash equivalents</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=1><P ALIGN="RIGHT">(1,059)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=1><P ALIGN="RIGHT">(2,480)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<FONT SIZE=1><P>Cash and cash equivalents -beginning of period</DIR>
</DIR>
</DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">14,589</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=1><P ALIGN="RIGHT">16,861</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=1><P>Cash and Cash Equivalents -end of period</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">$&#9;13,530</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">$&#9;14,381</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=1><P>Supplemental disclosure of cash flow information:</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Income tax payments</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;2,793</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;1,676</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Interest payments</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;7,260</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;9,739</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=1><P>Schedule of noncash investing and financing activities:</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Employee stock ownership plan </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;94</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;86</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Acquisition of  Hanifen, Imhoff Inc.</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;-  -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;4,746</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Restricted stock awards and stock units, net of forfeitures</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;746</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9;2,549</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=1><P>&#9;Deferred compensation converted to subordinated borrowings</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=1><P ALIGN="RIGHT">$&#9;2,629</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=1><P ALIGN="RIGHT">$&#9; -  -</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
</FONT><B><P ALIGN="CENTER"><A NAME="Notes"></A></P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">NOTE A -REPORTING POLICIES</P></DIR>
</DIR>

<U><P ALIGN="JUSTIFY">Basis of Presentation</P>
</B></U><P ALIGN="JUSTIFY"> The consolidated financial statements include the accounts of Stifel Financial Corp. and its subsidiaries (collectively referred to as the "Company").  The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2001 are not necessarily indicative of the results that may be expected for the year ending December 31, 2001.  For further information, refer to the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.</P>
<P ALIGN="JUSTIFY">Where appropriate, prior year's financial information has been reclassified to conform to the current year presentation.</P>
<B><U><P ALIGN="JUSTIFY">Comprehensive Income</P>
</B></U><P ALIGN="JUSTIFY">The Company has no components of other comprehensive income, therefore comprehensive income equals net income.</P>
<B><P ALIGN="JUSTIFY">NOTE B - NET CAPITAL REQUIREMENT</P>
</B><P ALIGN="JUSTIFY">The Company's principal subsidiary, Stifel, Nicolaus &amp; Company, Incorporated ("SN &amp; Co."), is subject to the Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934, as amended (the "Rule"), which requires the maintenance of minimum net capital, as defined. SN &amp; Co. has elected to use the alternative method permitted by the Rule which requires maintenance of minimum net capital equal to the greater of $250,000 or 2 percent of aggregate debit items arising from customer transactions, as defined. The Rule also provides that equity capital may not be withdrawn and cash dividends may not be paid if resulting net capital would be less than 5 percent of aggregate debit items.</P>
<P ALIGN="JUSTIFY">At June 30, 2001, SN &amp; Co. had net capital of $31,432,440, which was 8.77% of its aggregate debit items, and $24,260,906 in excess of the minimum required net capital.</P>
<B><P ALIGN="JUSTIFY">NOTE C - FINANCIAL INSTRUMENTS</P>
</B><P ALIGN="JUSTIFY">The Company receives collateral in connection with securities borrowed transactions, customer margin loans and other loans. Under many agreements, the Company is permitted to sell or repledge these securities held as collateral and use these securities to enter into securities lending arrangements or deliver to counterparties to cover short positions. At June 30, 2001, the fair value of securities received as collateral where the Company is permitted to sell or repledge the securities was $434,480,000 and the fair value of the collateral that had been sold or repledged was $325,715,000. </P>
<P>&nbsp;</P>
<B><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">NOTE D -SEGMENT REPORTING</P>
</B><P ALIGN="JUSTIFY">The Company's reportable segments include private client, equity capital markets, fixed income capital markets and other. Prior years' financial information has been reclassified to conform with the current year presentation. The private client segment includes 72 branch offices and 120 independent contractor offices of the Company's broker-dealer subsidiaries located throughout the U.S., primarily in the Midwest. These branches provide securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance, to their private clients. The Equity Capital Markets segment includes corporate finance management and participation in underwritings (exclusive of sales credits, which are included in the Private Client Group segment), mergers and acquisitions, institutional sales, trading, research, and market making. Fixed Income Capital Markets segment includes public finance, institutional sales, and competitive underwriting and trading. Investment advisory fees, clearing income and venture capital activities are included in Other.</P>
<P ALIGN="JUSTIFY">Intersegment net revenues and charges are eliminated between segments. The Company evaluates the performance of its segments and allocates resources to them based on various factors, including prospects for growth, return on investment, and return on revenues.</P>
<P ALIGN="JUSTIFY">Information concerning operations in these segments of business is as follows (in thousands):</P>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=616>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P>Three Months Ended June 30,</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">2001</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="CENTER">2000</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Net Revenues</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=13>
<B><FONT SIZE=2><P ALIGN="RIGHT">$ &#9;31,879</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=13>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;31,961</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">5,290</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,492</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">5,351</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,610</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">1,684</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">3,224</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">&#9;Total Net Revenues</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$ &#9;44,204</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;42,287</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Operating Contribution</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;3,634</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;6,368</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">335</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">173</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">1,972</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(1,002)</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(367)</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P>        Total Operating Contribution</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">4,939</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">6,182</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Unallocated Overhead</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(3,664)</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,322)</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">        Pre-Tax Income</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 1,275</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;3,860</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P>Six Months Ended June 30,</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">2001</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">2000</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Net Revenues</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=13>
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=13>
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;64,247</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP" HEIGHT=13>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;70,198</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">11,088</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8,374</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">10,051</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,427</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">3,666</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">7,125</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">&#9;Total Net Revenues</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 89,052</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;90,124</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Operating Contribution</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="20%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;7,607</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;14,474</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">1,572</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">175</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">3,385</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(185)</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(1,681)</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">361</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P>        Total Operating Contribution</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">10,883</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">14,825</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Unallocated Overhead</FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(6,974)</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(5,879)</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">        Pre-Tax Income</B></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 3,909</B></U></FONT></TD>
<TD WIDTH="20%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;8,946</B></U></FONT></TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY">The Company has not disclosed asset information by segment, as the information is not produced internally and its preparation is impracticable.</P>
<B><P ALIGN="JUSTIFY">NOTE E -EARNINGS PER SHARE ("EPS")</P>
</B><P ALIGN="JUSTIFY">Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding. Diluted EPS is similar to basic EPS but adjusts for the effect of potential common shares.</P>
<P ALIGN="JUSTIFY"> The components of the basic and diluted earnings per share calculation for the three and six months ended June 30, are as follows (in thousands, except per share amounts): </P>
<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=624>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">&#9;Three Months Ended June 30,</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="CENTER">2001</B></U></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="CENTER">2000</B></U></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><I><U><P ALIGN="JUSTIFY">Income Available to Common Stockholders</B></I></U></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">Net Income</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 794</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 2,461</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><I><U><P ALIGN="JUSTIFY">Weighted Average Shares Outstanding</B></I></U></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">Basic Weighted Average Shares Outstanding:</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,176</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">7,015</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<P>Potential Common Shares From Employee Benefit Plans</DIR>
</DIR>
</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">     858</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">595</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>  Diluted Weighted Average Shares Outstanding</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">  8,034</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">7,610</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>Basic Earnings Per Share</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT"> $ 0.11</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 0.35</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>Diluted Earnings Per Share</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT"> $ 0.10</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 0.32</TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=624>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">&#9;Six Months Ended June 30,</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="CENTER">2001</B></U></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="CENTER">2000</B></U></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><I><U><P ALIGN="JUSTIFY">Income Available to Common Stockholders</B></I></U></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">Net Income</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 2,368</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 5,741</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><I><U><P ALIGN="JUSTIFY">Weighted Average Shares Outstanding</B></I></U></TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><P ALIGN="JUSTIFY">Basic Weighted Average Shares Outstanding:</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,165</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">6,974</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<P>Potential Common Shares From Employee Benefit Plans</DIR>
</DIR>
</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">     847</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">589</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>  Diluted Weighted Average Shares Outstanding</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">  8,012</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">7,563</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>Basic Earnings Per Share</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT"> $ 0.33</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 0.82</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP"><DIR>
<DIR>

<B><P>Diluted Earnings Per Share</DIR>
</DIR>
</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT"> $ 0.30</B></TD>
<TD WIDTH="17%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 0.76</TD>
</TR>
</TABLE>

<B><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">NOTE F - SUBSEQUENT EVENTS</P>
</B><P ALIGN="JUSTIFY">On July 25, 2001, the Company's Board of Directors declared a regular quarterly cash dividend of $0.03 per share, payable on August 23, 2001 to stockholders of record as of the close of business on August 9, 2001.</P>
<P ALIGN="JUSTIFY">At the April 25, 2001 Annual Meeting, stockholders approved the proposal to increase the total number of authorized shares of stock from 13,000,000 to 33,000,000 and to increase the authorized number of shares of Common Stock from 10,000,000 to 30,000,000.</P>
<B><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">NOTE G - RECENT ACCOUNTING PRONOUNCEMENTS</P>
</B><P ALIGN="JUSTIFY">In September 2000, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."  This standard replaces SFAS No. 125 of the same name and rescinds SFAS No. 127, "Deferral of Effective Date of Certain Provisions of FASB Statement No. 125." SFAS No. 140 provides accounting and reporting standards for transfer and servicing of financial assets and extinguishments of liabilities. The Company adopted SFAS No. 140 in the fourth quarter of 2000 for the disclosures regarding securitization transactions and collateral. The remaining provisions of SFAS No. 140 were adopted in the second quarter of 2001 for transfers and servicing of financial assets and extinguishments of liabilities and did not have a material impact on the Company's consolidated financial statements.</P>
<P ALIGN="JUSTIFY">In July 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that all business combinations be accounted for under the purchase method. The statement further requires separate recognition of intangible assets that meet certain criteria. The statement applies to all business combination initiated after June 30, 2001. </P>
<P ALIGN="JUSTIFY">SFAS No. 142, which is effective for fiscal periods beginning after December 15, 2001, requires that an intangible asset that is acquired shall be initially recognized and measured based on its fair value. The statement also provides that goodwill and other indefinite lived intangible assets should not be amortized, but shall be tested for impairment annually, or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. Existing goodwill and other indefinite lived intangible assets will continue to be amortized through the remainder of fiscal 2001 at which time amortization will cease and the Company will perform a transitional impairment test. Amortization expense related to goodwill and other indefinite lived intangible assets for the three-month and six-month periods ended June 30, 2001 were approximately $62,000 and $123,000, respectively. The Company is evaluating the impact of this pronouncement as it relates to the transitional and annual assessments for impairment of recorded goodwill and other indefinite lived intangibles on the Company's financial statements.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<FONT SIZE=5><P ALIGN="CENTER">******</P>
<B><U><P ALIGN="JUSTIFY"></P><DIR>
<DIR>

