<SUBMISSION>
<ACCESSION-NUMBER>0000720672-01-500017
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20010930
<FILING-DATE>20011114
<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>1790076
</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-200109.htm
<DESCRIPTION>FORM 10-Q FOR THE PERIOD ENDING 09/30/01
<TEXT>
<HTML>
<HEAD>
<TITLE>SECURITIES AND EXCHANGE COMMISSION</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<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">For the quarterly period ended <U>&#9;September 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">For the transition period from <U>&#9;</U> to <U>&#9;</P>
</U><P ALIGN="CENTER">Commission file number <U>&#9;1-9305&#9;</P></DIR>
</DIR>
</U>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=384>
<TR><TD VALIGN="TOP">
<P ALIGN="CENTER"><B><U><FONT SIZE=4>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>

<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="CENTER"><U>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">&nbsp;</FONT></TD>
<TD WIDTH="50%" VALIGN="TOP">
<P>&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>
</CENTER></P>

<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>

<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">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes (x) No </P>
<P ALIGN="JUSTIFY">Shares of common stock outstanding at October 31, 2001: 7,330,735, par value $0.15.</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">September 30, 2001</P>
</B></FONT><P ALIGN="CENTER">&nbsp;</P>
<B><P>&#9;</P>
<FONT SIZE=4><P ALIGN="CENTER">PART I. FINANCIAL INFORMATION </P>
</FONT><P>Item 1. Financial Statements (Unaudited)</P></B>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=619>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Financial Condition --</P><DIR>

<P>September 30, 2001 and December 31, 2000</DIR>
</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">3</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Operations --</P><DIR>

<P>&#9;&#9;Three and Nine Months Ended September 30, 2001 and September</P>
<P>30, 2000</DIR>
</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">4</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Consolidated Statements of Cash Flows--</P><DIR>

<P>&#9;&#9;Nine Months Ended September 30, 2001 and September 30, 2000</DIR>
</TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">5</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Notes to Consolidated Financial Statements</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">6 - 9</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<B><P>Item 2. Management's Discussion and Analysis of Financial Condition and </P><DIR>

<P>&#9; Results of Operations</DIR>
</B></TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<P ALIGN="CENTER">10 -13</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<B><P>Item 3. Quantitative and Qualitative Disclosure about Market Risk</B></TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">13</TD>
</TR>
</TABLE>

