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</b>
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<td nowrap="nowrap" align="left"><b>Note 1</b></td>
<td> </td>
<td><i>Background</i></td>
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</table>
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<div align="justify" style="font-size: 10pt; margin-top: 6pt">Piper Jaffray Companies is the parent company of Piper Jaffray & Co. (“Piper Jaffray”), a
securities broker dealer and investment banking firm; Piper Jaffray Asia Holdings Limited, an
entity providing investment banking services in China headquartered in Hong Kong; Piper Jaffray
Ltd., a firm providing securities brokerage and investment banking services in Europe headquartered
in London, England; Advisory Research Holdings, Inc. (“ARI”) and Fiduciary Asset Management, LLC
(“FAMCO”), entities providing asset management services to separately managed accounts, closed end
funds and partnerships; Piper Jaffray Financial Products Inc., Piper Jaffray Financial Products II
Inc. and Piper Jaffray Financial Products III Inc., entities that facilitate derivative
transactions; and other immaterial subsidiaries. Piper Jaffray Companies and its subsidiaries
(collectively, the “Company”) operate in two reporting segments: Capital Markets and Asset
Management. A summary of the activities of each of the Company’s business segments is as follows:
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Capital Markets</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Capital Markets segment provides institutional sales, trading and research services and
investment banking services. Institutional sales, trading and research services focus on the
trading of equities and fixed income products with institutions, government, and non-profit
entities. Revenues are generated through commissions and sales credits earned on equity and fixed
income institutional sales activities, net interest revenues on trading securities held in
inventory, profits and losses from trading these securities and strategic trading opportunities.
Investment banking services include management of and participation in underwritings, merger and
acquisition services and public finance activities. Revenues are generated through the receipt of
advisory and financing fees.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Asset Management</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Asset Management segment provides asset management services and products in equity and fixed
income securities to institutional and high net worth individuals through proprietary distribution
channels. Revenues are generated in the form of management fees and performance fees. The majority
of the Company’s performance fees, if earned, are recognized in the fourth quarter.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Basis of Presentation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly
owned subsidiaries and other entities in which the Company has a controlling financial interest.
All material intercompany balances have been eliminated. Certain financial information for prior
periods has been reclassified to conform to the current period presentation.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (“SEC”) with respect to Form 10-Q and reflect
all adjustments that in the opinion of management are normal and recurring and that are necessary
for a fair statement of the results for the interim periods presented. In accordance with these
rules and regulations, certain disclosures that are normally included in annual financial
statements have been omitted. The consolidated financial statements included in this Form 10-Q
should be read in conjunction with the consolidated financial statements and notes thereto included
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements are prepared in conformity with U.S. generally accepted
accounting principles. These principles require management to make certain estimates and
assumptions that may affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The nature of the Company’s
business is such that the results of any interim period may not be indicative of the results to be
expected for a full year.
</div>
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<td nowrap="nowrap" align="left"><b>Note 2</b></td>
<td> </td>
<td><i>Summary of Significant Accounting Policies</i></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, for a full
description of the Company’s significant accounting policies. Changes to the Company’s significant
accounting policies are described below.
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Principles of Consolidation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly
owned subsidiaries, and all other entities in which the Company has a controlling financial
interest. All material intercompany balances have been eliminated. The Company determines whether
it has a controlling financial interest in an entity by first evaluating whether the entity is a
voting interest entity or a variable interest entity (“VIE”).
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Voting interest entities are entities in which the total equity investment at risk is sufficient to
enable each entity to finance itself independently and provides the equity holders with the
obligation to absorb losses, the right to receive residual returns and the right or power to make
decisions about or direct the entity’s activities that most significantly impact the entity’s
economic performance. Voting interest entities, where we have a majority interest, are consolidated
in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
Topic 810, “Consolidations” (“ASC 810”). ASC 810 states that the usual condition for a controlling
financial interest in an entity is ownership of a majority voting interest. Accordingly, the
Company consolidates voting interest entities in which it has all, or a majority of, the voting
interest.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">As defined in ASC 810, VIEs are entities that lack one or more of the characteristics of a voting
interest entity described above. With the exception of entities eligible for the deferral codified
in FASB Accounting Standards Update (“ASU”) No. 2010-10, “Consolidation: Amendments for Certain
Investment Funds,” (“ASU 2010-10”) (generally asset managers and investment companies), ASC 810
states that a controlling financial interest in an entity is present when an enterprise has a
variable interest, or combination of variable interests, that have both the power to direct the
activities of the entity that most significantly impact the entity’s economic performance and the
obligation to absorb losses of the entity or the rights to receive benefits from the entity that
could potentially be significant to the entity. Accordingly, the Company consolidates VIEs in which
the Company has a controlling financial interest. For more on ASC 810 and VIEs, please see
“Consolidation of Variable Interest Entities” under Adoption of New Accounting Standards in Note 3
below.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Entities meeting the deferral provision defined by ASU 2010-10 (generally asset managers and
investment companies) are evaluated under the historical VIE guidance. Under the historical
guidance, a controlling financial interest in an entity is present when an enterprise has a
variable interest, or combination of variable interests, that will absorb a majority of the
entity’s expected losses, receive a majority of the entity’s expected residual returns, or both.