</FONT><FONT SIZE=4><P ALIGN="JUSTIFY"><A NAME="MDA"></A>Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations</P>
</FONT><FONT FACE="Tms Rmn,Times New Roman" SIZE=4><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">Forward-Looking Statements</P>
</B></U></FONT><P ALIGN="JUSTIFY">The Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Company and those specific to the industry which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory actions, changes in legislation and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this Quarterly Report. The Company does not undertake any obligation to publicly update any forward-looking statements.</P>
<B><U><FONT FACE="Tms Rmn,Times New Roman" SIZE=4><P ALIGN="JUSTIFY">Business Environment</P>
</B></U></FONT><P ALIGN="JUSTIFY">Investor confidence in the stock market continued to erode as indicated by the volatility in the major market indices, particularly the technology stock based NASDAQ composite. The NASDAQ composite began 2001 at 2273, down 43% from the previous year start of 3990, and dropped to the current year low of 1620 on April 4,2001 and by June 30,2001 had returned to 2161.  Another major index, the Dow Jones Industrial Average, showed a similar trend beginning the year at 10788 and falling to a low of 9389 in March, rebounding to 11301 in May and closing the first half at 10502.  As a result the Company's average trading volume in listed and over the counter equity products declined 9% and 16%, respectively, in the first half of 2001. </P>
<B><U><FONT FACE="Tms Rmn,Times New Roman" SIZE=4><P ALIGN="JUSTIFY">Results of Operations</P>
</B></U></FONT><P ALIGN="JUSTIFY">The following table summarizes the changes in the major categories of revenue and expense for the three and six months ended June 2001 as compared to June 2000 </P>
<P ALIGN="RIGHT"><TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=564>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="RIGHT"></TD>
<TD WIDTH="50%" VALIGN="TOP" COLSPAN=5>
<U><P ALIGN="CENTER">Three Months Ended // Six Months Ended</U></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=20>
<FONT SIZE=2><P ALIGN="CENTER">(Dollars in thousands)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=20>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Amount</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Percentage</B></U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=20>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Amount</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=20>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Percentage</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<B><U><FONT SIZE=2><P>REVENUES:</B></U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Commissions</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">$      (1,317)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(7)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">$      (6,402)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(14)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Principal transactions</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2,511</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">40%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">322</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Investment banking</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2,286</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">43%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">8,248</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">108%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Interest</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(3,202)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(35)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(4,461)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(26)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(571)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(8)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(1,730)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(12)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=18>
<B><FONT SIZE=2><P>          Revenues</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">(293)</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(7)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">(4,023)</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(4)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Interest Expenses</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(2,210)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(39)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(2,951)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(29)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<B><FONT SIZE=2><P>         Net Revenues</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=2><P ALIGN="RIGHT">1,917</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(5)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=2><P ALIGN="RIGHT">(1,072)</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(1)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<B><U><FONT SIZE=2><P>EXPENSES:</B></U></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Employee compensation and benefits</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">1,512</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">5%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(225)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(1)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Occupancy and equipment rental</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">821</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">23%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">1,504</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">21%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Communications and office supplies</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">7</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">1%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">440</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">8%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Commissions and floor brokerage</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">78</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">10%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">38</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=17>
<FONT SIZE=2><P>Other operating expenses</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2,084</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">60%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2,208</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">31%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" COLSPAN=2 HEIGHT=18><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">4,502</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">12%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">3,965</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">5%</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
</FONT><B><I><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Six months ended June 2001 as compared to six months ended June 2000</P>
</B></I><P ALIGN="JUSTIFY">The Company recorded net earnings of $2.4 million or $0.30 per diluted share on total revenues of $96.1 million for the six months ended June 30, 2001 compared to net earnings of $5.7 million or $0.76 per diluted share on total revenues of $100.2 million for the same period one year earlier.</P>
<P ALIGN="JUSTIFY">Total revenues decreased $4.0 million (4%) resulting from decreases in commissions, interest revenues and other revenues which decreased $6.4 million (14%), $4.5 million (26%), and $1.7 million (12%) respectively, offset by an increase in principal transactions and investment banking of $322,000 (2%), and $8.2 million (108%).</P>
<P ALIGN="JUSTIFY">Revenues from commissions on sales of over-the-counter, listed equities, insurance and mutual funds decreased principally due to declining markets conditions referred to above.</P>
<P ALIGN="JUSTIFY">Interest revenues declined as a result of decreased average borrowings by customers, and decreased stock borrow activities. </P>
<P ALIGN="JUSTIFY">Other revenues decreased principally due to current year write downs of approximately $1,021,000 of the Company's investment portfolio offset by receipt of death benefit proceeds of $520,000 from an insurance policy compared to an approximate $499,000 unrealized gain recorded in the investment portfolio and receipt of $550,000 in death benefit proceeds from an insurance policy in the prior year first half. </P>
<P ALIGN="JUSTIFY">      Investment banking revenues increased principally due to an increase in corporate finance revenue of $2.6 million (60%) and an increase in municipal finance revenue of $4.3 million (164%). The Company lead managed ten equity offerings and completed two private placements during the first half of 2001. Bond market activity improved coincidental to the addition of a new public finance office opened in Brookfield, Wisconsin, in mid-year 2000.</P>
<P ALIGN="JUSTIFY">Total expenses increased $1.0 million (1%) for the first half of 2001 compared to the same period one year earlier. Decreases in employee compensation and benefits, and interest expense, were offset by increases in commission and floor brokerage, communications and office supplies, occupancy and equipment rental, and other operating expenses. Despite the poor market conditions the Company continued its expansion of its Private Client Group. Since June 30, 2000, the Company opened 14 Private Client branch offices, and recruited 136 investment executives and 26 independent contractors for net increases of 14%, 15% and 4% over the prior year first half. </P>
<P ALIGN="JUSTIFY">Employee compensation and benefits, a significant portion of the Company's total expense, decreased $225,000 (1%) in the first six months of 2001 compared to the prior year first half. The decrease in the variable component of compensation of $2.2 million (5%) declined with the decreases in revenues and profitability. The offsetting increase in fixed compensation of  $2.0 million (12.8%) resulted from the Company's expansion activities.</P>
<P ALIGN="JUSTIFY">Communication and office supplies and occupancy and equipment rental increased $440,000 (8%) and $1.5 million (21%), respectively over the prior year first half due to the company's expansion activities</P>
<P ALIGN="JUSTIFY">Interest expense decreased $2.9 million (29%) due to decreased borrowings by the Company to finance customer margin.   </P>
<P ALIGN="JUSTIFY">Other operating expenses increased $2.2 million (31%) over the prior year first half due to the Company's expansion activities and approximately $1.3 million in legal related expenses incurred in the second quarter of 2001 primarily in connection with historical litigation arising out of the Company's former Oklahoma operations.</P>
<B><U><FONT SIZE=4><P ALIGN="JUSTIFY"></P>
</U></FONT><I><FONT FACE="Tms Rmn,Times New Roman"><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Three months ended June 2001 as compared to three months ended June 2000</P>
</B></I></FONT><P ALIGN="JUSTIFY">     The Company recorded net earnings of $794,000 or $0.10 per diluted share on total revenues of $47.6 million for the second quarter ended June 30, 2001 compared to net earnings of $2.5 million or $0.32 per diluted share on total revenues of $47.9 million for the same period one year earlier. </P>
<P ALIGN="JUSTIFY">      Principal transactions increased $2.5 million (40%) in the second quarter due principally to an increase in sales of fixed income products as investors sought alternatives to equity products and the opening of two additional trading desks for tax exempt fixed income products.</P>
<P ALIGN="JUSTIFY">      Other revenues decreased $571,000 (8%) due to the write down in the Company's investment portfolio in the current year of approximately $576,000.</P>
<P ALIGN="JUSTIFY">      Employee compensation and benefits increased $1.5 million (5%) principally due to increased variable compensation resulting from increased commissions on principal transactions and increased salaries resulting from the company's expansion efforts offset by decreased profitability and production bonuses.</P>
<P ALIGN="JUSTIFY">     The explanation of revenue and expense fluctuations for the remaining categories presented for the six month period are generally applicable to the three month operations<B><U><FONT FACE="Tms Rmn,Times New Roman" SIZE=4> </P>
<P ALIGN="JUSTIFY">Liquidity and Capital Resources</P>
</B></U></FONT><P ALIGN="JUSTIFY">The majority of the Company's assets are highly liquid, consisting mainly of cash or assets readily convertible into cash. These assets are financed primarily by the Company's equity capital, customer credit balances, short-term bank loans, proceeds from securities lending, long term notes payable, and other payables. Changes in securities market volumes, related customer borrowing demands, underwriting activity, and levels of securities inventory affect the amount of the Company's financing requirements. </P>
<P ALIGN="JUSTIFY">During the first six months of 2001, the Company repurchased 24,349 shares, using existing board authorizations, at an average price of $11.89 per share, to meet obligations under the Company's employee benefit plans. </P>
<P ALIGN="JUSTIFY">Management believes the funds from operations, available informal short-term credit arrangements, and long-term borrowings, at June 30, 2001, will provide sufficient resources to meet the present and anticipated financing needs.</P>
<P ALIGN="JUSTIFY">Stifel, Nicolaus &amp; Company, Incorporated, the Company's principal broker-dealer subsidiary, is subject to certain requirements of the Securities and Exchange Commission with regard to liquidity and capital requirements. At June 30, 2001, Stifel, Nicolaus had net capital of approximately $31.4 million which exceeded the minimum net capital requirements by approximately $24.3 million.</P>
<P ALIGN="JUSTIFY"></P>
<B><U><FONT FACE="Tms Rmn,Times New Roman" SIZE=4><P ALIGN="JUSTIFY">Recent Accounting Pronouncements</P>
</B></U></FONT><P ALIGN="JUSTIFY">In September 2000, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."  This standard replaces SFAS No. 125 of the same name and rescinds SFAS No. 127, "Deferral of Effective Date of Certain Provisions of FASB Statement No. 125." SFAS No. 140 provides accounting and reporting standards for transfer and servicing of financial assets and extinguishments of liabilities. The Company adopted SFAS No. 140 in the fourth quarter of 2000 for the disclosures regarding securitization transactions and collateral. The remaining provisions of SFAS No. 140 were adopted in the second quarter of 2001 for transfers and servicing of financial assets and extinguishments of liabilities and did not have a material impact on the Company's consolidated financial statements.</P>
<P ALIGN="JUSTIFY">In July 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that all business combinations be accounted for under the purchase method. The statement further requires separate recognition of intangible assets that meet certain criteria. The statement applies to all business combination initiated after June 30, 2001. </P>
<P ALIGN="JUSTIFY">SFAS No. 142, which is effective for fiscal periods beginning after December 15, 2001, requires that an intangible asset that is acquired shall be initially recognized and measured based on its fair value. The statement also provides that goodwill and other indefinite lived intangible assets should not be amortized, but shall be tested for impairment annually, or more frequently if circumstances indicate potential impairment, through a comparison of fair value to its carrying amount. Existing goodwill and other indefinite lived intangible assets will continue to be amortized through the remainder of fiscal 2001 at which time amortization will cease and the Company will perform a transitional impairment test. Amortization expense related to goodwill and other indefinite lived intangible assets for the three-month and six-month periods ended June 30, 2001 were approximately $62,000 and $123,000, respectively. The Company is evaluating the impact of this pronouncement as it relates to the transitional and annual assessments for impairment of recorded goodwill and other indefinite lived intangibles on the Company's financial statements.</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<B><U><FONT SIZE=4><P ALIGN="JUSTIFY"><A NAME="PartI_Item3"></P>
<P ALIGN="JUSTIFY">Item 3. Quantitative and Qualitative Disclosure about Market Risk</P></DIR>
</DIR>

</B></U></FONT><P ALIGN="JUSTIFY"></A>&#9;There have been no material changes from the information provided in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.</P>
<B><FONT SIZE=4>
<P>&nbsp;</P>
<P>PART II. OTHER INFORMATION</P>
</B></FONT>
<B><U><P><A NAME="Item1">Item 1. Legal Proceedings</P>
</B></U><P ALIGN="JUSTIFY"></A>There have been no material changes in the legal proceedings previously reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Such information is hereby incorporated by reference.</P>
<P ALIGN="JUSTIFY"><A NAME="Item6">&#9;</P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Item 6. Exhibit(s) and Report(s) on Form 8-K</P>
<OL TYPE="a">

</U><P ALIGN="JUSTIFY"><LI></A></B><U>Exhibits</U>: See Exhibit Index, hereof.</LI></P>
<U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Report(s) on Form 8-K</LI></P></OL>
<DIR>

</U><P ALIGN="JUSTIFY">There were no reports on Form 8-K filed during the quarter ended June 30, 2001. </P>
<STRIKE></DIR>

</STRIKE><B><U><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER"><A NAME="Signatures"></A>SIGNATURES</P>
</B></U>
<U><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</U><P ALIGN="JUSTIFY">Pursuant to the requirement of Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
<P ALIGN="CENTER">(Registrant)</P>
<P ALIGN="JUSTIFY"></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Date: August 14, 2001</TD>
<TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">By <U>&#9;/s/ Ronald J. Kruszewski&#9;</P>
</U><P>Ronald J. Kruszewski <BR>
(President and Chief Executive Officer)</P>
<P ALIGN="JUSTIFY"></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Date: August 14, 2001</TD>
<TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">By <U>&#9;/s/ James M. Zemlyak&#9;</P>
</U><P>James M. Zemlyak <BR>
(Principal Financial and Accounting Officer)</P>
<P ALIGN="JUSTIFY"></TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
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<U><P ALIGN="JUSTIFY">&nbsp;</P>
</U><STRIKE><P ALIGN="JUSTIFY">&nbsp;</P>
</STRIKE><B><FONT SIZE=4><P ALIGN="CENTER"><A NAME="Exhibit_Index"></A>STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
</FONT><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">EXHIBIT INDEX</P>
<FONT SIZE=4><P ALIGN="CENTER">June 30, 2001</P>
</B></FONT><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></U>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="CENTER">Exhibit</P>
<U><P ALIGN="CENTER">Number</U></TD>
<TD WIDTH="85%" VALIGN="TOP">
<U><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">Description</U></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="CENTER">3. (a)</TD>
<TD WIDTH="85%" VALIGN="TOP"><DIR>

<P>Amendment to Restated Certificate of Incorporation of Stifel Financial Corp. filed with the Secretary of State of Delaware on May 31, 2001, filed herewith.</DIR>
</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="CENTER">10. (a)</TD>
<TD WIDTH="85%" VALIGN="TOP"><DIR>

<P>Amendment of Loan Agreement with Western &amp; Southern Life Insurance Company dated February 24, 1999, filed herewith.</DIR>
</TD>
</TR>
</TABLE>

<U><P ALIGN="JUSTIFY"></P>
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</FONT><P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;</P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>3
<FILENAME>rex310q.htm
<DESCRIPTION>EX 3.(A) AMENDMENT TO RESTATED CERT OF INCORPORATI
<TEXT>
<HTML>
<HEAD>
<TITLE>STIFEL FINANCIAL CORP</TITLE>
</HEAD>
<BODY>

<B><FONT SIZE=4><P ALIGN="CENTER">STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">EXHIBIT 3. (a)</P>
<P ALIGN="CENTER"></P>
</FONT><FONT SIZE=4><P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">RESTATED CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
</B><P ALIGN="CENTER"></P>
</FONT><P ALIGN="JUSTIFY">&#9;Pursuant to the provisions of the General Corporation Law of the State of Delaware, Stifel Financial Corp. certifies the following:</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;<B>FIRST</B>:  That the Board of Directors of Stifel Financial Corp. adopted the following resolution setting forth a proposed amendment of the Restated Certificate of Incorporation of said corporation, declaring said amendment to be advisable and directing that said amendment be considered at the 2001 Annual Meeting of Stockbrokers of said corporation held on April 15, 2001.  The resolution setting forth the proposed amendment is as follow:</P>
<P ALIGN="JUSTIFY">&#9;&#9;RESOLVED, that the fourth article of the Certificate of Incorporation of the Company shall be amended to increase the total number of shares of stock authorized for issuance from 13,000,000 to 33,000,000 and to increase the number of shares of common stock $.15 par value per share, authorized for issuance from 10,000,000 to 30,000,000, by deleting the first paragraph of the fourth article in its entirety and replacing it with the following:</P>
<P ALIGN="JUSTIFY"></P><DIR>
<DIR>
<DIR>
<DIR>

<P ALIGN="JUSTIFY">A.&#9;The aggregate shares of all class of stock which the Corporation shall have authority to issue is Thirty-Three Million (33,000,000) shares, consisting of Three Million (3,000,000) shares of preferred stock of the par value of One Dollar ($1.00) each (hereinafter called the "Preferred Stock") and Thirty Million (30,000,000) shares of common stock of the par value of Fifteen Cents ($0.15) each (hereinafter called the "Common Stock).</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P></DIR>
</DIR>
</DIR>
</DIR>