<P>&nbsp;</P>
<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">13</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">13</TD>
</TR>
<TR><TD WIDTH="89%" VALIGN="TOP">
<P>Signatures</TD>
<TD WIDTH="11%" VALIGN="TOP">
<P ALIGN="CENTER">14</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><P><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR><DIR>&#9;                                                                                                           Unaudited     &#9;Audited</P></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR></DIR>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=4 WIDTH=691>
<TR><TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">September 30, 2001</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=1><P ALIGN="RIGHT">December 31, 2000</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<U><FONT SIZE=2><P>ASSETS</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Cash and cash equivalents</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 14,415</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 14,589</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Cash segregated for the exclusive benefit of customers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">191</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">187</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Receivable from brokers and dealers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">36,777</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">30,730</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Receivable from customers, net of allowance for doubtful receivables of $154 and $104, respectively </FONT></TD>
<TD WIDTH="16%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">271,677</FONT></TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">305,478</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Securities owned, at fair value</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">14,326</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,212</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Securities owned and pledged, at fair value</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">17,780</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,548</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Investments</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">30,557</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">32,478</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Membership in exchanges, at cost</FONT></TD>
<TD WIDTH="16%" 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="66%" VALIGN="TOP">
<FONT SIZE=2><P>Office equipment and leasehold improvements, at cost, net of allowances for depreciation and amortization of $17,510 and $15,085, respectively </FONT></TD>
<TD WIDTH="16%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">10,529</FONT></TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">9,689</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Goodwill, net of accumulated amortization of $1,130 and $984, respectively </FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,804</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">5,261</FONT></TD>
</TR>
<TR><TD WIDTH="66%" 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 $459 and $331, respectively </FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">22,192</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">17,420</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Deferred income tax</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,907</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,036</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Other assets</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">15,548</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">14,221</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;&#9;Total Assets</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$443,166</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$458,312</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<U><FONT SIZE=2><P>LIABILITIES AND STOCKHOLDERS' EQUITY</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">Liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Short-term borrowings </FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 105,450</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 88,250</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Payable to brokers and dealers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">134,273</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">155,522</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Payable to customers</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">30,631</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">40,484</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Securities sold, but not yet purchased, at fair value</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,694</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,355</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Drafts payable</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">14,758</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">19,034</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Accrued employee compensation</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">12,119</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">19,500</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Obligations under capital leases</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,169</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,771</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Accounts payable and accrued expenses</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">17,602</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">20,620</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Long-term debt</FONT></TD>
<TD WIDTH="16%" 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="66%" VALIGN="TOP">
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="16%" 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="66%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;Total Liabilities</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">363,294</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">384,134</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P>Subordinated Debt</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">2,629</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">- -</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">Stockholders' Equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Preferred stock -- $1 par value; authorized 3,000,000 shares;<BR>
none issued </FONT></TD>
<TD WIDTH="16%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">- - </FONT></TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">- -</FONT></TD>
</TR>
<TR><TD WIDTH="66%" 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="16%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">1,152</FONT></TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<FONT SIZE=2><P ALIGN="RIGHT">1,129</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Additional paid-in capital</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">49,008</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">45,920</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Retained earnings</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">32,983</U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">32,827</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">83,143</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">79,876</B></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>Less:</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Treasury stock, at cost, 335,895 and 297,879 shares, respectively</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,395</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,938</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Unamortized expense of restricted stock awards </FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">56</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">155</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Unearned employee stock ownership plan shares, at cost, 191,139 and 203,337 shares, respectively </FONT></TD>
<TD WIDTH="16%" VALIGN="MIDDLE">
<U><FONT SIZE=2><P ALIGN="RIGHT">2,449</U></FONT></TD>
<TD WIDTH="18%" VALIGN="MIDDLE">
<U><FONT SIZE=2><P ALIGN="RIGHT">2,605</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;Total Stockholders' Equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">77,243</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">74,178</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP">
<B><FONT SIZE=2><P>&#9;&#9;Total Liabilities and Stockholders' Equity</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$443,166</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$458,312</B></U></FONT></TD>
</TR>
</TABLE>
<DIR>
<DIR>
<DIR>

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

</FONT><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><P ALIGN="CENTER">(UNAUDITED)</P>
<P ALIGN="CENTER">(In thousands, except per share amounts)</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=792>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="31%" VALIGN="TOP" COLSPAN=4>
<B><U><P ALIGN="CENTER">Three Months Ended</P>
<P ALIGN="CENTER">September 30, </B></U></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="CENTER">Nine Months Ended</P>
<P ALIGN="CENTER">September 30,</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<U><P>REVENUES</U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Commissions</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 16,441</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">$ 20,114</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 55,415</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">$ 65,489</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Principal transactions</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 6,884</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 7,033</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 22,696</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 22,523</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Investment banking</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 10,995</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 4,774</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 26,879</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 12,409</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Interest</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 5,158</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 9,381</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 17,120</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 26,352</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Other</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">7,079</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><P ALIGN="RIGHT">7,352</U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">20,584</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<U><P ALIGN="RIGHT">22,040</U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<B><P>&#9;&#9;Revenues</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">46,557</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">48,654</B></U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">142,694</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><U><P ALIGN="RIGHT">148,813</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Interest expense</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2,947</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><P ALIGN="RIGHT">5,278</U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">10,031</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<U><P ALIGN="RIGHT">15,312</U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<B><P>&#9;&#9;&#9;Net revenues</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">43,610</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">43,376</B></U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">132,663</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><U><P ALIGN="RIGHT">133,501</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<U><P>EXPENSES</U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Employee compensation and benefits</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">30,077</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">27,823</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">89,849</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 87,821</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Occupancy and equipment rental</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 4,531</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 3,781</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 13,058</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 10,803</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Communications and office supplies</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 2,585</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 2,744</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 8,265</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 7,984</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Commissions and floor brokerage</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 994</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9; 801</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9; 2,778</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9; 2,547</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Other operating expenses</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U> 7,946</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><P ALIGN="RIGHT">&#9; 4,375</U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">&#9; 17,326</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<U><P ALIGN="RIGHT">&#9; 11,548</U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>
<DIR>