The enterprise with a controlling financial interest, known as the primary beneficiary,
consolidates the VIE. Accordingly, the Company consolidates VIEs subject to the deferral provisions
defined by ASU 2010-10 in which the Company is deemed to be the primary beneficiary.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">When the Company does not have a controlling financial interest in an entity but exerts significant
influence over the entity’s operating and financial policies (generally defined as owning a voting
or economic interest of between 20 percent to 50 percent), the Company accounts for its investment
in accordance with the equity method of accounting prescribed by FASB Accounting Standards
Codification Topic 323, “Investments — Equity Method and Joint Ventures” (“ASC 323”). If the
Company does not have a controlling financial interest in, or exert significant influence over, an
entity, the Company accounts for its investment at cost.
</div>
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<td nowrap="nowrap" align="left"><b>Note 3</b></td>
<td> </td>
<td><i>Recent Accounting Pronouncements</i></td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Adoption of New Accounting Standards</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Accounting for Transfers of Financial Assets</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB issued guidance amending the Accounting Standards Codification Topic 860,
“Transfers and Servicing,” (“ASC 860”) designed to improve the relevance, representational
faithfulness, and comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a transfer on its
financial position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. Additionally, the new guidance eliminates the
qualifying special-purpose entity (“QSPE”) concept. The updates were effective for the Company
January 1, 2010. The recognition and measurement provisions were effective for prospective
transfers with the exception of existing QSPEs which must be evaluated at the time of adoption. The
disclosures required by ASC 860 are applied to both retrospective and prospective transfers. The
adoption of ASC 860 did not have an impact on the Company’s consolidated financial statements.
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Consolidation of Variable Interest Entities</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In June 2009, the FASB updated the accounting standard related to the consolidation of variable
interest entities (“VIE”). The standard requires, among other things, a qualitative rather than
quantitative analysis to determine the primary beneficiary (“PB”) of the VIE, continuous
assessments of whether the entity is the PB of the VIE, and enhanced disclosures about involvement
with VIEs. This standard was effective for the Company January 1, 2010 and is applicable to all
entities with which the enterprise has involvement, regardless of when that involvement arose. The
adoption of the new standard did not have an impact on the Company’s consolidated financial
statements.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In February 2010, the FASB issued ASU 2010-10, which addresses the application of the amendments to
VIE consolidation described above by reporting entities in the asset management industry by
deferring the effective date of the standard’s new recognition and measurement requirements for
certain investment funds. However, the standard’s new disclosure requirements will continue to
apply to all entities. ASU 2010-10 was effective for the Company January 1, 2010. The adoption of
this standard led to the deferral of the application of the updated consolidation guidance in ASC
810 to certain of the Company’s investment funds within the scope of ASU 2010-10.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Fair Value Measurements</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value
Measurements,” (“ASU 2010-06”) amending FASB Accounting Standards Codification Topic 820, “Fair
Value Measurements and Disclosures” (“ASC 820”). The amended guidance requires entities to disclose
additional information regarding assets and liabilities that are transferred between levels of the
fair value hierarchy and to disclose information in the Level III rollforward about purchases,
sales, issuances and settlements on a gross basis. ASU 2010-06 also further clarifies existing
guidance pertaining to the level of disaggregation at which fair value disclosures should be made
and the requirements to disclose information about the valuation techniques and inputs used in
estimating Level II and Level III fair value measurements. The guidance in ASU 2010-06 was
effective for the Company January 1, 2010, except for the requirement to separately disclose
purchases, sales, issuances, and settlements on a gross basis in the Level III rollforward, which
becomes effective for fiscal years (and for interim periods within those fiscal years) beginning
after December 15, 2010. While the adoption of ASU 2010-06 did not change accounting requirements,
it did impact the Company’s disclosures about fair value measurements.
</div>
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<td nowrap="nowrap" align="left"><b>Note 4</b></td>
<td> </td>
<td><i>Acquisition of Advisory Research Holdings, Inc.</i></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">On March 1, 2010, the Company completed the purchase of Advisory Research Holdings, Inc. (“ARI”),
an asset management firm based in Chicago, Illinois. The purchase was completed pursuant to the
securities purchase agreement dated December 20, 2009. The fair value as of the acquisition date
was $212.1 million, consisting of $180.3 million in cash and 893,105 shares (881,846 of which vest
in four equal installments over the next four years) of the Company’s common stock valued at $31.8 million. The fair value of
the 881,846 shares of common stock with vesting restrictions was determined using the market price
of the Company’s common stock on the date of the acquisition discounted for the liquidity
restrictions in accordance with the valuation principles of ASC 820. The vesting provisions of these 881,846 shares are principally time-based, but also include certain post-termination restrictions. The remaining 11,259 shares
have no vesting restrictions and the fair value was determined using the market price of the
Company’s common stock on the date of the acquisition. A portion of the purchase price payable in
cash was funded by proceeds from the issuance of variable rate senior notes (“Notes”) in the amount
of $120 million pursuant to the note purchase agreement (“Note Purchase Agreement”) dated December
31, 2009 with certain entities advised by Pacific Investment Management Company LLC (“PIMCO”).