<B><P ALIGN="JUSTIFY">SECOND</B>:  That thereafter, pursuant to the direction of the Board of Directors, the 2001 Annual Meeting of Stockholders of the corporation was duly called and held on April 15, 2001, at which meeting more than a majority of the outstanding stock entitled to vote thereon was voted in favor of the amendment.</P>
<B><P ALIGN="JUSTIFY">THIRD</B>:  That said Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.</P>
<B><P ALIGN="JUSTIFY">IN WITNESS WHEREOF</B>, the undersigned has executed this instrument on behalf of the corporation this 7<SUP>th</SUP> day of May 2001.</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=367>
<TR><TD WIDTH="15%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">By:</FONT></TD>
<TD WIDTH="85%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="JUSTIFY">/s/ Ronald J. Kruszewski</U> </P>
<P ALIGN="JUSTIFY">Ronald J. Kruszewski</P>
<P ALIGN="JUSTIFY">&#9;President and Chief Executive Officer</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">RESTATED CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF </P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><P ALIGN="JUSTIFY">&#9;STIFEL FINANCIAL CORP., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended, DOES HEREBY CERTIFY:</P>
<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;FIRST:  That the Board of Directors of STIFEL FINAINCIAL CORP. has duly adopted the following resolution setting forth a proposed amendment to the Restated Certificate in Incorporation of said Corporation and declaring said amendment advisable and directing that said proposed amendment be considered at the 1989 Annual Meeting of Stockbrokers of said Corporation held on November 28, 1989:</P>
<P ALIGN="JUSTIFY">&#9;RESOLVED that the Board of Directors of the Corporation deems advisable that the Restated Certificate of Incorporation of the Corporation be amended by adding a new Article Ninth as follows:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY"> "NINTH:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;A.&#9;The Board of Directors shall be divided into three classes, as nearly equal in number as reasonably possible, except that one class may be one greater or one less in number than the other two classes.  At the annual meeting of stockholders to be held in 1989, the directors of one class shall be elected for a term of one year, the directors of another class shall be elected for a term of two years, and the directors of the third class shall be elected for a term of three years, and in each case, until their respective successors shall have been elected and qualified in the class to which such director is assigned or until their earlier death, resignation and removal.  At each annual meeting of stockholders thereafter, the successors of the directors of the class whose term expires in that year shall be elected to hold office for a term of three years (and until their respective successors shall have been elected and qualified in such class or until their earlier death, resignation or removal), so that the term of one class of directors shall expire in each year.  In the case of any vacancies, by reason of an increase in the number of directors or resignation or otherwise, directors to fill such vacancies may be elected by a majority of the directors then in office, to hold office until the next election of the class for which such directors shall have been chosen, and until their respective successors shall have been elected and qualified in the class to which such director is assigned or until their earlier death, resignation or removal.  No decrease in the number of directors shall shorten the term of any incumbent director.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">B.&#9;Notwithstanding anything in the Restated Certificate of Incorporation or By-Laws of the Corporation to the contrary, whenever the holders of any one or more classes or series of shares of capital stock of the Corporation other than shares of Common Stock shall have the right, voting separately by class or series, to elect directors, the election, term of office, filling of vacancies and other features of such directorship shall be governed by the terms of the Restated Certificate of Incorporation of the Corporation or any Certificate of Designation thereunder applicable thereto; and such directors so elected shall not be divided into classes pursuant to this Article Ninth unless expressly provided by such terms.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">C.&#9;This Article Ninth may be altered, amended or repealed only by vote of the holders of eighty percent of the issued and outstanding shares of the Corporation's stock entitled to vote generally for the election of directors, unless such alteration, amendment or repeal has been recommended by three-fourths of the directors then in office." </P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

</FONT><P ALIGN="JUSTIFY">&#9;SECOND:  That thereafter, pursuant to the direction of the Board of Directors of the Corporation, the 1989 Annual Meeting of Stockholders of said Corporation was duly called and held on November 28, 1989, at which meeting more than a majority of the outstanding stock entitled to vote thereon was voted in favor of Amendment.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;THIRD:  That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of Delaware.</P>
<P ALIGN="JUSTIFY">&#9;IN WITNESS WHEREOF, said STIFEL FINANCIAL CORP. has caused its corporate seal to be hereunto affixed and this certificate to be signed by George H. Walker III, its president and John J. Goebel, its secretary this 28<SUP>th</SUP> day of November, 1989.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">(SEAL)</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;STIFEL FINANCIAL CORP.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">ATTEST:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="JUSTIFY">/s/ John J. Goebel&#9;</U></FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="JUSTIFY">/s/ George H. Walker III</U></FONT></TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">John J. Goebel, Secretary</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">George H. Walker III, President</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS</P>
<P ALIGN="CENTER">OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK</P>

<P ALIGN="CENTER">of</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
<P ALIGN="CENTER"></P>
</B><P ALIGN="CENTER">Pursuant to Section 151 of the General Corporation Law</P>
<P ALIGN="CENTER">of the State of Delaware</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
</FONT><B><I><FONT SIZE=4><P ALIGN="JUSTIFY">&#9;We, GEORGE H. WALKER III, President and Chief Executive Officer, and JOSEPH C. ZINGRICH, Assistant Secretary, of Stifel Financial Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:</P>
</B></I></FONT><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;That pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Company, the said Board of Directors on June 30, 1989, adopted the following resolution crating a series of One Hundred Thousand (100,000) shares of Preferred Stock designated as Series A Junior Participating Preferred Stock:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;RESOLVED, that pursuant to the authority vested in the Board of Directors of the Company in accordance with the provisions of its Certificate of Incorporation, as amended, a series of Preferred Stock of the Company be an it hereby is created, and that the designation and amount thereof and the powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 1.&#9;<U>Designation and Amount.</U>  </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">There shall be a series of the preferred stock of the Company which shall be designated as the "Series A Junior Participating Preferred Stock," par value $1.00 per share, and the number of shares constituting such series shall be 100,000.  Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Junior Participating Preferred Stock to a number less than that of the shares then outstanding plus the number of shares issuable upon exercise of outstanding rights, options or warrants or upon conversion of outstanding securities issued by the Company.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 2.&#9;<U>Dividends and Distributions.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Subject to the prior and superior rights of the holders of any shares of any series of preferred stock of the Company ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock, in preference to the holders of shares of Common Stock, $.15 par value (the "Common Stock"), of the Company and any other junior stock, shall be entitled to receive, when as and if declared by the Board of Directors out of funds legally available for the purpose, subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such amount by a fractions the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 3.&#9;<U>Voting Rights.</P>
</U><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">&#9;The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<OL TYPE="A">

<OL TYPE="A">

<P ALIGN="JUSTIFY"><LI>Each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to one hundred votes on all matters submitted to a vote of the stockholders of the Company.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Company.  In the event the Company shall at any time after the Rights Declaration Date (i) declare or pay any dividend on Common Stock, payable in shares of Common Stock, or (ii) effect a subdivision or combination of the outstanding shares of Common Stock (y reclassification or otherwise) into a greater or lesser number of shares of Common Stock, into a smaller number of shares, then in each such se the number of votes to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">Section 4.&#9;<U>Certain Restrictions.</P>
</U><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;(A)&#9;Whenever dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Company shall not:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="i">

<OL TYPE="i">

</FONT><P ALIGN="JUSTIFY"><LI>declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;</LI></P>
<P ALIGN="JUSTIFY"><LI>declare or pay dividends  on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;</LI></P>
<P ALIGN="JUSTIFY"><LI>except as permitted in Section 4(A)(iv) below, redeem or purchase of otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of such parity stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; and</LI></P>
<P ALIGN="JUSTIFY"><LI>purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking in parity with the Series A Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">B.&#9;The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase of otherwise acquire such shares at such time and in such manner.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Section 5.&#9;<U>Reacquired Shares.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof.  The Company shall cause all such shares upon their cancellation to be authorized but unissued shares of Preferred Stock which may be reissued as part of a new series or Preferred Stock, subject to the conditions and restrictions on issuance set forth herein.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 6.&#9;<U>Liquidation, Dissolution or Winding Up.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;(A)&#9;Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Company, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $4,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the Series A Liquidation Preference").  Following the payment of the full amount of the Series A Junior Participating Preferred Stock, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock, unless prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 as appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock (such number in clause (ii), the "Adjustment Number").  Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate shares of the remaining assets to be distributed in the ration of the Adjustment Number to 1 with respect to such Series A Junior Participating Preferred Stock and Common Stock, on a per share basis, respectively.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;(B)&#9;In the event there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, in any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences.  In the event there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;(C)&#9;In the event the Company shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 7.&#9;<U>Consolidation, Merger, etc.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In case the Company shall enter into any consolidation, merger, combination or other transaction n which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times that aggregated amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.  In the event the Company shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that are outstanding immediately prior to such event.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 8.&#9;<U>Redemption.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;The shares of Series A Junior Participating Preferred Stock shall not be redeemable.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 9.&#9;<U>Ranking.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Company's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 10.&#9;<U>Amendment.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;The Certificate of Incorporation of the Company shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Section 11.&#9;<U>Fractional Shares.</P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 30<SUP>th</SUP> day of June 1987.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=295>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ George H. Walker III</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">George H. Walker III,&#9;&#9;</P>
<P ALIGN="JUSTIFY">President and Chief Executive Officer</TD>
</TR>
</TABLE>
</P>

<P ALIGN="JUSTIFY">Attest:</P>
<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=211>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ Joseph C. Zingrich</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">Joseph C. Zingrich</P>
<P ALIGN="JUSTIFY">Assistant Secretary</TD>
</TR>
</TABLE>

<B><P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="JUSTIFY">&#9;</B>STIFEL FINANCIAL CORP., a corporation organized and existing under and by virtue of the General Corporation Law of Delaware, as amended, DOES HEREBY CERTIFY:</P>
<P ALIGN="JUSTIFY">&#9;FIRST:  That each member of the Board of Directors of STIFEL FINANCIAL CORP., has given written consent to the adoption of a resolution setting forth the proposed amendment to the Restated Certificate of Incorporation of said Corporation and declaring said amendment advisable and calling for the presentation of said proposed amendment to the voting stockholders of said Corporation for consideration thereof and consent thereto.  The resolutions setting forth the proposed amendments are as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;1.  RESOLVED, that subject to approval by the stockholders, the Restated Certificate of Incorporation of the Corporation be amended by adding a new Article Eight as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;"EIGHTH:</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">A director of the Company shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 147 of the Delaware General Corporation Law, as the same exists or hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit.  This Article shall not eliminate or limit the liability of a director or any act of omission occurring prior to the effective date of the Amendment adding this Article to the Restated Certificate of Incorporation.  Any repeal or amendment of this Article by the stockholders of the corporation shall be prospective only, and shall not adversely affect any limitations of the personal liability of a director of the corporation existing at the time of such repeal or amendment."</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;SECOND:  That thereafter, pursuant to the direction of the Board of Directors of the Corporation, the Annual Meeting of the stockholders of said Corporation was duly called and held, at which meeting the necessary number of shares, as required by statute, were voted in favor of the amendment.</P>
<P ALIGN="JUSTIFY">&#9;THIRD:  That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of Delaware, as amended and that the capital of the Corporation will not be reduced under or by reason of the amendments.</P>
<P ALIGN="JUSTIFY">&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">IN WITNESS WHEREOF, said STIFEL FINANCIAL CORP. has caused its corporate seal to be hereunto affixed and this certificate to be signed by George H. Walker III, its President and John J. Goebel, its Secretary, this 8<SUP>th</SUP> day of May, 1987.</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">(SEAL)</P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=301>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ George H. Walker III</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">George H. Walker III,</P>
<P ALIGN="JUSTIFY">President and Chief Executive Officer</TD>
</TR>
</TABLE>
</P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">Attest:</P>
<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=271>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ John J. Goebel&#9;</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">John J. Goebel</P>
<P ALIGN="JUSTIFY">Secretary</TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY">&nbsp;</P>
</U><P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">RESTATED CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
</B><P ALIGN="JUSTIFY">&#9;&#9;STIFEL FINANCIAL CORP., a corporation organized December 31, 1981 under the name of SN Alliance, Inc. and existing under and by virtue of the General Corporation Law of Delaware, as amended, does hereby restate its Certificate of Incorporation:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;FIRST:  The name of the Corporation is STIFEL FINANCIAL CORP.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;SECOND:  Its registered office in the State of Delaware is located at 100 West Tenth Street, Wilmington, New Castle County, Delaware 19801.  The name and address of its registered agent is The Corporation Trust Company, 100 West Tenth Street, Wilmington, Delaware, 19801.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;THIRD:  The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;FOURTH:  </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> &#9;A.&#9;The aggregate shares of all classes of stock which the Corporation shall have authority to issue is Thirteen Million (13,000,000) shares, consisting of Three Million (3,000,000) shares of preferred stock of the par value of One Dollar ($1.00) each (hereinafter called the "Preferred Stock") and Ten Millions (10,000,000) shares of common stock of the par value of Fifteen Cents ($0.15) each (hereinafter called the "Common Stock").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> &#9;B.&#9;Any number of shares of the 3,000,000 shares of Preferred Stock may be issued from time to time in one or more series of Preferred Stock.  The designations, the relative preferences and participating, optional and other special rights, and the qualifications, limitations or restrictions of other series, if any, may differ from those of any and all other series, and the Board of Directors is hereby expressly authorized to fix by resolution or resolutions prior to the issuance of any shares of any series of the Preferred Stock, the designation, preferences, relative, participating, optional and other special rights or the qualifications, limitations or restrictions of such series, including without limiting the generality of the foregoing, the following:</P>
<P ALIGN="JUSTIFY"></P>
<OL TYPE="i">
<DIR>
<DIR>