<B><P>Total operating expenses</DIR>
</DIR>
</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U> 46,133</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">&#9; 39,524</B></U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">&#9;131,276</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><U><P ALIGN="RIGHT">&#9;120,703</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>
<DIR>
<DIR>

<B><P>Income (loss) before income taxes</DIR>
</DIR>
</DIR>
</B></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><P ALIGN="RIGHT">&#9; (2,523)</B></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<B><P ALIGN="RIGHT">&#9; 3,852</B></TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<B><P ALIGN="RIGHT">&#9; 1,387</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><P ALIGN="RIGHT">12,798</B></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Provision (benefit) for income taxes</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">(995)</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<U><P ALIGN="RIGHT">1,538</U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">547</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<U><P ALIGN="RIGHT">4,742</U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<B><P>&#9;&#9;Net income (loss) </B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$ (1,528)</B></U></TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$ 2,314</B></U></TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;<U>$ 840</B></U></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<B><P ALIGN="RIGHT">&#9;<U>$ 8,056</B></U></TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Earnings (Loss) per share:</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>

<P>&#9;Basic</DIR>
</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$ (0.21)</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$ 0.33</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$ 0.12</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9;$ 1.15</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>

<P>&#9;Diluted</DIR>
</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$ (0.21)</B></TD>
<TD WIDTH="15%" VALIGN="BOTTOM">
<P ALIGN="RIGHT">&#9;$ 0.30</TD>
<TD WIDTH="1%" VALIGN="BOTTOM" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<B><P ALIGN="RIGHT">&#9;$ 0.10</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9;$ 1.06</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&#9;Dividends declared per share</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$ 0.03</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">&#9;$ 0.03</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">&#9;$ 0.09</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">&#9;$ 0.09</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>Average common equivalent <BR>
Shares outstanding: </TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>

<P>&#9;Basic</DIR>
</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,175</B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">7,050</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,168</B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">6,999</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP"><DIR>

<P>&#9;Diluted</DIR>
</TD>
<TD WIDTH="15%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,175 </B></TD>
<TD WIDTH="15%" VALIGN="TOP">
<P ALIGN="RIGHT">7,718 </TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><P ALIGN="RIGHT">8,030 </B></TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P ALIGN="RIGHT">7,612</TD>
</TR>
<TR><TD WIDTH="35%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2><P>See Notes to Consolidated Financial Statements.</P>
</FONT><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<FONT FACE="Tms Rmn,Times New Roman"><P ALIGN="CENTER">&nbsp;</P>
</FONT><B><P ALIGN="CENTER"><A NAME="Cash_Flow_1"><A NAME="Statements_of_Operations_2"></A>STIFEL FINANCIAL CORP. AND SUBSIDIARIES</P>
<P ALIGN="CENTER"></A>CONSOLIDATED STATEMENTS OF CASH FLOWS</P>
</B><P ALIGN="CENTER">(UNAUDITED)(In thousands)</P>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Nine Months Ended</P></B></U></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=5 WIDTH=643>
<TR><TD WIDTH="55%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">September 30, 2001</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">September 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">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>Net income </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;840</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;8,056</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<I><FONT SIZE=2><P>Noncash and nonoperating items included in earnings:</I></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Depreciation and amortization </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">3,107</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,411</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Bonus notes amortization </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">3,961</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,877</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Realized &amp; unrealized (gain)/losses </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">1,357</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(297)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Deferred items </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">84</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">54</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Amortization of restricted stock awards, units,and stock benefits </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="MIDDLE">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">1,329</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="MIDDLE">
<U><FONT SIZE=2><P ALIGN="RIGHT">1,157</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">10,678</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">13,258</B></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><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>

<FONT SIZE=2><P>Operating receivables </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">27,754</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(43,262)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Cash segregated for the exclusive benefit of customers </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(4)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(5)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Securities owned </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(7,346)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(1,113)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Notes receivable from officers and employees </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(8,733)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(8,066)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=20><DIR>