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The acquisition was accounted for under the acquisition method of accounting in accordance with ASC
805, “Business Combinations.” Accordingly, goodwill was measured as the excess of the
acquisition-date fair value of the consideration transferred over the amount of acquisition-date
identifiable assets acquired net of assumed liabilities. The Company recorded $152.3 million of
goodwill as an asset in the consolidated statement of financial condition, which is expected to be
deductible for tax purposes and has been allocated to the Company’s Asset Management segment. In
management’s opinion, the goodwill represents the reputation and expertise of ARI in the asset
management business.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Identifiable intangible assets purchased by the Company consisted of customer relationships and the
ARI trade name with acquisition-date fair values of $52.2 million and $2.9 million, respectively.
Acquisition costs of $1.5 million were incurred in the fourth quarter of 2009 and $96,000 of
acquisition costs were incurred in the nine months ended September 30, 2010, and are included in
outside services on the consolidated statement of operations.
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the fair value of assets acquired and liabilities assumed at the
date of the acquisition:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="83%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><i>(Dollars in thousands)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
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<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash and cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,008</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other receivables
</div></td>
<td> </td>
<td> </td>
<td align="right">8,861</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Fixed assets
</div></td>
<td> </td>
<td> </td>
<td align="right">377</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td> </td>
<td align="right">152,282</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">55,059</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">369</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets acquired
</div></td>
<td> </td>
<td> </td>
<td align="right">218,956</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Accrued compensation
</div></td>
<td> </td>
<td> </td>
<td align="right">149</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other liabilities and accrued expenses
</div></td>
<td> </td>
<td> </td>
<td align="right">6,726</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities assumed
</div></td>
<td> </td>
<td> </td>
<td align="right">6,875</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">212,081</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">ARI’s results of operations have been included in the consolidated Company’s financial statements
prospectively beginning on the date of acquisition. Since the date of acquisition, ARI had net
revenues of $28.3 million and net income of $6.3 million. The following unaudited pro forma
financial data assumes the acquisition had occurred at the beginning of each period presented. Pro
forma results have been prepared by adjusting the consolidated Company’s historical results to
include ARI’s results of operations adjusted for the following changes: depreciation and
amortization expenses were adjusted as a result of acquisition-date fair value adjustments to fixed
assets, intangible assets, deferred acquisition costs and lease obligations; interest expense was
adjusted for revised debt structures; and the income tax effect of applying the Company’s statutory
tax rates to ARI’s results. The consolidated Company’s unaudited pro forma information presented
does not necessarily reflect the results of operations that would have resulted had the acquisition
been completed at the beginning of the applicable periods presented, nor does it indicate the
results of operations in future periods.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="55%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="8%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="8%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="8%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Three Months</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Ended September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Nine Months Ended September 30,</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">129,123</td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>361,748</b></td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">361,747</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="right">$
</td>
<td align="right">10,880</td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>16,689</b></td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21,889</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:TradingSecuritiesAndCertainTradingAssetsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="margin-top: 12pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><b>Note 5</b></td>
<td> </td>
<td>
<div align="justify"><i>Financial Instruments and Other Inventory Positions Owned and Financial Instruments and
Other Inventory Positions Sold, but Not Yet Purchased</i>
</div></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Financial instruments and other inventory positions owned and financial instruments and other
inventory positions sold, but not yet purchased were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory positions owned:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="left"><b>  $</b></td>
<td align="right"><b>31,502</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">3,070</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>57,268</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,295</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>132,009</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,825</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Taxable securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>232,133</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,144</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Tax-exempt securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>142,983</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">147,809</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>66,500</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,204</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>68,272</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,425</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>165,104</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,576</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>5,567</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,111</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative contracts
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>38,007</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,530</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"><b>  $</b></td>
<td align="right"><b>939,345</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">799,989</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory positions sold,
but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="left"><b>  $</b></td>
<td align="right"><b>30,692</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">26,474</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>5,748</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,678</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>29,287</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122,339</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>13,899</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,937</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>62,970</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,001</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>248,723</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102,911</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Derivative contracts