<OL TYPE="i">

<P ALIGN="JUSTIFY"><LI>The date and time at which, and the terms and conditions on which, dividends on such series of Preferred Stock shall be paid;</LI></P>
<P ALIGN="JUSTIFY"><LI>The right, if any of the holders of shares of such series of Preferred Stock to vote and the manner of voting, except as may otherwise be provided by the General Corporation Law of the State of Delaware;</LI></P>
<P ALIGN="JUSTIFY"><LI>The right, if any, of the holders of shares of such series of Preferred Stock to convert the same into or exchange the same for other classes of stock of the Corporation and the terms and conditions for such conversion and exchange;</LI></P>
<P ALIGN="JUSTIFY"><LI>The redemption price or prices and the time at which, and the terms and conditions on which, the shares of such series of Preferred Stock may be redeemed;</LI></P>
<P ALIGN="JUSTIFY"><LI>The rights of the holders of shares of such series of Preferred Stock upon the voluntary or involuntary liquidation, distribution, or sale of assets, dissolution or winding up of the Corporation, and;</LI></P>
<P ALIGN="JUSTIFY"><LI>The terms of the sinking fund or redemption or purchase account, if any, to be provided for such series of Preferred Stock.</LI></P></OL>
</DIR>
</DIR>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">C.  Subject to the provisions of the Preferred Stock, dividends payable on the Common Stock of the Corporation is cash or otherwise may be declared and paid on the shares of the Common Stock of the Corporation from time to time out of any funds or property legally available therefore, and in the event of any such declaration or payment the holders of Common Stock of the Corporation shall be entitled, to the exclusion of the holders of the Preferred Stock, to share therein.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">D.  In the event of any liquidation, dissolution or winding up of the Corporation, after distribution and payment in full shall have been made to the holders of the Preferred Stock in accordance with the terms thereof, the remainder of the assets, if any, of the Corporation shall be distributed pro rata among the holders of the Common Stock of the Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">E.  The holders of the Common Stock shall, subject to the provisions of the By-laws of the Corporation and the General Corporation Law of the State of Delaware relating to the fixing of a record date, be entitled to one vote for each share held by them respectively in the election of directors and for all other purposes.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;FIFTH:  No stock or other security of the Corporation shall carry with it and no owner of any share or shares of stock or other security or securities of the Corporation shall be entitled to any preferential or pre-emptive right whatsoever to acquire additional shares of stock or of any other security of the Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;SIXTH:  The Board of Directors of the Corporation shall have the power to make, alter, amend or repeal the By-laws of the Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;SEVENTH:  The election of directors need not be by written ballot unless the By-laws shall so provide.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Said Restated Certificate of Incorporation has been duly adopted by the board of directors of the Corporation in accordance with the provisions of Section 245 of the General Corporation Law of Delaware, as amended.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;IN WITNESS WHEREOF, said STIFEL FINANCIAL CORP. has caused the corporate seal to be hereunto affixed and this certificate to be signed by George H. Walker III, its President and John J. Goebel, its Secretary, this 31<SUP>st</SUP> day of May, 1983.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">(SEAL)</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=277>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ George H. Walker III&#9;</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">George H. Walker III,</P>
<P ALIGN="JUSTIFY">President and Chief Executive Officer</TD>
</TR>
</TABLE>
</P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Attest:</P>
<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=229>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ John J. Goebel</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">John J. Goebel</P>
<P ALIGN="JUSTIFY">Secretary</TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">CERTIFICATE OF AMENDMENT</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">SN ALLIANCE, INC.</P>
<P ALIGN="CENTER"></P>
</B><P>&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;SN ALLIANCE, a corporation organized and existing under and by virtue of the General Corporation Law of Delaware, as amended, DOES HEREBY CERTIFY:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;FIRST:  That each member of the Board of Directors of SN ALLIANCE, INC., has given written consent to the adoption of resolutions setting forth proposed amendments to the Certificate of Incorporation of said Corporation and declaring said amendments advisable and calling for the presentation of said proposed amendments to the voting stockholders of said Corporation for consideration thereof and consent thereto.  The resolutions setting forth the proposed amendments are as follows:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;1.  RESOLVED, that, subject to approval by the stockholders, the Certificate of Incorporation of the Corporation be amended by striking Article First in its entirety and replacing therefor:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;"FIRST:  The name of the Corporation is STIFEL FINANCIAL CORP."</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;2.  RESOLVED, that, subject to approval by the stockholders, the Certificate of Incorporation of the Corporation be amended by striking Article Fourth in its entirety and replacing therefor:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;"FOURTH: </P>
<P ALIGN="JUSTIFY">&#9;&#9;</P><DIR>
<DIR>

<P ALIGN="JUSTIFY">A.&#9;The aggregate shares of all classes of stock which the Corporation shall have authority to issue is Thirteen Million (13,000,000) shares, consisting of Three Million (3,000,000) shares of preferred stock of the par value of One Dollar ($1.00) each (hereinafter called the "Preferred Stock") and Ten Million (10,000,000) shares of common stock of the par value of Fifteen Cents ($0.15) each (hereinafter called the "Common Stock").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">B.&#9;Any number of shares of the 3,000,000 shares of Preferred Stock may be issued from time to time in one or more series of Preferred Stock.  The designations, the relative preferences and participating, optional and other special rights, and the qualifications, limitations or restrictions of each such series, in any, may differ form those of any and all other series; and the Board of Directors is hereby expressly authorized to fix by resolution or resolutions prior to the issuance of any shares of any series of the Preferred Stock, the designations, preferences, relative, participating, optional and other special rights or the qualifications, limitations or restrictions of such series, including without limiting the generality of the foregoing, the following:</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<OL TYPE="i">

<OL TYPE="i">

<P ALIGN="JUSTIFY"><LI>The date and time at which, and the terms and conditions on which, dividends on such series of Preferred Stock shall be paid;</LI></P>
<P ALIGN="JUSTIFY"><LI>The right, if any, of the holders of shares of such series of Preferred Stock to vote and the manner of voting, except as may otherwise be provided by the General Corporation Law of the State of Delaware;</LI></P>
<P ALIGN="JUSTIFY"><LI>The right, if any, of the holders of shares of such series of Preferred Stock to convert the same into or exchange the same for other classes of stock of the Corporation and the terms and conditions for such conversion and exchange;</LI></P>
<P ALIGN="JUSTIFY"><LI>The redemption price of prices and the time at which, and the terms and conditions on which, the shares of such series of Preferred Stock may be redeemed;</LI></P>
<P ALIGN="JUSTIFY"><LI>The rights of the holders of shares of such series of Preferred Stock upon the voluntary or involuntary liquidation, distribution, or sale of assets, dissolution or winding up of the Corporation; and </LI></P>
<P ALIGN="JUSTIFY"><LI>The terms of the sinking fund or redemption or purchase account, if any, to be provided for such series of Preferred Stock.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

<P ALIGN="JUSTIFY">C.&#9;Subject to the provisions of the Preferred Stock, dividends payable on the Common Stock of the Corporation in cash or otherwise may be declared and paid on the shares of the Common Stock of the Corporation from time to time out of any funds or property legally available therefore, and in the event of any such declaration of payment the holders of Common Stock of the Corporation shall be entitled, to the exclusion of the holders of the Preferred Stock, to share therein.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">D.&#9;In the event of any liquidation, dissolution or winding up of the Corporation, after distribution and payment in full shall have been made to the holders of the Preferred Stock in accordance with the terms thereof, the remainder of the assets, if any, of the Corporation shall be distributed pro rata among the holders of Common Stock of the Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">E.&#9;The holders of the Commons Stock shall, subject to the provisions of the By-Laws of the Corporation and the General Corporation Law of the State of Delaware relating to the fixing of a record date, be entitled to one vote for each share held by them respectively in the election of directors and for all other purposes.</P>
<P ALIGN="JUSTIFY"></P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;3.&#9;RESOLVED, that, subject to approval by the stockholders, the Certificate of Incorporation of the Corporation be amended by striking Article Sixth in its entirety.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;SECOND:  Thereafter the Board of Directors adopted the following resolution:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;RESOLVED, that, subject to approval by the stockholders and effective upon the filing of the Amendment to Article Fourth of the Certificate of Incorporation as set forth in Item 2 above, each issued and outstanding share of the Corporation's Common Stock, par value $1.00 per share, be changed into seven (7) shares of the Corporation's newly-created Common Stock, par value $0.15 per share (the "new Common Stock").</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;THIRD:  Thereafter the Board of Directors adopted the following resolution:</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;RESOLVED, that, effective upon the filing of the Amendment to Article Four of the Certificate of Incorporation as set forth in Item 2 above, the amount of $20,869 shall be transferred from the additional paid-in capital account to the common stock of the Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;FOURTH:  That thereafter, pursuant to the direction of the Board of Directors of the Corporation, a special meeting of the Stockholders of said Corporation was duly called and held, at which meeting the necessary number of shares, as required by statute, were voted in favor of the amendments.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;FIFTH:  That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of Delaware, as amended, and that the capital of the Corporation will not be reduced under or by reason of the amendments.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">IN WITNESS WHEREOF, said SN ALLIANCE, INC. has caused it corporate seal to be hereunto affixed and this certificate to be signed by George H. Walker III, its President and John J. Goebel, its Secretary, this 31<SUP>st</SUP> day of May, 1983.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">(SEAL)</P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=271>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ George H. Walker III</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">George H. Walker III,</P>
<P ALIGN="JUSTIFY">President and Chief Executive Officer</TD>
</TR>
</TABLE>
</P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Attest:</P>
<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=211>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ John J. Goebel&#9;</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">John J. Goebel</P>
<P ALIGN="JUSTIFY">Secretary</TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY"></P>
<U><P ALIGN="JUSTIFY">&nbsp;</P>
</U><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">CERTIFICATE OF INCORPORATION</P>
<P ALIGN="CENTER">OF</P>
<P ALIGN="CENTER">SN ALLIANCE, INC.</P>
<P ALIGN="CENTER"></P>
<P ALIGN="CENTER">&nbsp;</P>
</B><P ALIGN="JUSTIFY">&#9;FIRST:  The name of the Corporation is SN ALLIANCE, INC.</P>
<P ALIGN="JUSTIFY">&#9;SECOND:  Its registered office in the State of Delaware is located at 100 West Tenth Street, Wilmington, New Castle County, Delaware 19801.  The name and address of its registered agent is The Corporation Trust Company, 100 West Tenth Street, Wilmington, Delaware 19801.</P>
<P ALIGN="JUSTIFY">&#9;THIRD:  The purpose of the Corporation is to engage in any lawful act or activity for which corporation may be organized under the General Corporation Law of Delaware.</P>
<P ALIGN="JUSTIFY">&#9;FOURTH:  The total number of shares of stock which the Corporation shall have authority to issue is 750,000 shares of common stock of the par value of One Dollar ($1.00) each, accounting in the aggregate to Seven Hundred Fifty Thousand Dollars ($750,000).</P>
<P ALIGN="JUSTIFY">&#9;FIFTH:  No stock or other security of the Corporation shall carry with it and no owner of any share or shares of stock or other security or securities of the Corporation shall be entitled to any preferential or pre-emptive right whatsoever to acquire additional shares of stock or of any other security of the Corporation.</P>
<P ALIGN="JUSTIFY">&#9;SIXTH:  Whenever a holder of any shares of stock of the Corporation proposes to sell or dispose f such shares, or dies, the Corporation or the holders of shares of the Corporation, or both, shall have such prior right to purchase the shares of the holder to proposing to sell or dispose of shares or who dies, and at such price per share on such terms as may be stipulated or made determinable by an agreement in writing by such holder and the Corporation or the holders of stock of the Corporation, or both, then in effect.</P>
<P ALIGN="JUSTIFY">&#9;SEVENTH:  The Board of Directors of the Corporation shall have the power to make, alter, amend or repeal the By-laws of the Corporation.</P>
<P ALIGN="JUSTIFY">&#9;EIGHTH:  The election of directors need not be by written ballot unless the By-laws shall so provide.</P>
<P ALIGN="JUSTIFY">&#9;NINTH:  The name and mailing address of the incorporation is as follows:</P>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=372>
<TR><TD WIDTH="42%" VALIGN="TOP">
<U><P ALIGN="JUSTIFY">Name</U></TD>
<TD WIDTH="58%" VALIGN="TOP">
<U><P ALIGN="JUSTIFY">Mailing Address</U></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Connie B. Walsh</TD>
<TD WIDTH="58%" VALIGN="TOP">
<P ALIGN="JUSTIFY">500 N. Broadway </P>
<P ALIGN="JUSTIFY">Suite 2000</P>
<P ALIGN="JUSTIFY">St. Louis, MO 63102</TD>
</TR>
</TABLE>
</P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;INWITNESS WHEREOF, I, the undersigned being the incorporator of the Corporation hereinbefore named, for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Delaware do make this certificate, hereby declaring and certifying that this is my act and deed and that the fact herein stated are true and accordingly have hereunto set my hand this eight day of December 1981.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=204>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ Connie B. Walsh</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">Connie B. Walsh</TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">STATE OF MISSOURI  )&#9;</P>
<P ALIGN="JUSTIFY">&#9;&#9;                            )   SS.</P>
<P ALIGN="JUSTIFY">CITY OF ST. LOUIS&#9;    )</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">I, <U>Elizabeth M. Stanfill</U>, a notary public, do hereby certify that on the eighth day of December, 1981, personally appeared before me Connie B. Walsh, who being by the first duly sworn, declared that she is the person who signed the foregoing document as incorporator, and that the statements therein contained are true.</P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=192>
<TR><TD VALIGN="TOP">
<U><P ALIGN="JUSTIFY">/s/ Elizabeth H. Stanfill</U></TD>
</TR>
<TR><TD VALIGN="TOP">
<P ALIGN="JUSTIFY">Notary Public</TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY">&#9;</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=187>
<TR><TD VALIGN="TOP">
<FONT SIZE=1><P ALIGN="JUSTIFY">Elizabeth H. Stanfill</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=1><P ALIGN="JUSTIFY">Notary Public State of Missouri</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=1><P ALIGN="JUSTIFY">My Commission Expires <U>&#9;</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=1><P ALIGN="JUSTIFY">St. Louis County</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&#9;&#9;&#9;</P></FONT></BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>rex10-10q.htm
<DESCRIPTION>EX 10.(A) AMENDMENT OF LOAN AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>STIFEL FINANCIAL CORP</TITLE>
</HEAD>
<BODY>

<B><FONT SIZE=4><P ALIGN="CENTER">STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
</FONT><FONT SIZE=2><P ALIGN="CENTER"></P>
</B></FONT><FONT SIZE=4><P ALIGN="CENTER">EXHIBIT 10. (a)</P>
<P ALIGN="CENTER">SECOND MODIFICATION OF NOTE</P>
<P ALIGN="CENTER">AND AMENDMENT OF LOAN AGREEMENT</P>
<P ALIGN="CENTER"></P>
<B><P ALIGN="CENTER">&nbsp;</P>
</B></FONT><P ALIGN="JUSTIFY">&#9;This Second Modification of Note and Amendment of Loan Agreement (this "Agreement"), dated as of April 28, 1999, is entered into by and between STIFEL FINANCIAL CORP. ("Borrower") and THE WESTERN AND SOUTHERN LIFE INSURANCE COMPANY ("Lender").</P>
<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><B><U><FONT FACE="Helv,Arial"><P ALIGN="CENTER">RECITALS</P>
</B></U></FONT><FONT SIZE=2><P ALIGN="CENTER"></P>
<OL TYPE="A">

</FONT><P ALIGN="JUSTIFY"><LI>Borrower executed and delivered to Lender a Promissory Note (the "Original Note") dated December 30, 1997 in the original principal amount of $5,000,000 in connection with a Loan Agreement of even date therewith between Borrower and Lender (the "Loan Agreement").</LI></P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The Original Note was amended by Modification of Note ("First Modification") dated February 24, 1999 to extend the maturity date thereof and modify the interest rate payable thereunder.  (The Original Note, as amended by the First Modification, is hereinafter referred to as the "Note").</LI></P>
<P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY"><LI>Borrower has requested to borrow an additional sum of $5,000,000 on the same terms and conditions as the Note.</LI></P></OL>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">&#9;NOW, THEREFORE, in consideration of the foregoing and further good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<OL>