<FONT SIZE=2><P>Other assets </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=20>
<B><FONT SIZE=2><P ALIGN="RIGHT">(1,031)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=20>
<FONT SIZE=2><P ALIGN="RIGHT">(2,417)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Increase (decrease) in liabilities:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Operating payables </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(31,102)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">17,351</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Securities sold, but not yet purchased </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">8,339</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,612</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Drafts payable, accrued employee compensation, and accounts payable and accrued expenses </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="MIDDLE">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(12,043)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="MIDDLE">
<U><FONT SIZE=2><P ALIGN="RIGHT">(5,301)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=2><P>Cash Flows From Operating Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(13,488)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(27,943)</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=2><P><A NAME="Cash_Flow_2"></A>CASH FLOWS FROM INVESTING ACTIVITIES</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Proceeds from:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

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

<FONT SIZE=2><P>Sale of investments </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">344</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">465</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Payments for:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Acquisition of office equipment and leasehold improvements </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM">
<B><FONT SIZE=2><P ALIGN="RIGHT">(3,768)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">(3,225)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Acquisition of investments </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(170)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(5,115)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=2><P>Cash Flows From Investing Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(3,594)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(4,948)</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=2><P>CASH FLOWS FROM FINANCING ACTIVITIES</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Short-term borrowings, net </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">17,200</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">33,035</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Proceeds from:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Issuance of stock </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">1,737</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,567</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Payments for:</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Settlements of long-term debt </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">- -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(370)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Purchase of stock for treasury </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(743)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(1,475)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Repayment of notes assumed in acquisition of subsidiary </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">- -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(1,500)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Principal payments under capital lease obligation </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">(602)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(429)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Cash dividends </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(684)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(676)</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=2><P>Cash Flows From Financing Activities</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">16,908</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">30,152</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP" HEIGHT=16><DIR>

<FONT SIZE=2><P>Decrease in cash and cash equivalents </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="RIGHT">(174)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(2,739)</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Cash and cash equivalents -beginning of period </DIR>
</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">14,589</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">16,861</U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<B><FONT SIZE=2><P>Cash and Cash Equivalents -end of period</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;14,415</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;14,122</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=2><P>Supplemental disclosure of cash flow information:</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Income tax payments</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;2,896</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;2,596</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Interest payments</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;10,817</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;15,109</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<U><FONT SIZE=2><P>Schedule of noncash investing and financing activities:</U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Employee stock ownership plan </FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$ &#9;145</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;129</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Acquisition of Hanifen, Imhoff Inc.</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">&#9;- -</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;4,746</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Restricted stock awards and stock units, net of forfeitures</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;2,439</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;4,227</FONT></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<FONT SIZE=2><P>&#9;Deferred Compensation converted to subordinated borrowings</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;2,629</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#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>
<P ALIGN="JUSTIFY">NOTE A -REPORTING POLICIES</P>
<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 nine months ended September 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 September 30, 2001, SN &amp; Co. had net capital of $36,811,051, which was 11.44% of its aggregate debit items, and $30,378,254 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 September 30, 2001, the fair value of securities received as collateral where the Company is permitted to sell or repledge the securities was $364,868,000 and the fair value of the collateral that had been sold or repledged was $278,534,000. </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 132 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 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 CELLSPACING=0 BORDER=0 WIDTH=649>
<TR><TD WIDTH="30%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=5>
<B><U><P ALIGN="CENTER">Three Months Ended</P>
<P ALIGN="CENTER">September 30, </B></U></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=4>
<B><U><P ALIGN="CENTER">Nine Months Ended</P>
<P ALIGN="CENTER">September 30, </B></U></TD>
</TR>
<TR><TD WIDTH="30%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
<TD WIDTH="28%" VALIGN="TOP" COLSPAN=3>
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="16%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Net Revenues</B></U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9;30,829</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;32,761</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=13>
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 95,072</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2 HEIGHT=13>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9; 102,959</FONT></TD>
<TD VALIGN="MIDDLE" HEIGHT=13><P></P></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="RIGHT">7,283</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">4,199</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">18,371</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">12,572</FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="RIGHT">4,004</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">2,760</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">14,055</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">7,188</FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Other</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">1,494</B></U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<U><FONT SIZE=2><P ALIGN="RIGHT">3,656</U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">5,165</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<U><FONT SIZE=2><P ALIGN="RIGHT">10,782</U></FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2><DIR>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">&#9;Total Net Revenues</DIR>
</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;43,610</B></U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;43,376</B></U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 132,663</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9;133,501</B></U></FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="JUSTIFY">Operating Contribution</B></U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="17%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Private Client</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 3,336</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9; 6,070</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 11,348</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">$&#9; 21,008</FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Equity Capital Markets</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="RIGHT">1,232</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">144</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">2,804</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">319</FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Fixed Income Capital Markets</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><FONT SIZE=2><P ALIGN="RIGHT">728</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">247</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">4,113</B></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="RIGHT">62</FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2>
<FONT SIZE=2><P ALIGN="JUSTIFY">Other/ unallocated overhead</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(7,819)</B></U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,609)</U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">(16,878)</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<U><FONT SIZE=2><P ALIGN="RIGHT">(8,591)</U></FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="TOP" COLSPAN=2><DIR>