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>9,459</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,455</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"><b>  $</b></td>
<td align="right"><b>400,778</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">335,795</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">At September 30, 2010, and December 31, 2009, financial instruments and other inventory positions
owned in the amount of $415.5 million and $137.4 million, respectively, had been pledged as
collateral for the Company’s repurchase agreements, secured borrowings and securities loaned.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Inventory positions sold, but not yet purchased represent obligations of the Company to deliver the
specified security at the contracted price, thereby creating a liability to purchase the security
in the market at prevailing prices. The Company is obligated to acquire the securities sold short
at prevailing market prices, which may exceed the amount reflected on the consolidated statements
of financial condition. The Company economically hedges changes in market value of its financial
instruments and other inventory positions owned utilizing inventory positions sold, but not yet
purchased, interest rate derivatives, credit default swap index contracts, futures and
exchange-traded options.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Derivative Contract Financial Instruments</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company uses interest rate swaps, interest rate locks, credit default swap index contracts and
foreign currency forward contracts to facilitate customer transactions and as a means to manage
risk in certain inventory positions and firm investments. The following describes the Company’s
derivatives by the type of transaction or security the instruments are economically hedging.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Customer matched-book derivatives: </i>The Company enters into interest rate derivative contracts in a
principal capacity as a dealer to satisfy the financial needs of its customers. The Company
simultaneously enters into an interest rate derivative contract with a third party for the same
notional amount to hedge the interest rate and credit risk of the initial client interest rate
derivative contract. In certain limited instances, the Company has only hedged interest rate risk
with a third party, and retains uncollateralized credit risk as described below. The instruments
use interest rates based upon either the London Interbank Offer Rate (“LIBOR”) index or the
Securities Industry and Financial Markets Association (“SIFMA”) index.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Trading securities derivatives: </i>The Company enters into interest rate derivative contracts to hedge
interest rate and market value risks associated with its fixed income securities. The instruments
use interest rates based upon either the Municipal Market Data (“MMD”) index or the SIFMA index.
The Company also enters into credit default swap index contracts to hedge credit risk associated
with its taxable fixed income securities.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Firm Investments: </i>The Company enters into foreign currency forward contracts to manage the currency
exposure related to its non-U.S. dollar denominated firm investments.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table presents the total absolute notional contract amount associated with the
Company’s outstanding derivative instruments:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="24%"> </td>
<td width="5%" nowrap="nowrap">           </td>
<td width="3%"> </td>
<td width="21%"> </td>
<td width="30%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">
<div style="margin-left:25px; text-indent:-15px"><i>(Dollars in thousands)</i>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">
<div style="margin-left:25px; text-indent:-15px"><b>Transaction Type or Hedged Security</b>
</div></td>
<td> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="left" colspan="1" style="border-bottom: 1px solid #000000"><b>Derivative Category</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px">Customer matched-book
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top">Interest rate derivative contract</td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>6,470,899</b>  </td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">6,795,186  </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:25px; text-indent:-15px">Trading securities
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top">Interest rate derivative contract</td>
<td> </td>
<td> </td>
<td align="right"><b>202,250</b>  </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">234,500  </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px">Trading securities
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top" nowrap="nowrap">Credit default swap index contract</td>
<td> </td>
<td> </td>
<td align="right"><b>140,000</b>  </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:25px; text-indent:-15px">Firm investments
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top">Foreign currency forward contract</td>
<td> </td>
<td> </td>
<td align="right"><b>4,891</b>  </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>6,818,040</b>  </td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">7,029,686  </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s interest rate derivative contracts, credit default swap index contracts and foreign
currency forward contracts do not qualify for hedge accounting, therefore, unrealized gains and
losses are recorded on the consolidated statements of operations. The following table presents the
Company’s unrealized gains/(losses) on derivative instruments:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="30%"> </td>
<td width="11%"> </td>
<td width="23%"> </td>
<td width="10%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="3%"> </td>
<td width="2%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">
<div style="margin-left:25px; text-indent:-15px"><i>(Dollars in thousands)</i>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Nine Months Ended</b></td>
<td> </td>
</tr>
<tr>
<td style="font-size:3pt"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">
<div style="margin-left:25px; text-indent:-15px"><b>Derivative Category</b>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">
<div style="margin-left:25px; text-indent:-15px"><b>Operations Category</b>
</div></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">  <b>Sept. 30, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">  Sept. 30, 2009</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">  <b>Sept. 30, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">  Sept. 30, 2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px">Interest rate derivative contract
</div></td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:25px; text-indent:-15px">Investment banking
</div></td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>6,434</b>   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">  $</td>
<td align="right">(668)  </td>
<td nowrap="nowrap"></td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>3,566</b>  </td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">5,305   </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:25px; text-indent:-15px">Interest rate derivative contract
</div></td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:25px; text-indent:-15px">Institutional brokerage
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,299)</b>   </td>
<td nowrap="nowrap"><b></b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,606)  </td> <td nowrap="nowrap"></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,485) </b></td>
<td nowrap="nowrap"><b></b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(997)  </td>
<td nowrap="nowrap"></td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px">Credit default swap index contract