</FONT><P ALIGN="JUSTIFY"><LI>The Note is amended to increase the principal sum from $5,000,000 to $10,000,000.</LI></P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>The first sentence of Paragraph 2.1 of the Loan Agreement is deleted and the following two sentences are substituted in its place:</LI></P></OL>

<P ALIGN="JUSTIFY"></P><DIR>
<DIR>

</FONT><FONT SIZE=4><P ALIGN="JUSTIFY">          "Lender will lend to Borrower and Borrower will borrow from Lender the sum of $10,000,000 ("Loan"), subject to the terms and conditions and upon the representations and warranties of Borrower set forth in this Agreement.  Upon the execution of this Agreement, $5,000,000 of the Loan will be disbursed and, provided no Event of Default has occurred, the remaining $5,000,000 will be disbursed on July 1, 1999.</P>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY"></P></DIR>
</DIR>

</FONT><P ALIGN="JUSTIFY">&#9;Any and all representations and warranties set forth in the Loan Agreement are hereby restated, repeated and affirmed as of the date hereof.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Any terms or conditions of the Note or the Loan Agreement which are in conflict with the terms of this Agreement shall be deemed to be amended hereby.  Except as amended hereby, all the terms and provisions of the Note and the Loan and Agreement shall remain in full force and effect as originally written.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;This Agreement shall inure to the benefit of, and be binding upon, Lender and Borrower and their respective successors and assigns.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In Witness Whereof, Lender and Borrower have executed this Agreement as of the date first above written by and through their duly authorized representatives.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><B><FONT FACE="Helv,Arial"><P>&#9;&#9;</B>                                           </P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>BORROWER:</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>STIFEL FINANCIAL CORP.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>BY:&#9;<U>/s/ Ronald J. Kruszewski</U> </FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2>
<P ALIGN="JUSTIFY">&nbsp;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">LENDER:</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">THE WESTERN AND SOUTHERN</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">LIFE INSURANCE COMPANY</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;&#9;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">BY:&#9;<U>/s/ James J. Vance</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">         James J. Vance, Treasurer</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;&#9;&#9;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">BY:&#9;<U>/s/ D.J. Wuebbling</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">&#9;</B>D.J. Wuebbling, Senior Vice President</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;&#9;<U> </P>
</U><P ALIGN="JUSTIFY">&#9;&#9;&#9;</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">&#9;&#9;</P>
</FONT><B><FONT FACE="Helv,Arial"><P>&#9;&#9;</P>
<U><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">MODIFICATION OF NOTE</P>
</B></U></FONT><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">&#9;This Modification of Note, dated as of February 24, 1999, is entered into by and between STIFEL FINANCIAL CORP. ("Borrower") and THE WESTERN AND SOUTHERN LIFE INSURANCE COMPANY ("Lender").</P>
<FONT SIZE=2><P ALIGN="JUSTIFY">&nbsp;</P>
</FONT><B><U><FONT FACE="Helv,Arial"><P ALIGN="CENTER">RECITALS</P>
</B></U></FONT><FONT SIZE=2>
<OL TYPE="A">

</FONT><P ALIGN="JUSTIFY"><LI>Borrower executed and delivered to Lender a Promissory Note (the "Note") dated December 30, 1997 in the amount of $5,000,000.</LI></P>
<P ALIGN="JUSTIFY"><LI>Lender, at the request of Borrower, has agreed to modify certain provisions of the Note.</LI></P></OL>

<FONT SIZE=2>
</FONT><STRIKE><P ALIGN="JUSTIFY">&nbsp;</P>
</STRIKE><P ALIGN="JUSTIFY">&#9;NOW, THEREFORE, in consideration of the foregoing and further good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed that the Note shall be amended and changed in the manner set forth below.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<OL>

</FONT><P ALIGN="JUSTIFY"><LI>Section 1.1 of the Note is deleted in its entirety and the following is substituted in lieu thereof:</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<OL>

<P ALIGN="JUSTIFY"><LI>Subject to the applicability of the Default Rate as provided below, this Note will bear interest from the date hereof to and including June 30, 1999 at a rate per annum equal to 1.0% plus the LIBOR Rate for a 1-month interest period.  Commencing July 1, 1999, subject to the applicability of the Default Rate as provided below, this Note will bear interest at the rate of 8% per annum.  All interest calculations under this Note will be made based on a year of 360 days for the actual number of days in each interest period.  In no event will the rate of interest hereunder exceed the maximum rate permitted by law.</LI></P></OL>
</OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Section 2.1 is deleted in its entirety and the following is substituted in lieu thereof:</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<OL>

<P ALIGN="JUSTIFY"><LI>Accrued interest will be due and payable monthly, commencing on February 1, 1998 and continuing on the first day of each month thereafter until June 30, 2004, on which date the entire outstanding principal balance hereunder and all accrued and unpaid interest will be due and payable in full.</LI></P></OL>
</OL>
</OL>

<P ALIGN="JUSTIFY">      (3)  Section 2.2 is deleted in its entirety.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;Any terms or conditions of the Note or the Loan Agreement between Lender and Borrower dated December 30, 1997 which are in conflict with the terms of this Modification of Note shall be deemed to be amended hereby.  Except as amended hereby, all the terms and provisions of the Note and the Loan Agreement shall remain in full force and effect as originally written.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;This Modification of Note shall inure to the benefit of, and be binding upon, Lender and Borrower and their respective successors and assigns.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&#9;In Witness Whereof, Lender and Borrower have executed this Modification of Note as of the date first above written by and through their duly authorized representatives.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<B><FONT FACE="Helv,Arial"><P>&#9;&#9;                                           </P></B></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>BORROWER:</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>STIFEL FINANCIAL CORP.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P>BY:&#9;<U>/s/ Ronald J. Kruszewski</U> </FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">LENDER:</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">THE WESTERN AND SOUTHERN</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">LIFE INSURANCE COMPANY</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;&#9;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">BY:&#9;<U>/s/ James J. Vance</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">         James J. Vance, Treasurer</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;&#9;&#9;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=300>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">BY:&#9;<U>/s/ D.J. Wuebbling</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">&#9;</B>D.J. Wuebbling, Senior Vice President</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</FONT><B><FONT FACE="Helv,Arial"><P>&#9;&#9;</P>
</B></FONT><P ALIGN="JUSTIFY"></P>
<B><FONT SIZE=4><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">LOAN AGREEMENT</P>
</FONT><FONT SIZE=2><P ALIGN="JUSTIFY"></P>
</B></FONT><P ALIGN="JUSTIFY">&#9;<B>STIFEL FINANCIAL CORP</B>. ("Borrower"), and <B>THE WESTERN AND SOUTHERN LIFE INSURANCE COMPANY</B> ("Lender"), hereby agree as follows:</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<OL>

<B><U><P ALIGN="JUSTIFY"><LI>Definitions</B></U>.  Capitalized terms used herein and not otherwise defined herein will have the meanings given those terms in the second to last section of this Agreement.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Credit Facility</B></U>.</LI></P>
<P ALIGN="JUSTIFY"></P>
<OL>

<B><U><P ALIGN="JUSTIFY"><LI>Term Loan</B></U>.  Upon the execution of this Agreement, Lender will lend to Borrower and Borrower will borrow from Lender the sum of $5,000,000 ("Loan"), subject to the terms and conditions and upon the representations and warranties of Borrower set forth in this Agreement.  The Loan will be evidenced by the promissory note of Borrower of even date herewith and all amendments, extensions and renewals thereto and replacements and restatements thereof.  The Loan will bear interest and will be repayable in the manner set forth in the Note, the terms of which are incorporated herein by reference.</LI></P></OL>

<B><U><P ALIGN="JUSTIFY"></P>
</B></U><P ALIGN="JUSTIFY">2.1.1&#9;At any time after 12 months from the date hereof, the entire outstanding   principal balance and all accrued but unpaid interest under the Loan and the Note will be due and payable in full 60 days after written demand from Lender.                        </P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Representations and Warranties</B></U>.  To induce Lender to enter into this Agreement and to make the advances herein contemplated, Borrower hereby represents and warrants as follows as to each of Borrower and its Subsidiaries:</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Organization</B></U>.  It is duly organized and in good standing under the laws of the state of its organization, is duly qualified in all jurisdictions where required by the conduct of its business or ownership of its assets except where the failure to so qualify would not have a material adverse effect on its condition, financial or otherwise, and has the power and authority to own and operate its assets and to conduct its business as is now done.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Latest Financials</B></U>.  Its Current Financial Statements as delivered to Lender are true, complete and accurate in all material respects and fairly present its financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise and the results of its operations for the periods specified therein.  The annual financial statements of all business entities included in the Current Financial Statements have been prepared in accordance with generally accepted accounting principles applied consistently with preceding period subject to any comments and notes contained therein.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Recent Adverse Changes</B></U>.  Except as specifically disclosed in the Disclosure Schedule, since the dates of its Current Financial Statements, it has not suffered any damage, destruction or loss which has materially and adversely affected its business or assets and no event or condition of any character has occurred which has materially and adversely affected its assets, liabilities, business or financial condition, and it has no knowledge of any event or condition which may materially and adversely affect its assets, liabilities, business or financial condition.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Recent Actions</B></U>.  Except as disclosed in the Disclosure Schedule, since the dates of its Current Financial Statements, its business has been conducted I the ordinary course and it has not:  (a) incurred any obligations or liabilities, whether accrued, absolute, contingent or otherwise, other than liabilities incurred and obligations under contracts entered into in the ordinary course of business and other than liabilities to Lender; (b) discharged or satisfied any lien or encumbrance or paid any obligations, absolute or contingent, other than current liabilities, in the ordinary course of business, and other than the conversion of certain debt into equity pursuant to the Stifel Financial Corp. Note Agreement dated October 15, 1988 among Borrower and various other parties with respect to the Aegon transaction; (c) mortgaged, pledged or subjected to lien or any other encumbrance any of its assets, tangible or intangible, or cancelled any debts or claims except in the ordinary course of business; or (d) made any loans or otherwise conducted its business other than in the ordinary course.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Title</B></U>.  It has good and marketable title to the assets reflected on its Current Financial Statements, free and clear from all liens and encumbrances except for:  (a) current taxes and assessments not yet due and payable, (b) liens and encumbrances, if any, reflected or noted on said balance sheet or notes, (c) any security interests, pledges or mortgages to Lender in connection with the closing of this Agreement, (d) assets disposed of in the ordinary course of business, and (e) Permitted Liens.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Taxes</B></U>.  Except as to taxes not yet due and payable, it has filed all returns and reports that are now required to be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon it or its property, including unemployment, social security and similar taxes, in each case involving more than $1,000 in taxes; and all of such taxes have been either paid or adequate reserve or other provision has been made therefor.  It has timely filed the payments of every tax and tax return with the appropriate governmental authorities, and it presently owes no penalty for failure to file or to file in a timely manner and there is no basis known to Borrower for any such penalty in the future.  If it has currently filed an extension for the payment of taxes, it has accrued sufficient funds for the payment of such tax in accordance with generally accepted accounting principles.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Authority</B></U>.  It has full power and authority to enter into the transactions provided for in this Agreement.  The documents to be executed by it in connection with this Agreement, when executed and delivered by it will constitute the legal, valid and binding obligations of it enforceable in accordance with their respective terms.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Other Defaults</B></U>.  There does not now exist any material default or violation by it of or under any of the terms, conditions or obligations of:  (a) its organizational documents; (b) any material indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound; or (c) any law regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon it by any law or by any governmental authority, court or agency; and the transactions contemplated by this Agreement will not result in any such default or violation.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>ERISA</B></U>.  It and each of its ERISA Affiliates are in compliance in all material respects with the applicable provisions of ERISA and the regulations and published interpretations thereunder.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Closing Memo</B></U>.  The information contained in each of the documents prepared by it, executed by it or provided by a third party at its request listed on the Closing Memo to be executed or delivered by it or relating to the Loan is complete and correct in all material respects.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Capitalization</B></U>.  The authorized capital stock of Borrower consists of 10,000,000 shares of Borrower common stock, par value $.15 per share ("Borrower Common Stock") of which, as of December 23, 1997, 6,198,138 shares were issued and outstanding and 162,284 shares were held in treasury.  All of the issued and outstanding shares of Borrower Common Stock have been duly authorized and validly issued and are fully paid, non-assessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.  As of the date of this Agreement, except as provided below, Borrower does not have and is not bound by any outstanding subscriptions, options, warrants, calls, stock appreciation rights, commitments or agreements of any character calling for the purchase or issuance of any shares of Borrower Common Stock or any other equity securities of Borrower or any securities representing the right to purchase or otherwise receive any shares of Borrower Common Stock.  Section 3.11 of the Borrower Disclosure Schedule sets forth, in each case as of December 23, 1997, the number of shares of Borrower Common Stock that were reserved for issuance upon the exercise of stock options pursuant to the Borrower Stock Plans and the number of shares of Borrower Common Stock purchasable under such options.  Except as set forth in Section 3.11 of the Borrower Disclosure Schedule, no other shares of Borrower Common Stock were reserved for issuance.  Except as set forth on Section 3.11 of the Borrower Disclosure Schedule, there are no outstanding contractual obligations of Borrower or any of its Subsidiaries to repurchase, redeem or otherwise acquire, or to register for sale, any shares of capital stock of Borrower or any of its Subsidiaries.  Except as set forth on Section 3.11 of the Borrower Disclosure Schedule, there are no outstanding contractual obligations of Borrower or any of its Subsidiaries to vote or to dispose of any shares of the capital stock of any of its Subsidiaries.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Reports</B></U>.  Borrower and each of its Subsidiaries have filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since January 1, 1994 with (i) the Securities and Exchange Commission ("SEC"), (ii) any Self Regulatory Organization ("SRO") and (iii) any other federal, state or foreign governmental or regulatory agency or authority (collectively with the SEC and the SROs, "Regulatory Agencies"), and all other reports and statements required to be filed by them since January 1, 1994, including, without limitation, any report or statement required to be filed pursuant to the laws, rules or regulations of the United States, any state, or any Regulatory Agency and have paid all fees and assessments due and payable in connection therewith, except where the failure to file such report, registration or statement or to pay such fees and assessments either individually or in the aggregate, is not reasonably likely to result in a material adverse effect on Borrower.  Except as disclosed in Section 3.12 of the Borrower Disclosure Schedule and for normal examinations conducted by a Regulatory Agency in the regular course of the business of Borrower and its Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the knowledge of Borrower, investigation into the business or operations of Borrower or any of its Subsidiaries since January 1, 1994, except where any such proceedings or investigations are not, individually or in the aggregate, reasonably likely to result in a material adverse effect on Borrower.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Legal Proceedings</B></U>.</LI></P>
<P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>As of the date of this Agreement, except as set forth in Section 3.13 of the Borrower Disclosure Schedule, neither Borrower nor any of its Subsidiaries is a party to any, and there are no pending or, to the knowledge of Borrower, threatened, material legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Borrower or any of its Subsidiaries or challenging the validity or propriety of the transactions contemplated by this Agreement which are reasonably likely, individually or in the aggregate, to result in a material adverse effect on Borrower.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Except as set forth in Section 3.13 of the Borrower Disclosure Schedule, there is no injunction, order, judgment or decree imposed upon Borrower, any of its Subsidiaries or the assets of Borrower or any of its Subsidiaries which has resulted in, or is reasonably likely to result in, a material adverse effect on Borrower.</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>SEC Reports</B></U>.  Borrower has made available to Lender an accurate and complete copy of each of the following, in each case as amended:  (a) final registration statement, prospectus, report, schedule and definitive proxy statement filed since January 1, 1994 by Borrower with the SEC pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934 as amended (the "Exchange Act") (the "Borrower Reports"), and (b) communication mailed by Borrower to its stockholders since January 1, 1994.  As of the date of filing or mailing, as the case may be, no such registration statement, prospectus, report, schedule, proxy statement or communication contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading.  Since January 1, 1994, Borrower and each Borrower Subsidiary has timely filed all reports and other documents required to be filed by it under the Securities Act and the Exchange Act, and, as of their respective dates, all such reports complied in all material respects with the published rules and regulations of the SEC with respect thereto.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Licenses:  Compliance with Applicable Law</B></U>.  Borrower and each of its Subsidiaries hold all material licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to all, and have complied with and are not in default in any material respect under any, applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to Borrower or any of its Subsidiaries, except in each case where the failure to hold such license, franchise, permit or authorization or such noncompliance or default is not, individually or in the aggregate, reasonably likely to result in a material adverse effect on Borrower, and neither Borrower nor any of its Subsidiaries knows of, or has received notice of, any material violations of any of the above, except for such material violations which are not, individually or in the aggregate, reasonably likely to result in a material adverse effect on Borrower.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Agreements with Regulatory Agencies</B></U>.  As of the date of this Agreement, except as set forth in Section 3.16 of the Borrower Disclosure Schedule, neither Borrower nor any of its Subsidiaries is subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any supervisory letter from or has adopted any board resolutions at the request of any Regulatory Agency or other Governmental Entity that materially restricts the conduct of its business or that in any material manner relates to its capital adequacy, its credit policies, its management or its business (each, whether or not set forth in the Borrower Disclosure Schedule).</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Interest Rate Risk Management Instruments</B></U>.  Any interest rate swaps, caps, floors and option agreements and other interest rate risk management arrangements, whether entered into for the account of Borrower or for the account of a customer of Borrower or one of its Subsidiaries, were entered into in the ordinary course of business and, to Borrower's knowledge, in accordance, in all material respects, with prudent business practice and applicable rules, regulations and policies of any Regulatory Authority and with counterparties believed to be financially responsible at the time and are legal, valid and binding obligations of Borrower or one of its Subsidiaries enforceable in accordance with their terms and are in full force and effect.  Borrower and each of its Subsidiaries have duly performed in all material respects all of their material obligations thereunder to the extent that such obligations to perform have accrued, and, to Borrower's knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereunder.</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Affirmative Covenants</B></U>.  From the date of execution of this Agreement until all Obligations to Lender have been fully paid and this Agreement terminated, Borrower will and will cause each of its Subsidiaries to:</LI></P>
<P ALIGN="JUSTIFY"></P>
<OL>