<B><FONT SIZE=2><P ALIGN="JUSTIFY">Pre-Tax Income (Loss)</DIR>
</B></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; (2,523)</B></U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 3,852</B></U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 1,387</B></U></FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=2>
<B><U><FONT SIZE=2><P ALIGN="RIGHT">$&#9; 12,798</B></U></FONT></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</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 nine months ended September 30, are as follows (in thousands, except per share amounts): </P>
<TABLE CELLSPACING=0 BORDER=0 WIDTH=702>
<TR><TD WIDTH="45%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=5>
<B><U><P ALIGN="CENTER">Three Months Ended</P>
<P ALIGN="CENTER">September 30, </B></U></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=4>
<B><U><P ALIGN="CENTER">Nine Months Ended</P>
<P ALIGN="CENTER">September 30,</B></U></TD>
</TR>
<TR><TD WIDTH="45%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2>
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
<TD WIDTH="20%" VALIGN="TOP" COLSPAN=3>
<B><U><P ALIGN="RIGHT">2001</B></U></TD>
<TD WIDTH="12%" VALIGN="TOP">
<B><U><P ALIGN="RIGHT">2000</B></U></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><I><U><P ALIGN="JUSTIFY">Income Available to Common Stockholders</B></I></U></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="JUSTIFY">Net Income (Loss)</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="JUSTIFY">$(1,528)</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 2,314</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 840</B></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 8,056</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD VALIGN="MIDDLE" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><I><U><P ALIGN="JUSTIFY">Weighted Average Shares Outstanding</B></I></U></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P>&nbsp;</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="JUSTIFY">Basic Weighted Average Shares Outstanding:</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="CENTER">7,175</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">7,050</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="RIGHT">7,168</B></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">6,999</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2><DIR>