</div></td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:25px; text-indent:-15px">Institutional brokerage
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,492)  </b></td>
<td nowrap="nowrap"><b></b></td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(419)</b> </td>
<td nowrap="nowrap"><b></b></td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:25px; text-indent:-15px">Foreign currency forward contract
</div></td>
<td> </td>
<td align="left" valign="top">
<div style="margin-left:25px; text-indent:-15px">Other operating expenses
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(502)</b>  </td>
<td nowrap="nowrap"><b></b></td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>12</b>   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-     </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>141</b>   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">  $</td>
<td align="right">(7,274)  </td>
<td nowrap="nowrap"></td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>674</b>   </td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">4,308   </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The gross fair market value of all derivative instruments and their location on the Company’s
consolidated statements of financial condition prior to counterparty and cash collateral netting
are shown below by asset or liability position <i>(1)</i>:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="18%"> </td>
<td width="2%"> </td>
<td width="28%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="2%"> </td>
<td width="40%"> </td>
<td width="2%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left">
<div style="margin-left:25px; text-indent:-15px"><i>(Dollars in thousands)</i>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Asset Value at</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Liability Value at</b></td>
<td> </td>
</tr>
<tr>
<td style="font-size:3pt"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">
<div style="margin-left:25px; text-indent:-15px"><b>Derivative Category</b>
</div></td>
<td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Financial Condition Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Sept. 30, 2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Financial Condition Location</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Sept. 30, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="top" style="background: #cceeff">
<td nowrap="nowrap">
<div style="margin-left:25px; text-indent:-15px">Interest rate derivative contract
</div></td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory positions owned</td>
<td> </td>
<td align="left" valign="top">  $</td>
<td align="right" valign="top">576,711  </td>
<td> </td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory <br />
positions sold, but not yet purchased</td>
<td> </td>
<td align="left" valign="top">  $</td>
<td align="right" valign="top">540,532  </td>
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap">
<div style="margin-left:25px; text-indent:-15px">Credit default swap index contract
</div></td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory positions owned</td>
<td> </td>
<td> </td>
<td align="right" valign="top">402  </td>
<td> </td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory <br />
positions sold, but not yet purchased</td>
<td> </td>
<td> </td>
<td align="right" valign="top">225  </td>
<td> </td>
</tr>
<tr valign="top" style="background: #cceeff">
<td nowrap="nowrap">
<div style="margin-left:25px; text-indent:-15px">Foreign currency forward contract
</div></td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory positions owned</td>
<td> </td>
<td> </td>
<td align="right" valign="top">-     </td>
<td> </td>
<td> </td>
<td align="center" valign="top">Financial intruments and other inventory <br />
positions sold, but not yet purchased</td>
<td> </td>
<td> </td>
<td align="right" valign="top">399  </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td align="left" valign="top">  $</td>
<td align="right" valign="top">577,113  </td>
<td> </td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td align="left" valign="top">  $</td>
<td align="right" valign="top">541,156  </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:25px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td align="center" valign="top"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="1%"></td>
<td width="1%"></td>
<td width="98"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(1)</i></td>
<td> </td>
<td><i>Amounts are disclosed at gross fair value in accordance with the requirement of ASC 815.</i></td>
</tr>
</table>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Depending upon the product and terms of the transaction, the fair value of the Company’s
derivative contracts can be observed or priced using models based on the net present value of
estimated future cash flows. The inputs for the valuation models include contractual terms, market
prices, yield curves, credit curves and measures of volatility. Derivatives are reported on a net
basis by counterparty when legal right of offset exists and when applicable provisions are stated
in master netting agreements. Cash collateral received or paid is netted on a counterparty basis,
provided a legal right of offset exists.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty
will not perform in accordance with the terms of the applicable derivative contract. Credit
exposure associated with the Company’s derivatives is driven by uncollateralized market movements
in the fair value of the contracts with counterparties and is monitored regularly by the Company’s
financial risk committee. The Company reflects counterparty credit risk in calculating derivative
contract fair value. The majority of the Company’s derivative contracts are substantially
collateralized by its counterparties, who are major financial institutions. The Company has a
limited number of counterparties who are not required to post collateral. Based on market
movements, the uncollateralized amounts representing the fair value of the derivative contract can
become material, exposing the Company to the credit risk of these counterparties. As of September
30, 2010, the Company had $31.4 million of uncollateralized credit exposure with these
counterparties (notional contract amount of $268.6 million), including $17.5 million of
uncollateralized credit exposure with one counterparty.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="margin-top: 12pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><b>Note 6</b></td>
<td> </td>
<td><i>Fair Value of Financial Instruments</i></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company records financial instruments and other inventory positions owned and financial
instruments and other inventory positions sold, but not yet purchased at fair value on the
consolidated statements of financial condition with unrealized gains and losses reflected in the
consolidated statements of operations.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The degree of judgment used in measuring the fair value of financial instruments generally
correlates to the level of pricing observability. Pricing observability is impacted by a number of
factors, including the type of financial instrument, whether the financial instrument is new to the
market and not yet established and other characteristics specific to the instrument. Financial
instruments with readily available active quoted prices for which fair value can be measured
generally will have a higher degree of pricing observability and a lesser degree of judgment used
in measuring fair value. Conversely, financial instruments rarely traded or not quoted will
generally have less, or no, pricing observability and a higher degree of judgment used in measuring
fair value.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following is a description of the valuation techniques used to measure fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Cash Equivalents</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Cash equivalents include highly liquid investments with original maturities of 90 days or less.