<B><U><P ALIGN="JUSTIFY"><LI>Quarterly Statements</B></U>.  Furnish Lender within 45 days after the end of each fiscal quarter (other than Borrower's fourth fiscal quarter) internally prepared financial statements of Borrower, Stifel Nicolaus &amp; Co., Todd Investment Advisors, Inc. and Century Securities Associates, Inc. with respect to such calendar quarter, which financial statements will:  (a) as to Borrower, be in reasonable detail and in form reasonably satisfactory to Lender and as to Stifel Nicolaus &amp; Co., Todd Investment Advisors, Inc. and Century Securities Associates, Inc., be in the form currently produced in the ordinary course of business pursuant to regulatory requirements:  (b) be accompanied by a Compliance Certificate; (c) include a balance sheet as of the end of such period, profit and loss and surplus statements for such period and a statement of cash flows for such period; (d) include prior year comparisons; and (e) be on a consolidating and consolidated basis for Borrower and its Subsidiaries, if any, and for any entity in which Borrower's financial information is consolidated in accordance with generally accepted accounting principles.  Borrower's (and, where appropriate, each of the above-named Subsidiaries') quarterly SEC filings accompanied by a Compliance Certificate will be deemed to satisfy the requirements of this Section.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Annual Statements</B></U>.  Furnish Lender within 90 days after the end of each fiscal year of Borrower, Stifel, Nicolaus &amp; Co., Todd Investment Advisors, Inc. and Century Securities Associates, Inc. annual audited financial statements which will:  (a) as to Borrower, include a balance sheet as of the end of such year, profit and loss and surplus statements and a statement of cash flows for such year and as to Stifel, Nicolaus &amp; Co., Todd Investment Advisors, Inc. and Century Securities Associates, Inc. be in the form currently produced in the ordinary course of business pursuant to regulatory requirements; (b) be on a consolidated and consolidating basis with Borrower, its Subsidiaries, if any, and any entity into which Borrower's financial information is consolidated in accordance with generally accepted accounting principles; (c) be accompanied by a Compliance Certificate, and (d) contain the unqualified opinion of a nationally recognized independent certified public accountant and its examination will have been made in accordance with generally accepted auditing standards and such opinion will contain a report reasonably satisfactory to Lender of any inconsistency in the application of generally accepted accounting principles with the preceding years' statements, if any.  Borrower's (and, where appropriate, each of the above-named Subsidiaries') annual SEC filings accompanied by a Compliance Certificate will be deemed to satisfy the requirements of this Section.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Taxes</B></U>.  Pay and discharge when due all indebtedness and all taxes, assessments, charges, levies and other liabilities imposed upon it, its income, profits, property or business, except those which currently are being contested in good faith by appropriate proceedings and for which it has set aside adequate reserves or made other adequate provision with respect thereto, but any such disputed item will be paid forthwith upon the commencement of any proceeding for the foreclosure of any lien which may have attached with respect thereto, unless Lender has received an opinion in form and substance and from legal counsel acceptable to it that such proceeding is without merit.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Operations</B></U>.  Continue its business operations in substantially the same manner as at present, except where such operations are rendered impossible by a fire, strike or other events beyond its control.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Insurance</B></U>.  Keep its insurable real and personal property insured with responsible insurance companies against loss or damage by fire, windstorm and other hazards which are commonly insured against in an extended coverage endorsement in an amount equal to not less than 90% of the insurable value thereof on a replacement cost basis and also maintain public liability insurance in a reasonable amount.  Schedules of all insurance will be submitted to Lender upon request.  Such schedules will contain a description of the risks covered, the amounts of insurance carried on each risk, the name of the insurer and the cost of such insurance.  Borrower will provide new schedules to Lender promptly to reflect any change in insurance coverage.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Compliance with Laws</B></U>.  Comply in all material respects with all laws and regulations applicable to it and to the operation of its business, including without limitation those relating to environmental and health matters, and do all things necessary to maintain, renew and keep in full force and effect all rights, permits, licenses, certificates, satisfactory clearances and franchises necessary to enable Borrower to continue its business.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>ERISA Compliance</B></U>.  Comply in all material respects with the applicable provisions of ERISA.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Line of Business</B></U>.  Not enter into any lines or areas of business substantially different from the business or activities in it is presently engaged.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL START=5>

<B><U><P ALIGN="JUSTIFY"><LI>Negative Covenants</B></U>.  From the date of execution of this Agreement until all of the Obligations have been fully paid, Borrower will not and will cause each of its Subsidiaries to not without Lender's prior written consent:</LI></P></OL>

<B><U><P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<P ALIGN="JUSTIFY"><LI>Debt</B></U>.  Incur any Indebtedness in excess of $5,000,000 in the aggregate during the term of this Agreement, other than the Loan and any subsequent Indebtedness to Lender.  The foregoing covenant will apply only to Borrower and not to any of its Subsidiaries.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Liens</B></U>.  Incur, create, assume, become or be liable in any way, or suffer to exist any mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets, now or hereafter owned, other than Permitted Liens.  The foregoing covenant will apply only to Borrower and not to any of its Subsidiaries.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Guarantees</B></U>.  Guarantee, endorse or become contingently liable for the obligations of any person, firm or corporation, except in connection with the endorsement and deposit of checks in the ordinary course of business for collection and signature guarantees in the ordinary course of business.  The foregoing covenant will apply only to Borrower and not to any of its Subsidiaries.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Ownership and Management</B></U>.  Fail to give Lender notice within 5 days and pay to Lender upon Lender's written demand given within 60 days after receipt of notice and payable 90 days after such demand without any other grace period or notice, the entire unpaid balance of all of the Obligations, if more than 30% of the outstanding shares of Borrower are acquired by a person or affiliated group of persons in one or a series of transactions.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Tangible Net Worth</B></U>.  Maintain at all times a minimum consolidated Tangible Net Worth of not less than $40,000,000 and cause Stifel Nicolaus &amp; Co. to maintain capital of at least 150% of the minimum net capital required by The Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1).</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Dividends</B></U>.  Declare or pay any payment or dividends of any kind other than dividends payable solely in shares of its capital stock (including without limitation debt repayment, payment for goods and services) to any Affiliate or any person related to any Affiliate except for dividends to Borrower's shareholders not in excess of $0.20 per share per annum and dividends and payments from Borrower's Subsidiaries to Borrower.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Advances and Loans</B></U>.  Other than margin loans in the ordinary course of business and intercompany advances between Borrower and its Subsidiaries or its ESOP, lend money, give credit or make advances (other than advances not to exceed $50,000 for any one employee, other than employees of Stifel Nicolaus &amp; Co., and advances not to exceed $750,000 for any one employee of Stifel Nicolaus &amp; Co., and other reasonable and ordinary advances to cover reasonable expenses of employees, such as travel expenses) to any person, firm, joint venture or corporation, including, without limitation, Affiliates.  Lender will not unreasonably withhold its consent to advances and loans not permitted by this Section.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<OL START=5>

<B><U><P ALIGN="JUSTIFY"><LI>Events of Default</B></U>.  Upon the occurrence of any of the following events with respect to Borrower or any of its Subsidiaries:</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Non-Payment</B></U>.  The non-payment of any principal amount of any Note when due, whether by acceleration or otherwise, or the nonpayment of any interest upon any Note or any other amount due Lender pursuant to this Agreement within 5 days of when the same is due;</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Covenants</B></U>.  The default in the due observance of any affirmative covenant or agreement to be kept or performed by it under the terms of this Agreement and the failure or inability of it to cure such default within 30 days of the occurrence thereof; provided that such 30 day grace period will not apply to:  (a) any default which in Lender's good faith determination is incapable of cure, (b) any default that has previously occurred, (c) any default in any negative covenants, or (d) any failure to maintain insurance;</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Representation and Warranties</B></U>.  Any representation or warranty made by it in this Agreement, or in any report, certificate, opinion, financial statement or other document furnished in connection with the Obligations is false or erroneous in any material respect or any material breach thereof has been committed;</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Obligations</B></U>.  Except as provided in <U>Sections 6.1, 6.2 and 6.3</U> above, the default by it in the due observance of any covenant, negative covenant or agreement to be kept or performed by it under the terms of this Agreement, or any document now or in the future executed in connection with any of the Obligations and the lapse of any applicable cure period provided therein with respect to such default, or, if so defined therein, the occurrence of any Event of Default or Default (as such terms are defined therein);</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Bankruptcy, etc.</B></U>  It:  (a) dissolves or is the subject of any dissolution, a winding up or liquidation; (b) makes a general assignment for the benefit of creditors; or (c) files or has filed against it a petition in bankruptcy, for a reorganization or an arrangement, or for a receiver, trustee or similar creditors' representative for its property or assets or any part thereof, or any other proceeding under any federal or state insolvency law, and if filed against it, the same has not been dismissed or discharged within 60 days thereof;</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Execution, Attachment, Etc.</B></U>  The commencement of any foreclosure proceedings, proceedings in aid of execution, attachment actions, levies against, or the filing by any taxing authority of a lien against it, except those liens being diligently contested in good faith which in the aggregate do not exceed $100,000;</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Judgments</B></U>.  Unless in the opinion of Lender the same is adequately insured or bonded, the entry by a court of competent jurisdiction of a final judgment for the payment of money involving more than $25,000 against it and the failure by it to discharge the same, or cause it to be discharged, within 10 days from the date of the order, decree or process under which or pursuant to which such judgment was entered, or to secure a stay of execution pending appeal of such judgment; the entry of one or more final monetary or non-monetary judgments or order which, singly or in the aggregate, does or could reasonably be expected to:  (a) cause a material adverse change in its condition (financial or otherwise), operations, properties or prospects, (b) have a material adverse effect on its ability to perform its obligations under this Agreement, or (c) have a material adverse effect on the rights and remedies of Lender under this Agreement or any Note;</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Other Indebtedness of Lender's Affiliates</B></U>.  A default with respect to any evidence of Indebtedness by it (other than to Lender pursuant to this Agreement) to any of Lender's Affiliates, if the effect of such default is to accelerate the maturity of such indebtedness or to permit the holder thereof to cause such Indebtedness to become due prior to the stated maturity thereof, or if any Indebtedness of it (other than to Lender pursuant to this Loan Agreement) is not paid when due and payable, whether at the due date thereof or a date fixed for prepayment or otherwise (after the expiration of any applicable grace period; or</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Other Indebtedness</B></U>.  A default with respect to any evidence of Indebtedness in excess of $50,000 by it (other than to Lender or Lender's Affiliate pursuant to this Agreement), if the effect of such default is to accelerate the maturity of such Indebtedness or to permit the holder thereof to cause such Indebtedness to become due prior to the stated maturity thereof, or if any Indebtedness of it in excess of $50,000 (other than to Lender or Lender's Affiliate pursuant to this Loan Agreement) is not paid when due and payable, whether at the due date thereof or a date fixed for prepayment or otherwise (after the expiration of any applicable grace period);</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P><DIR>