<P>Potential Common Shares From Employee Benefit Plans</DIR>
</TD>
<TD WIDTH="5%" VALIGN="MIDDLE" COLSPAN=2>
<U><P ALIGN="CENTER">868</U></TD>
<TD WIDTH="5%" VALIGN="MIDDLE" COLSPAN=2>
<U><P ALIGN="RIGHT">668</U></TD>
<TD WIDTH="14%" VALIGN="MIDDLE">
<U><P ALIGN="RIGHT">862</U></TD>
<TD WIDTH="16%" VALIGN="MIDDLE" COLSPAN=2>
<U><P ALIGN="RIGHT">613</U></TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><P>Diluted Weighted Average Shares Outstanding </B></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2>
<B><P ALIGN="CENTER">7,175 </B><FONT SIZE=1>(1)</FONT></TD>
<TD WIDTH="5%" VALIGN="BOTTOM" COLSPAN=2>
<P ALIGN="RIGHT">7,718</TD>
<TD WIDTH="14%" VALIGN="BOTTOM">
<B><P ALIGN="RIGHT">8,030</B></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2>
<P ALIGN="RIGHT">7,612</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=6><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2 HEIGHT=6><P></P></TD>
<TD VALIGN="MIDDLE" HEIGHT=6><P></P></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><P>Basic Earnings (Loss) Per Share </B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="CENTER">$ (0.21)</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 0.33</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 0.12</B></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 1.15</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP" COLSPAN=2>
<B><P>Diluted Earnings (Loss) Per Share </B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<B><P ALIGN="CENTER">$(0.21)</B></TD>
<TD WIDTH="5%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 0.30</TD>
<TD WIDTH="14%" VALIGN="TOP">
<B><P ALIGN="RIGHT">$ 0.10</B></TD>
<TD WIDTH="16%" VALIGN="TOP" COLSPAN=2>
<P ALIGN="RIGHT">$ 1.06</TD>
<TD VALIGN="MIDDLE">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=1><P ALIGN="JUSTIFY">(1) Potential Common Shares are anti-dilutive</P>
</FONT><B><P ALIGN="JUSTIFY">NOTE F - SUBSEQUENT EVENTS</P>
</B><P ALIGN="JUSTIFY">On October 24, 2001, the Company's Board of Directors declared a regular quarterly cash dividend of $0.03 per share, payable on November 22, 2001 to stockholders of record as of the close of business on November 8, 2001.</P>
<P ALIGN="JUSTIFY">On November 1, 2001, the District Court of Oklahoma County in the State of Oklahoma issued a decision in the "State of Oklahoma, ex rel. Gary Piper; and Gary Piper, for himself and for all other taxpayers of the City of Oklahoma City v. Robert M. Cochran; Stifel, Nicolaus &amp; Company, Incorporated; Dillon, Read &amp; Co Inc.; Leo Oppenheim &amp; Co. Inc.; A. G. Edwards &amp; Sons, Inc.; and The City of Oklahoma City", filed by an individual taxpayer pursuant to the State of Oklahoma Qui Tam statutes, which found that the Company breached its underwriting agreement and duty owed to the city of Oklahoma City, Oklahoma in a 1993 refunding bond issue in connection with receipt of a markup on government securities sold to the City to establish the refunding escrow. Treble damages, as required by Oklahoma's statutes, were awarded the plaintiff. The Company has included in the results of operations, for the period ending September 30, 2001, a pretax charge of approximately $3.4 million or $0.26 per diluted share for this and related Oklahoma matters in excess of amounts previously provided (See Part II. Item 1. Legal Proceedings). </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 transfers 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 nine-month periods ended September 30, 2001 were approximately $23,000 and $146,000, 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><DIR>
<DIR>

</FONT><B><U><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></DIR>
</DIR>

</FONT><FONT FACE="Tms Rmn,Times New Roman" SIZE=4><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">The tragic events of September 11 and the subsequent four-day closure of the major markets compounded already difficult market conditions experienced industrywide. Major market indices, principally the NASDAQ composite and the Dow Jones Industrial Average ("DJIA"), key indicators of investor confidence in the market have declined significantly. The NASDAQ composite began 2001 at 2470, down 40% from the previous year start of 4069, and dropped to the current year low of 1423 on September 21, 2001 and closed September 28, 2001 at 1499, a 39% drop from the January 2001 opening. The DJIA showed a similar trend beginning the year at 10788 and falling to a low of 8236 on September 21, 2001 and closed September 28, 2001 at 8848, a 18% drop from the January 2001 opening<B><I>. </B></I>As a result the Company's average trading volume in listed and over the counter equity products declined 7% and 24%, respectively, in the first nine months 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 nine months ended September 2001 as compared to September 2000 </P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=564>
<TR><TD WIDTH="69%" VALIGN="TOP">
<P ALIGN="RIGHT"><B>Three Months Ended</B></TD>
<TD WIDTH="31%" VALIGN="TOP">
<B><P ALIGN="RIGHT">Nine Months Ended</B></TD>
</TR>
</TABLE>
</CENTER></P>