Actively traded money market funds are measured at their net asset value and classified as Level I.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Financial Instruments and Other Inventory Positions Owned</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Equity securities — </i>Exchange traded equity securities are valued based on quoted prices from the
exchange for identical assets or liabilities as of the period-end date. To the extent these
securities are actively traded and valuation adjustments are not applied, they are categorized as
Level I. Non-exchange traded equity securities are measured primarily using broker quotations,
pricing service data from external providers and prices observed for recently executed market
transactions and are categorized within Level II of the fair value hierarchy. Where such
information is not available, non-exchange traded equity securities are categorized as Level III
financial instruments and measured using valuation techniques involving quoted prices of or market
data for comparable companies. When using pricing data of comparable companies, judgment must be
applied to adjust the pricing data to account for differences between the measured security and the
comparable security (e.g., issuer market capitalization, yield, dividend rate and geographical
concentration).
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Convertible securities — </i>Convertible securities are valued based on observable trades, when
available. Accordingly, these convertible securities are categorized as Level II. When observable
price quotations are not available, fair value is determined based upon model-based valuation
techniques with observable market inputs, such as specific company stock price and volatility and
unobservable inputs such as option adjusted spreads. These instruments are categorized as Level
III.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Corporate fixed income securities — </i>Fixed income securities include corporate bonds which are
valued based on recently executed market transactions of comparable size, pricing service data from
external providers when available, or broker quotations. Accordingly, these corporate bonds are
categorized as Level II. When observable price quotations are not available, fair value is
determined using model-based valuation techniques with observable inputs such as specific security
contractual terms and yield curves and unobservable inputs such as credit spreads. Corporate bonds
measured using model-based valuation techniques are categorized as Level III and comprise a limited
portion of our corporate bonds.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Taxable municipal securities — </i>Taxable municipal securities are valued using recently executed
observable trades or market price quotations and therefore are generally categorized as Level II.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Tax-exempt municipal securities — </i>Tax-exempt municipal securities are valued using recently
executed observable trades or market price quotations and therefore are generally categorized as
Level II. Certain illiquid tax-exempt municipal securities are categorized as Level III.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Short-term municipal securities — </i>Short-term municipal securities include auction rate securities,
variable rate demand notes, and other short-term municipal securities. Auction rate securities were
historically traded and valued as floating rate notes, priced at par due to the auction mechanism.
Beginning in 2008, the auction rate securities market experienced dislocation due to uncertainties
in the credit markets. During 2009, certain areas of the auction rate market began to function;
however, lower credit issuers remain illiquid. Accordingly, auction rate securities with limited
liquidity were valued based upon internal models with observable inputs such as specific security
contractual terms and yield curves and unobservable inputs such as liquidity discounts. These
instruments were categorized as Level III. Variable rate demand notes and other short-term
municipal securities are valued using recently executed observable trades or market price
quotations and therefore are generally categorized as Level II.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Asset-backed securities — </i>Asset-backed securities are valued using observable trades, when
available. Certain asset-backed securities are valued using models where inputs to the model are
directly observable in the market, or can be derived principally from or corroborated by observable
market data. These asset-backed securities are categorized as Level II. Other asset-backed
securities, which are principally collateralized by aircraft and have experienced low volumes of
executed transactions, result in less observable transaction data. These assets are valued using
cash flow models that utilize unobservable inputs including airplane lease rates, aircraft
valuation, trust costs, and other factors impacting security cash flows. The Company’s aircraft
asset-backed securities had a weighted average yield of 6.2% at September 30, 2010. The Company
also has a minimal amount of asset-backed securities collateralized by residential mortgages. These
are valued using cash flow models that utilize unobservable inputs including credit default rates
ranging from 3-10%, prepayment rates ranging from 4-8% of CPR, severity ranging from 50-80% and
valuation yields ranging from 6-9%. As judgment is used to determine the range of these inputs,
these asset-backed securities are categorized as Level III.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>U.S. government agency securities — </i>U.S. government agency securities include agency debt bonds
and mortgage bonds. Agency debt bonds are valued by using either direct price quotes or price
quotes for comparable bond securities and thus, are categorized as Level II. Mortgage bonds include
mortgage bonds, mortgage pass-through securities and agency collateralized mortgage-obligations
(“CMO”). Mortgage pass-through securities and CMO securities are valued using recently executed
observable trades or other observable inputs, such as prepayment speeds and therefore, generally
are categorized as Level II. Mortgage bonds are valued using observable market inputs, such as
market yields ranging from 95-165 basis point spreads to treasury securities, or models based upon
prepayment expectations ranging from 222-454 Public Securities Association (“PSA”) prepayment
levels. These securities are categorized as Level II.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>U.S. government securities — </i>U.S. government securities include highly liquid U.S. treasury
securities which are generally valued using quoted market prices and therefore categorized as Level
I.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Derivatives — </i>Derivative contracts include interest rate swaps, interest rate locks, credit
default swap index contracts and foreign currency forward contracts. These instruments derive their
value from underlying assets, reference rates, indices or a combination of these factors. The
majority of the Company’s interest rate derivative contracts, including both interest rate swaps
and interest rate locks, are valued using market standard pricing models based on the net present
value of estimated future cash flows. The valuation models used do not involve material
subjectivity as the methodologies do not entail significant judgment and the pricing inputs are
market observable, including contractual terms, yield curves and measures of volatility. These
instruments are classified as Level II within the fair value hierarchy. The Company’s credit
default swap index contracts and foreign currency forward contracts are valued using market price
quotations and classified as Level II.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Investments</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s investments valued at fair value include investments in public companies, warrants of
public or private companies and investments in certain illiquid municipal bonds. Exchange traded
direct equity investments in public companies are valued based on quoted prices on active markets
and reported in Level I. Company-owned warrants, which have a cashless exercise option, are valued
based upon the Black-Scholes option-pricing model that uses discount rates and stock volatility
factors of comparable companies as inputs. These inputs are subject to management judgment to
account for differences between the measured investment and comparable companies. Company-owned
warrants are reported as Level III assets. Investments in certain illiquid municipal bonds
that the Company is holding for investment are measured using valuation techniques involving
significant management judgment and are reported as Level III assets.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the valuation of our financial instruments by pricing observability