<P ALIGN="JUSTIFY">then immediately upon the occurrence of any of the events described in <U>Section 6.5</U> and at the option of the Lender upon the occurrence of any other Event of Default, the Loans, all Notes and all other Obligations immediately will mature and become due and payable without presentment, demand, protest, or notice of any kind which are hereby expressly waived.  After the occurrence of any Event of Default, Lender is authorized without notice to anyone to offset and apply to all or any part of the Obligations all moneys, credits and other property of any nature whatsoever of Borrower now or at any time hereafter in the possession of, in transit to or from, under the control or custody of, or on deposit with (whether held by Borrower individually or jointly with another party), Lender or any of Lender's Affiliates.  The rights and remedies of Lender upon the occurrence of any Event of Default will include all rights and remedies provided under applicable law.  Upon or at any time after the occurrence of an Event of Default, Lender may request the appointment of a receiver of the Borrower.  Such appointment may be made without notice, and without regard to (i) the solvency or insolvency, at the time of application, for such receiver, of the person or persons, if any, liable for the payment of the Obligations and (ii) the value of any collateral at such time.  Such receiver will have the power to take possession, control and care of the Borrower.  Notwithstanding the appointment of any receiver, trustee, or other custodian, Lender will be entitled to the possession and control of any cash, or other instruments at the time held by, or payable or deliverable under the terms of this Loan Agreement to Lender.</P>
<P ALIGN="JUSTIFY"></P></DIR>

<OL START=7>

<B><U><P ALIGN="JUSTIFY"><LI>Post-Closing Expenses</B></U>.  To the extent that Lender incurs any costs or expenses in protecting or enforcing its rights hereunder or observing or performing any of the conditions or obligations of Borrower, including but not limited to reasonable Attorneys' Fees in connection with litigation, preparation of amendments or waivers, present or future stamp or documentary taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of this Agreement, such costs and expenses will be due on demand, will be included in the Obligations and will bear interest from the incurring or payment thereof at the Default Rate.</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<OL START=8>

<B><U><P ALIGN="JUSTIFY"><LI>Representations and Warranties to Survive</B></U>.  All representations, warranties, covenants, indemnities and agreements made by Borrower herein will survive the execution and delivery of this Agreement and the issuance of any Note.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Definitions</B></U>.  For purposes hereof:</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<OL>
<OL>

<P ALIGN="JUSTIFY"><LI>Each accounting term not defined or modified herein will have the meaning given to it under generally accepted accounting principles in effect on the Closing Date.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Affiliate" will mean any person, partnership, joint venture, company or business entity under common control or having similar equity holders owning at least ten percent (10%) thereof, whether such common control is direct or indirect.  All of Person's direct or indirect parent corporations, partners, Subsidiaries, and the officers, shareholders, members, directors and partners of any of the foregoing and persons related by blood or marriage to any of the foregoing will be deemed to be a Person's Affiliates for purposes of this Agreement.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Attorneys Fees" will mean the reasonable value of the services (and all costs and expenses related thereto) of the attorneys (and all paralegals and other staff employed by such attorneys) employed by Lender from time to time to:  (i) take any action in or with respect to any suit or proceedings (bankruptcy or otherwise) relating to this Agreement; (ii) enforce any of Lender's rights to collect any of the Obligations; (iii) give Lender advise with respect to this Agreement, including but not limited to advice in connection with any default, workout or bankruptcy; (iv) prepare any amendments, restatements, amendments or waivers to this Agreement or any of the documents executed in connection with any of the Obligations.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Business Day" will mean any day excluding Saturday, Sunday and any other day on which banks are required or authorized to close in Ohio.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Closing" will mean the execution and delivery of the documents listed on the Closing Memo.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Closing Date" will mean the date on which this Agreement is executed.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Closing Memo" will mean the Closing Memorandum between Borrower and Lender in connection with the transactions represented by this Agreement.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Code" will mean the Internal Revenue Code of 1986, as amended from time to time.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Compliance Certificate" will mean the Compliance Certificate in the form delivered to Borrower by Lender in connection with the Closing certifying among other things, whether any Event of Default exist and Borrower's compliance with certain financial covenants set forth herein.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Current Financial Statements" will mean the following financial statements:  Borrower's annual audited financial statements as of December 31, 1996 and Borrower's internally prepared financial statements as of September 30, 1997.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Default Rate" will mean 4% per annum plus the highest rate of interest that would otherwise be in effect under any Note but not more than the highest rate permitted by applicable law.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Default" will mean any event or condition which with the passage of time or giving of notice, or both, would constitute an Event of Default.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Disclosure Schedule" will mean the Disclosure Schedule delivered by the Borrower to the Lender in connection with the Closing.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"ERISA" will mean the Employee Retirement Income Security Act of 1974, or any successor statute, as amended from time to time.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Event of Default" will mean any of the events listed in <U>Section 6.</LI></P>
</U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Indebtedness" will mean, without duplication:  (i) all obligations (including capitalized lease obligations) which in accordance with generally accepted accounting principles would be shown on a balance sheet as a liability; (ii) all obligations for borrowed money or for the deferred purchase price of property or services; and (iii) all guarantees, reimbursement, payment or similar obligations, absolute, contingent or otherwise, under acceptance, letter of credit or similar facilities.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Lender's Affiliate" will mean any person, partnership, joint venture, company or business entity under common control or having similar equity holders owning at least ten percent (10%) thereof with Lender, whether such common control is direct or indirect.  All of Lender's direct or indirect parent corporations, sister corporations, and subsidiaries will be deemed to be a Lender's Affiliate for purposes of this Agreement.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Loan(s)" will mean any and all advances of funds under this Agreement or the Note.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Note" will mean any note, now or in the future, between Borrower and Lender, and will include any amendments made thereto and restatements thereof, extensions and replacements.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Obligations" will mean and include all loans, advances, debts, liabilities, obligations, covenants and duties owing to Lender or any of Lender's Affiliates from Borrower of any kind or nature, present or future whether or not evidenced by any note, guaranty or other instrument, whether arising under this Agreement or under any other agreement, instrument or document, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment, participation, purchase, negotiation, discount or otherwise), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising and whether or not contemplated by Borrower or Lender or Lender's Affiliates on the Closing Date.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Permitted Liens" will mean:</LI></P>
<P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>liens securing the payment of taxes, either not yet due or the validity of which is being contested in good faith by appropriate proceedings, and as to which Borrower has set aside on its books adequate reserves to the extent required by generally accepted accounting principles;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>deposits under workers' compensation, unemployment insurance and social security laws, or to secure the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or to secure statutory obligations or surety or appeal bonds, or to secure indemnity, performance or other similar bonds in the ordinary course of business;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>liens imposed by law, such as carrier's, warehousemen's or mechanics' liens, incurred by Borrower in good faith in the ordinary course of business, and liens arising out of a judgment or award against Borrower with respect to which Borrower will currently be prosecuting an appeal, a stay of execution pending such appeal having been secured;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>liens in favor of Lender;</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>reservations, exceptions, encroachments and other similar title exceptions or encumbrances affecting real properties, provided such do not materially detract from the use or value thereof as used by the owner thereof; and</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>attachment, judgment and similar liens provided that execution is effectively stayed pending a good faith contest.</LI></P></OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Person" will include an individual, a corporation, a limited liability company, an association, a partnership, a trust or estate, a joint stock company, an unincorporated organization, a joint venture, a government (foreign or domestic), any agency or political subdivisions thereof, or any other entity.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Prime Rate" will mean the prime commercial lending rate as quoted on Bloomberg's BTMM Screen for the second to last Business Day of the calendar month immediately preceding the applicable 1-month interest period.  If Bloomberg fails to provide such rate, the Prime Rate will be the prime rate of The Chase Manhattan Bank as announced from time to time and if neither source is available, Lender will obtain the Prime Rate from a nationally published source, as selected by Lender in its sole discretion.  Subject to any maximum or minimum interest rate limitations specified herein or by applicable law, if and when such Prime Rate changes, then in each such event, the rate of interest payable under this Agreement, any Note or any other document evidencing the Obligations that is tied to the Prime Rate will change automatically without notice effective the date of such changes.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Subsidiaries" means a corporation of which shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the Board of Directors or other managers of such corporation are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by Borrower.</LI></P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>"Tangible Net Worth" at any particular time, will mean:  (i) the sum of the amounts appearing on the balance sheet of such entity as (a) the stated value of all outstanding stock and (b) capital, paid-in and earned surplus; less (ii) the sum of (a) the deficit in any surplus or capital account, including treasury stock, (b) the amount of any write-up subsequent to the date of the last year end financial statement of such entity included in the Current Financial Statements in the book value of any asset owned on such date resulting from the revaluation thereof subsequent to such date or any write-up of any asset in excess of the costs of the assets acquired, (c) any amounts by which patents, trademarks, trade names, organizational expenses and other intangible items of similar nature and good will appear on the asset side of such balance sheet, (d) any amounts at which shares of the capital stock of Borrower appear on the asset side of such balance sheet, all as of the last day of the month previous to such particular time, and (e) any amounts for advances to shareholders, directors, officers, employees or affiliates of Borrower which appear on the asset side of the balance sheet, except those made in the ordinary course of business.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
</FONT><P ALIGN="JUSTIFY">All other terms contained in this Agreement and not otherwise defined herein will, unless the context indicates otherwise, have the meanings provided for by the Uniform Commercial Code of the State of Ohio to the extent the same are defined therein.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P>
<OL START=10>

<B><U><P ALIGN="JUSTIFY"><LI>General</B></U>.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Indemnity</B></U>.  Without limiting the generality of the foregoing, Borrower agrees that if, after receipt by Lender of any payment of all or any part of the Obligations, demand is made at any time upon Lender for the repayment or recovery of any amount or amounts received by Borrower in payment or on account of the Obligations and Lender repays all or any part of such amount or amounts by reason of any judgment, decree or order of any court or administrative body, or by reason of any settlement or compromise of any such demand, this Agreement will continue in full force and effect and Borrower will be liable, and will indemnify, defend and hold harmless Lender for the amount or amounts so repaid.  The provisions of this Section will be and remain effective notwithstanding any contrary action which may have been taken by Borrower in reliance upon such payment, and any such contrary action so taken will be without prejudice to Lender's rights under this Agreement and will be deemed to have been conditioned upon such payment having become final and irrevocable.  The provisions of this Section will survive the expiration or termination of this Agreement.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Waiver</B></U>.  No delay or omission on the part of Lender to exercise any right or power arising from any Event of default will impair any such right or power to be considered a waiver of any such right or power or a waiver of any such Event of Default or any acquiescence therein nor will the action or nonaction of Lender in case of such Event of Default impair any right or power arising as a result thereof or affect any subsequent default or any other default of the same or a different nature.  No disbursement of the Loans hereunder will constitute a waiver of any of the conditions to Lender's obligation to make further disbursements; nor, in the event that Borrower is unable to satisfy any such condition, will any such disbursement have the effect of precluding Lender from thereafter declaring such inability to be an Event of Default.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Notices</B></U>.  All notices, demands, requests, consents, approvals and other communications required or permitted hereunder will be in writing and will be conclusively deemed to have been received by a party hereto and to be effective if delivered personally to such party, or sent by telex, telecopy (followed by written confirmation) or other telegraphic means, or by overnight courier service, or by certified or registered mail, return receipt requested, postage prepaid, addressed to such party at the address set forth below or to such other address as any party may give to the other in writing for such purpose:</LI></P></OL>
</OL>
</FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=432>
<TR><TD VALIGN="TOP">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Lender: The Western and Southern Life Insurance Company</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">400 Broadway</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Cincinnati, Ohio 45202</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Attention:  Treasurer</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;&#9;</P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=432>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">To Borrower: Stifel Financial Corp.</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">500 North Broadway</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">St. Louis, Missouri 63012</FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">Attention:  Charles R. Hartman</FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY">&#9;&#9;</P><DIR>

</FONT><P ALIGN="JUSTIFY">All such communications, if personally delivered, will be conclusively deemed to have been received by a party hereto and to be effective when so delivered, or if sent by telex, telecopy of telegraphic means, on the day on which transmitted, or if sent by overnight courier service, on the day after deposit thereof with such service, or if sent by certified or registered mail, on the third business day after the day on which deposited in the mail.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P></DIR>

<OL START=4>
<OL START=4>

<B><U><P ALIGN="JUSTIFY"><LI>Successors and Assigns</B></U>.  This Agreement will be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns, provided, however, that Borrower may not assign this Agreement in whole or in part without the prior written consent of Lender and Lender at any time may assign this Agreement in whole or in part.</LI></P>
<B><U><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"><LI>Modifications</B></U>.  This Agreement, any Notes and the documents listed on the Closing Memo, constitute the entire agreement of the parties and supersede all prior agreements and understandings regarding the subject matter of this Agreement, including but not limited to any proposal or commitment letters.  No modification or waiver of any provision of this Agreement, any Note, or any of the documents listed on the Closing Memo, nor consent to any departure by Borrower therefrom, will be established by conduct, custom or course of dealing; and no modification, waiver or consent will in any event be effective unless the same is in writing and specifically refers to this Agreement, and then such waiver or consent will be effective only in the specific instance and for the purpose for which given.  No notice to or demand on Borrower in any case will entitle Borrower to any other or further notice or demand in the same, similar or other circumstance.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Remedies Cumulative</B></U>.  No single or partial exercise of any right or remedy by Lender will preclude any other or further exercise thereof or the exercise of any other right or remedy.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Illegality</B></U>.  If fulfillment of any provision hereof or any transaction related hereto or of any provision of the Notes, at the time performance of such provision is due, involves transcending the limit of validity prescribed by law, then <U>ipso</U> <U>facto</U>, the obligation to be fulfilled will be reduced to the limit of such validity; and if any clause or provisions herein contained other than the provisions hereof pertaining to repayment of the Obligations operates or would prospectively operate to invalidate this Agreement in whole or in part, then such clause or provision only will be void, as though not herein contained, and the remainder of this Agreement will remain operative and in full force and effect; and if such provision pertains to repayment of the Obligations, then, at the option of Lender, all of the Obligations of Borrower to Lender will become immediately due and payable.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Time</B></U>.  Time is of the essence in the performance of this Loan Agreement.</LI></P>
<P ALIGN="JUSTIFY"></P>
<B><U><P ALIGN="JUSTIFY"><LI>Governing Law and Jurisdiction: No Jury Trial</B></U>.  THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND BORROWER HEREBY AGREES TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN HAMILTON COUNTY, OHIO AND CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO BORROWER AT BORROWER'S ADDRESS SET FORTH HEREIN FOR NOTICES AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME HAS BEEN DEPOSITED IN U.S. MAILS, POSTAGE PREPAID; PROVIDED THAT NOTHING CONTAINED HEREIN WILL PREVENT LENDER FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY OR AGAINST BORROWER INDIVIDUALLY, OR AGAINST ANY PROPERTY OF BORROWER, WITHIN ANY OTHER STATE OR NATION.  BORROWER WAIVES ANY OBJECTION BASED ON <U>FORUM NON CONVENIENS</U> AND ANY OBJECTION TO VENUE OR ANY ACTION INSTITUTED HEREUNDER.  BORROWER AND LENDER EACH WAIVE ANY RIGHT TO TRAIL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY DOCUMENTS EVIDENCING ANY OF THE OBLIGATIONS, OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH AGREEMENTS.</LI></P></OL>
</OL>