<P ALIGN="CENTER"></P>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=2 WIDTH=564>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=32>
<P ALIGN="CENTER"><FONT SIZE=2>Increase (Decrease)</P>
<P ALIGN="CENTER">(Dollars in thousands)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=32>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Amount</B></U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=32>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Percentage</B></U></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=32>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Amount</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=32>
<B><U><FONT SIZE=2><P ALIGN="CENTER">Percentage</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" 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" HEIGHT=17>
<FONT SIZE=2><P>Commissions</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">$ (3,673)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(18)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">$ (10,074)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(15)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P>Principal transactions</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(149)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(2)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">173</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" HEIGHT=17>
<FONT SIZE=2><P>Investment banking</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">6,221</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">130%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">14,470</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">117%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P>Interest</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(4,223)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(45)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(9,232)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(35)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P>Other</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">(273)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(4)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">(1,456)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(7)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" 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">(2,097)</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">(4)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">(6,119)</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" HEIGHT=17>
<FONT SIZE=2><P>Interest Expenses</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,331)</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(44)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">(5,281)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(34)%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" 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">$ 234</B></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>
<B><FONT SIZE=2><P ALIGN="RIGHT">$ (838)</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" 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" 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" 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">$2,254</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">$2,028</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" 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">750</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">20%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">2,255</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" 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">(159)</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">(6)%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">281</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">4%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" 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">193</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">24%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">231</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">9%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P>Other operating expenses</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">3,571</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">82%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=2><P ALIGN="RIGHT">5,778</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=2><P ALIGN="RIGHT">50%</FONT></TD>
</TR>
<TR><TD WIDTH="40%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P>Total Operating Expenses</B></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">$6,609</B></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">17%</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=18>
<B><FONT SIZE=2><P ALIGN="RIGHT">$10,573</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">9%</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><I><P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">Nine months ended September 2001 as compared to nine months ended September 2000</P>
</B></I><P ALIGN="JUSTIFY">The Company recorded net earnings of $840,000 or $0.10 per diluted share on total revenues of $142.7 million for the nine months ended September 30, 2001 compared to net earnings of $8.1 million or $1.06 per diluted share on total revenues of $148.9 million for the same period one year earlier.</P>
<P ALIGN="JUSTIFY">Total revenues decreased $6.1 million (4%) resulting from decreases in commissions, interest revenues and other revenues which decreased $10.1 million (15%), $9.2 million (35%), and $1.5 million (7%) respectively, offset by an increase in principal transactions and investment banking of $173,000 (1%), and $14.5 million (117%).</P>
<P ALIGN="JUSTIFY">Revenues from commissions on sales of over-the-counter, insurance and mutual funds decreased principally due to declining markets conditions referred to above.</P>
<P ALIGN="JUSTIFY">Interest revenues declined principally as a result of decreased average borrowings by customers. </P>
<P ALIGN="JUSTIFY">Other revenues decreased $1.5 million principally due to current year write downs of the Company's investment portfolio of approximately $1.6 million, decreases in investment advisory fees of $360,000 resulting from decreased customer portfolio valuations, and a decrease of other income of $530,000 resulting primarily from life insurance proceeds of $220,000 and litigation proceeds of $250,000 received in the first nine months of 2000. These decreases were offset by an approximate $1.3 million increase<B><I> </B></I>in money market account fees.<B><I> </P>