levels defined in ASC 820 as of September 30, 2010:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Counterparty</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Collateral</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i>(Dollars in thousands)</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level I</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level II</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level III</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Netting (1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">10,622</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">18,600</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">2,280</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">31,502</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47,379</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,889</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,268</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">127,834</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132,009</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Taxable securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">232,133</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">232,133</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Tax-exempt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">139,630</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,353</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">142,983</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66,225</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">275</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">66,500</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41,951</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,321</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,272</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165,104</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">165,104</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5,567</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,567</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative instruments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,606</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,599</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">38,007</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other
inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td align="right">16,189</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">914,462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,293</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,599</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">939,345</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">10,652</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,652</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right">2,582</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,147</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,729</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">29,423</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">914,462</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">49,440</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">(37,599</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">955,726</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">30,692</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">30,692</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,748</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,748</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,207</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,080</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,287</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,759</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,140</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,899</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,970</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,970</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">248,723</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">248,723</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative instruments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39,649</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(30,190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">9,459</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other
inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td align="right">279,415</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">146,333</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,220</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(30,190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">400,778</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities
</div></td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">279,415</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">146,333</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">5,221</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">(30,190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">400,779</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(1)</i></td>
<td> </td>
<td>
<div align="justify"><i>Represents cash collateral and the impact of netting on a counterparty basis. The Company
had no securities posted as collateral to its counterparties.</i>
</div></td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the valuation of our financial instruments by pricing
observability levels defined in ASC 820 as of December 31, 2009:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Counterparty</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Collateral</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i>(Dollars in thousands)</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level I</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level II</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level III</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Netting (1)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="right">   $ </td>
<td align="right">3,070</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">3,070</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,295</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,295</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,825</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,825</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Taxable securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,144</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,144</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Tax-exempt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">147,809</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">147,809</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,379</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,825</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,204</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">46,186</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,239</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,425</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,576</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,576</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">70,111</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">70,111</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative instruments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">54,391</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">18,530</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other
inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td align="right">73,181</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">720,605</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">42,064</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">799,989</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash equivalents
</div></td>
<td> </td>
<td> </td>
<td align="right">13,352</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,352</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right">1,139</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,240</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,379</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="right">   $ </td>
<td align="right">87,672</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">720,605</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">44,304</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">(35,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">   $ </td>
<td align="right">816,720</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="right">   $ </td>
<td align="right">26,474</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">26,474</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,678</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,678</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">114,568</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,771</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122,339</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,783</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,937</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,001</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,001</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government securities
</div></td>
<td> </td>
<td> </td>
<td align="right">102,911</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">102,911</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Derivative instruments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,839</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,455</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other
inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td align="right">129,385</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">211,324</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,925</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,839</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">335,795</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities
</div></td>
<td> </td>
<td align="right">   $ </td>
<td align="right">129,385</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">211,324</td>
<td> </td>
<td> </td>
<td align="right">   $ </td>
<td align="right">9,944</td>
<td> </td>
<td> </td>
<td align="right" nowrap="nowrap">   $ </td>
<td align="right">(14,839</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">   $ </td>
<td align="right">335,814</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(1)</i></td>
<td> </td>
<td>
<div align="justify"><i>Represents cash collateral and the impact of netting on a counterparty basis. The Company
had no securities posted as collateral to its counterparties.</i>
</div></td>
</tr>
</table>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The
Company’s Level III assets were $49.4 million and $44.3 million, or 5.2 percent and 5.4 percent
of financial instruments measured at fair value as of September 30, 2010, and December 31, 2009,
respectively. Transfers between levels are recognized at the beginning of the reporting period.