<B><U><P ALIGN="JUSTIFY"></P>
</B></U></FONT><P ALIGN="JUSTIFY">&#9;Executed as of December 30, 1997.</P>
<FONT SIZE=2><P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=330>
<TR><TD VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">THE WESTERN AND SOUTHERN</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">LIFE INSURANCE COMPANY</B></FONT></TD>
</TR>
</TABLE>
</P>

<FONT SIZE=2><P ALIGN="JUSTIFY"></P></FONT>
<P ALIGN="RIGHT"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=330>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><P ALIGN="JUSTIFY">By: <U>                                          </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Print Name: <U>                              </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Title: <U>                                              </U>&#9;<U>&#9;</U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">By: <U>                                           </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Print Name: <U>                                     </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Title:  <U>                                                  </U>&#9;<U>&#9;</U></FONT></TD>
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<B><FONT SIZE=2><P ALIGN="JUSTIFY">STIFEL FINANCIAL CORP</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">By:<U>             /s/ Ronald J. Kruszewski                                      </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Print Name:    <U>Ronald J. Kruszewski                                     </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Title:               <U>President and Chief Executive Officer </U></FONT></TD>
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<P ALIGN="JUSTIFY">&#9;<B>.</P>
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<B><P ALIGN="CENTER">PROMISSORY NOTE</P>
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<P ALIGN="JUSTIFY">$5,000,000&#9;Cincinnati, Ohio</P>
<P ALIGN="JUSTIFY">&#9;December 30, 1997</P>
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<P ALIGN="JUSTIFY">&#9;FOR VALUE RECEIVED, <B>STIFEL FINANCIAL CORP.</B> ("Borrower"), promises to pay to the order of <B>THE WESTERN AND SOUTHERN LIFE INSURANCE COMPANY</B> ("Lender"), at its offices located at 400 Broadway, Cincinnati, Ohio 45202 or such other location as Lender may from time to time designate, the principle sum of FIVE MILLION DOLLARS ($5,000,000), together with interest thereon as provided below from the date of disbursement thereof until paid, all in lawful money of the United States of America and in immediately available funds.</P>
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<B><U><P ALIGN="JUSTIFY"><LI>Rate of Interest</LI></P></OL>

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<OL>
<OL>

<P ALIGN="JUSTIFY"><LI>Subject to the applicability of the Default Rate as provided below, this Note will bear interest at a rate per annum equal to 1.0% plus the LIBOR Rate for a 1-month interest period.  All interest calculations under this Note will be made based on a year of 360 days for the actual number of days in each interest period.  In no event will the rate of interest hereunder exceed the maximum rate permitted by law.</LI></P>
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<P ALIGN="JUSTIFY"><LI>If at any time or times Lender determines (which determination will be conclusive and binding) that by reason of circumstances affecting the interbank eurodollar market, adequate and reasonable means do not exist for ascertaining the LIBOR Rate, Lender promptly will give notice of such determination and the basis therefor to Borrower.  If such notice is given, and until such notice has been withdrawn by Lender, this Note will bear interest at a rate per annum equal to the Prime Rate.</LI></P></OL>
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<B><U><P ALIGN="JUSTIFY"><LI>Payments and Application of Payments</B></U>.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Accrued interest will be due and payable monthly, commencing on February 1, 1998 and continuing on the first day of each month thereafter until June 30, 1999, on which date (if this Note is not sooner due and payable pursuant to Section 2.2, below) the entire outstanding principal balance hereunder and all accrued and unpaid interest will be due and payable in full.</LI></P>
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<P ALIGN="JUSTIFY"><LI>At any time after 12 months from the date hereof, the entire outstanding principal balance and all accrued but unpaid interest under this Note will be due and payable in full 60 days after written demand from Lender.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Payments received will be applied in the following order:  (i) to repayment of any amounts owed to Lender for charges, fees and expenses (including Attorneys Fees), (ii) to accrued interest, and (iii) to principal.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Prepayments in full or in part may be made under this Note at any time without premium or penalty; provided that each such payment will be applied in the order set forth in Section 2.3, above, and to the extent applied to principal, will be applied to the net balance of principal due at maturity.</LI></P></OL>

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<B><U><P ALIGN="JUSTIFY"><LI>Late Payments</B></U>.  Any payment under this Note must be received by Lender by 2:00 p.m. Cincinnati time on a Business Day in order to be credited on such date.  If any payment of principal, interest or other amount due under this Note is not paid within 15 calendar days of the date due, Borrower also will pay to Lender a late charge equal to 5% of the amount of such payment.  The foregoing charge is imposed for the purpose of defraying Lender's expenses incident to the handling of delinquent payments.</LI></P>
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<B><U><P ALIGN="JUSTIFY"><LI>Loan Agreement</B></U>.  This Note is issued in connection with the Loan Agreement of even date herewith between Borrower and Lender (the "Loan Agreement").  All references to the Loan Agreement will include all amendments thereto as made from time to time.  The terms, covenants, conditions, stipulations and agreements contained in the Loan Agreement are incorporated herein by reference.  Capitalized terms used in this Note and not otherwise defined herein will have the meanings given such terms in the Loan Agreement.</LI></P>
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<B><U><P ALIGN="JUSTIFY"><LI>Events of Default</B></U>.  Immediately and automatically upon the filing by or against Borrower of a petition in bankruptcy, for a reorganization, arrangement or debt adjustment, or for a receiver, trustee, or similar creditors' representative for its property or any part thereof, or of any other proceeding under any federal or state insolvency or similar law (and if such petition or proceeding is an involuntary petition or proceeding filed against Borrower without its acquiescence therein or thereto at any time, the same is not promptly contested and, within 60 days of the filing of such involuntary petition or proceeding, dismissed or discharged), or the making of any general assignment by Borrower for the benefit of creditors, or Borrower dissolves or is the subject of any dissolution, winding up or liquidation or, at the option of Lender, immediately upon the occurrence of any other Event of Default, in any case without demand or notice of any kind (which are hereby expressly waived):  (i) the outstanding principal balance hereunder, together with all accrued and unpaid interest thereon, and any additional amounts secured by the Loan Documents will be accelerated and become immediately due and payable, (ii) Borrower will pay to Lender all reasonable costs and expenses (including but not limited to Attorneys Fees) incurred by Lender in connection with Lender's efforts to collect the indebtedness evidenced hereby, and (iii) Lender may exercise from time to time any of the rights and remedies available to Lender under the Loan Agreement or applicable law.  Upon and after the occurrence of any Event of Default or the maturity of this Note (by acceleration or otherwise), the principal balance under this Note, together with any arrearage of interest, will bear interest at the Default Rate until paid in full, whether before or after judgment.  Borrower, all other makers, co-signers and indorsers waive presentment, demand, protest, and notice of demand, protest, non-payment and dishonor.  Borrower also waives all defenses based on suretyship or impairment of collateral.</LI></P>
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<B><U><P ALIGN="JUSTIFY"><LI>Definitions</B></U>.  For purposes hereof "LIBOR Rate" will mean the London Interbank Offered Rate for U.S. dollars, as quoted on Bloomberg's BBAM Screen for the second to last Business Day of the calendar month immediately preceding the applicable 1-month interest period.  If Bloomberg fails to provide such rate, Lender will obtain the LIBOR Rate from a comparable nationally published source, as selected by Lender in its sole discretion.</LI></P>
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<B><U><P ALIGN="JUSTIFY"><LI>Miscellaneous</B></U>.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Nothing contained in this Note regarding late charges or the Default Rate will be construed in any way to extend the due date of any payment or waive any payment default, and each such right is in addition to, and not in lieu of, the other and any other rights and remedies of Lender hereunder, under any of the Loan Agreement or under applicable law (including, without limitation, the right to interest, Attorneys Fees and other expenses).</LI></P>
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<P ALIGN="JUSTIFY"><LI>This Note will bind Borrower and its successors and assigns, and the benefits hereof will inure to the benefit of Lender and its successors and assigns.  All references herein to "Borrower" and "Lender" will include the respective successors and assigns thereof; provided, however, that Borrower may not assign this Note in whole or in part without the prior written consent of Lender and Lender at any time may assign this Note in whole or in part (but no assignment by the Lender of less than all of this Note will operate to relieve Borrower from any duty to Lender with respect to the unassigned portion of this Note).</LI></P>
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<P ALIGN="JUSTIFY"><LI>If any provision of this Note is prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision and without invalidating any other provision in this Note; provided, however, that if the provision that is the subject of such prohibition or invalidity pertains to repayment of this Note, then, at the option of Lender, all of the obligations hereunder will become immediately due and payable.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Without limiting the generality of the foregoing, if from any circumstances whatsoever the fulfillment of any provision of this Note involves transcending the limit of validity prescribed by any applicable usury statute or any other applicable law with regard to obligations of like character and amount, then the obligation to be fulfilled will be reduced to the limit of such validity as provided in such statute or law, so that in no event will any exaction of interest be possible under this Note in excess of the limit of such validity and the right to demand any such excess is hereby expressly waived by Lender.  As used in this paragraph, "applicable usury statute" and "applicable law" mean such statute and law in effect on the date hereof, subject to any change therein that results in a higher permissible rate of interest.</LI></P>
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<P ALIGN="JUSTIFY"><LI>No delay or failure on the part of Lender to exercise any right, remedy or power hereunder, under any of the other Loan Documents or under applicable law will impair or waive any such right, remedy or power (or any other right, remedy or power), be considered a waiver of or an acquiescence in any breach, Default or Event of Default or affect any other or subsequent breach, Default or Event of Default of the same or a different nature.  No waiver of any breach, Default or Event of Default, nor any modification, waiver, discharge or termination of any provision of this Note, nor consent to any departure by Borrower therefrom, will be established by conduct, custom or course of dealing; and no modification, waiver, discharge, termination or consent will in any event be effective unless the same is in writing, signed by Lender and specifically refers to this Note, and then such modification, waiver, discharge or termination or consent will be effective only in the specific instance and for the specific purpose for which given.  No notice to or demand on Borrower in any case will entitle Borrower to any other or further notice or demand in the same or any similar or other circumstance.</LI></P>
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<P ALIGN="JUSTIFY"><LI>No single or partial exercise of any right or remedy by Lender will preclude any other or further exercise thereof or the exercise of any other right or remedy.  All remedies hereunder, under any of the other Loan Documents, or now or hereafter existing at law or in equity are cumulative and none of them will be exclusive of the others or of any other right or remedy.  All such rights and remedies may be exercised separately, successively, concurrently, independently or cumulatively from time to time and as often and in such order as Lender may deem appropriate.</LI></P>
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<P ALIGN="JUSTIFY"><LI>If at any time all or any part of any payment or transfer of any kind received by Lender with respect to all or any part of this Note is repaid, set aside or invalidated by reason of any judgment, decree or order of any court or administrative body, or by reason of any agreement, settlement or compromise of any claim made at any time with respect to the repayment, recovery, setting aside or invalidation of all or any part of such payment or transfer, Borrower's obligations under this Note will continue (and/or be reinstated) and Borrower will be and remain liable, and will indemnify, defend and hold harmless Lender for, the amount or amounts so repaid, recovered, set aside or invalidated and all other claims, demands, liabilities, judgments, losses, damages, costs and expenses incurred in connection therewith.  The provisions of this Section will be and remain effective notwithstanding any contrary action which may have been taken by Borrower in reliance upon such payment or transfer, and any such contrary action so taken will be without prejudice to Lender's rights hereunder and will be deemed to have been conditioned upon such payment or transfer having become final and irrevocable.  The provisions of this Section will survive any termination, cancellation or discharge of this Note.</LI></P>
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<P ALIGN="JUSTIFY"><LI>Time is of the essence in the performance of this Note.</LI></P>
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<P ALIGN="JUSTIFY"><LI>This Note has been delivered and accepted at and will be deemed to have been made at Cincinnati, Ohio and will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State of Ohio, without regard to conflicts of law principles.</LI></P>
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<B><I><P ALIGN="JUSTIFY"><LI>Borrower hereby irrevocably agrees and submits to the exclusive jurisdiction of any state or federal court located within Hamilton County, Ohio, or, at the option of Lender in its sole discretion, of any state or federal court(s) located within any other county, state or jurisdiction in which Lender at any time or from time to time chooses in its sole discretion to bring an action or otherwise exercise a right or remedy, and Borrower waives any objection based on <U>forum non conveniens</U> and any objection to venue of any such action or proceeding.  Borrower hereby irrevocably consents that all service of process be made by certified mail directed to Borrower at its address set forth in the Loan Agreement for notices and service so made will be deemed to be completed the earlier of Borrower's actual receipt thereof or five (5) Business Days after the same has been deposited in U.S. Mails, postage prepaid.  Nothing contained herein will prevent Lender from serving process in any other manner permitted by law.  Borrower and Lender each waive any right to trial by jury in any action or proceeding relating to this Note, the Loan Agreement, the Obligations or any actual or proposed transaction or other matter contemplated in or relating to any of the foregoing.</LI></P></OL>
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<B><FONT SIZE=2><P ALIGN="JUSTIFY">STIFEL FINANCIAL CORP</B></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">By:<U>             /s/ Ronald J. Kruszewski                                      </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Print Name:    <U>Ronald J. Kruszewski                                     </U></FONT></TD>
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<FONT SIZE=2><P ALIGN="JUSTIFY">Title:               <U>President and Chief Executive Officer </U></FONT></TD>
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