</B></I><P ALIGN="JUSTIFY">Investment banking revenues increased principally due to an increase in corporate finance revenue of $7.8 million (115%) and an increase in municipal finance revenue of $5.6 million (137%). The Company lead managed fourteen equity offerings, principally for financial institutions, and completed two private placements during the first nine months of 2001 combined with increased advisory fee income. Municipal Finance revenue increased as a result of improved bond market activity concurrent with the addition of a new public finance office opened in Brookfield, Wisconsin, in mid-year 2000.</P>
<P ALIGN="JUSTIFY">Despite the poor market conditions mentioned above, the Company continued its expansion of its Private Client Group which contributed to the increases in all operating expense categories except interest. Total expenses increased $5.3 million (4%) for the first nine months of 2001 compared to the same period one year earlier. Since September 30, 2000, the Company opened 10 Private Client branch offices, and recruited 127 investment executives and 23 independent contractors resulting in a 8% net increase in Private Client branch offices, and a 9% net increase in investment executives and independent contractors compared to the same period one year earlier. </P>
<P ALIGN="JUSTIFY">Employee compensation and benefits, a significant portion of the Company's total expense, increased $2.0 million (2%) resulting from increases in fixed salaries, employee benefits and incentive based compensation. Fixed salaries and employee benefits increased $2.3 million (11%), and $573,000 (24%), respectively, as a result of the company's expansion efforts and an increase in the cost of health care coverage. Investment executive compensation, a major variable component of employee compensation decreased $1.2 million (2%) resulting from a decrease in compensation for production of $3.8 million (9%) due to poor market conditions referred to above offset by an increase in transition amounts paid of $2.2 million (55%) in connection with the company's expansion. </P>
<P ALIGN="JUSTIFY">Interest expense decreased $5.3 million (34%) due to decreased borrowings by the Company to finance customer margin. </P>
<P ALIGN="JUSTIFY">Other operating expenses increased $5.8 million (50%) over the prior year first nine months due to the Company's expansion activities and approximately $1.3 million in legal related expenses incurred in the second quarter of 2001 and $3.4 million in the third quarter of 2001 (see Note F) primarily in connection with historical litigation arising out of the Company's former Oklahoma operations.</P>
<B><I><FONT FACE="Tms Rmn,Times New Roman"><P ALIGN="JUSTIFY">Three months ended September 2001 as compared to three months ended September 2000</P>
</B></I></FONT><P ALIGN="JUSTIFY">The Company recorded a net loss of<B><I> </B></I>$1.5 million or $0.21 per share on total revenues of $46.6 million for the third quarter ended September 30, 2001 compared to net earnings of $2.3 million or $0.30 per diluted share on total revenues of $48.7 million for the same period one year earlier. </P>
<P ALIGN="JUSTIFY">The explanation of revenue and expense fluctuations for all the categories presented for the nine 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 nine months of 2001, the Company repurchased 66,732 shares, using existing board authorizations, at an average price of $11.07 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 September 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 September 30, 2001, Stifel, Nicolaus had net capital of approximately $36.8 million which exceeded the minimum net capital requirements by approximately $30.4 million.</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 transfers 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 nine-month periods ended September 30, 2001 were approximately $23,000 and $146,000, 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><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>PART II. OTHER INFORMATION</P>
</FONT><U><P><A NAME="Item1">Item 1. Legal Proceedings</P>
</B></U><P ALIGN="JUSTIFY"></A>On November 1, 2001, the District Court of Oklahoma County in the State of Oklahoma issued a decision in the "State of Oklahoma, ex rel. Gary Piper; and Gary Piper, for himself and for all other taxpayers of the City of Oklahoma City v. Robert M. Cochran; Stifel, Nicolaus &amp; Company, Incorporated; Dillon, Read &amp; Co Inc.; Leo Oppenheim &amp; Co. Inc.; A. G. Edwards &amp; Sons, Inc.; and The City of Oklahoma City", filed by an individual taxpayer pursuant to the State of Oklahoma Qui Tam statutes, which found that the Company breached its underwriting agreement and duty owed to the city of Oklahoma City, Oklahoma in a 1993 refunding bond issue in connection with receipt of a markup on government securities sold to the City to establish the refunding escrow. Treble damages, as required by Oklahoma's statutes, were awarded the plaintiff. </P>
<P ALIGN="JUSTIFY">A similar case is pending in the District Court of Oklahoma County in the State of Oklahoma, "State of Oklahoma, ex rel. Gary Piper; and Gary Piper, for himself and for all other taxpayers of Oklahoma City v. Stifel, Nicolaus &amp; Company, Incorporated; Robert M. Cochran; Chris Cochran; Bayerische Landesbank Girozentrale, a foreign banking institution; Boatmen's First National Bank of Oklahoma; and Oklahoma Water Resources Board, an agency of the State of Oklahoma." No trial date has been set. </P>
<P ALIGN="JUSTIFY">The Company has included in the results of operations, for the period ending September 30, 2001, a pretax charge of approximately $3.4 million or $0.26 per diluted share for these Oklahoma matters in excess of amounts previously provided.</P>
<P ALIGN="JUSTIFY">There have been no other 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>
<B><U><P ALIGN="JUSTIFY"><A NAME="Item6"></P>
<P ALIGN="JUSTIFY">Item 6. Exhibit(s) and Report(s) on Form 8-K</P>
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI></A></B></U>Exhibits: None.</LI></P>
<P ALIGN="JUSTIFY"><LI>Report(s) on Form 8-K</LI></P></OL>
<DIR>

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

<B><U><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER"><A NAME="Signatures"></A>SIGNATURES</P>
</B></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">&nbsp;</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="CENTER">STIFEL FINANCIAL CORP.</P>
<P ALIGN="CENTER">(Registrant)</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Date: November 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)</TD>
</TR>
<TR><TD WIDTH="50%" VALIGN="TOP">
<P ALIGN="JUSTIFY">Date: November 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)</TD>
</TR>
</TABLE>

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