There were $13.2 million of net transfers of financial assets from Level II to Level III during the
nine months ended September 30, 2010 related primarily to fixed income securities and asset-backed
securities for which no recent trade activity was observed and valuation inputs became
unobservable. There were $1.8 million of net transfers of financial liabilities from Level III to
Level II for the nine months ended September 30, 2010 related to asset-backed securities for which
market trades were observed that provided transparency into the valuation of these liabilities,
offset in part by fixed income securities for which valuation inputs became unobservable. Transfers
between Level I and Level II were not material for the nine months ended September 30, 2010. At
September 30, 2010, the Company’s Level II and Level III equities securities increased due to the
purchase of non-exchange traded equities securities. Historically, the Company did not hold this
type of security for trading purposes.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">The following tables summarize the changes in fair value associated with Level III financial
instruments during the nine months ended September 30, 2010 and 2009:
</div>
<div align="center">
<table style="font-size: 8pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance at</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance at</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Purchases/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Net transfers</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Realized gains/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized gains/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i>(Dollars in thousands)</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(sales), net</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">in/(out)</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(losses) (1)</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(losses) (1)</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Equity securities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">2,411</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(140</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>2,280</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,103</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(86</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,753</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,119</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>9,889</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,326</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,102</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">575</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(176</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>4,175</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Tax-exempt securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,352</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,353</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,825</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,389</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,291</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">130</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>275</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>24,239</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,678</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">7,232</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,621</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(93</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>26,321</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>42,064</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,527</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">13,248</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,667</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">841</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>46,293</b></td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,240</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(365</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">219</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,053</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,147</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>44,304</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(14,892</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">13,248</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">4,886</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">1,894</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>49,440</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>7,771</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(7,960</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">2,053</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">7</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">209</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>2,080</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,154</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,768</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,872</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(95</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">185</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,140</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>9,925</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,192</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,819</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(88</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">394</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>5,220</b></td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>19</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(97</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(48</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>9,944</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(3,289</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">(1,819</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">(136</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">521</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>5,221</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance at</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Balance at</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Purchases/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Net transfers</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Realized gains/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized gains/</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i>(Dollars in thousands)</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2008</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(sales), net</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">in/(out)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(losses) (1)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(losses) (1)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2009</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Assets:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Convertible securities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>3,671</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(3,671</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>-</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,138</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,451</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">610</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">305</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,477</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,750</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">175</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(527</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>17,298</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,560</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,041</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,877</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,025</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,298</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>58,801</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other inventory
positions owned:
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>46,125</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,711</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,998</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,076</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>83,576</b></td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>433</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,658</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,109</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>46,558</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">23,657</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">9,738</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">2,998</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">2,734</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>85,685</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Liabilities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">1,341</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(268</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">39</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(32</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>1,080</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total financial instruments and other inventory
positions sold, but not yet purchased:
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,341</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(268</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">39</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>1,080</b></td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>366</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(347</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right"><b>19</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:45px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>366</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">1,341</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(268</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   $</td>
<td align="right">39</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">(379</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>1,099</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(1)</i></td>
<td> </td>
<td>
<div align="justify"><i>Realized and unrealized gains/(losses) related to financial instruments, with the exception
of foreign currency forward contracts and customer match-book derivatives, are reported in
institutional brokerage on the consolidated statements of operations. Realized and unrealized
gains/(losses) related to foreign currency forward contracts are recorded in other operating
expenses. Realized and unrealized gains/(losses) related to customer match-book derivatives
are reported in investment banking. Realized and unrealized gains/(losses) related to
investments are reported in other income/(loss) on the consolidated statements of operations.</i>
</div></td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Some of the Company’s financial instruments are not measured at fair value on a recurring
basis, but are recorded at amounts that approximate fair value due to their liquid or short-term
nature. Such financial assets and financial liabilities include cash, securities either purchased
or sold under agreements to resell, receivables and payables either from or to customers and
brokers, dealers and clearing organizations and short-term financings.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:ScheduleOfVariableInterestEntitiesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="margin-top: 12pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><b>Note 7</b></td>
<td> </td>
<td><i>Variable Interest Entities</i></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In the normal course of business, the Company periodically creates or transacts with entities that
are investment vehicles organized as limited partnerships or limited liability companies. These
entities were established for the purpose of investing in equity and debt securities of public and
private investments and were initially financed through the capital commitments of the members. The
Company has investments in and/or acts as the managing partner or member of these entities. In
certain instances, the Company provides management and investment advisory services for which it
earns fees generally based upon the market value of assets under management and may include
incentive fees based upon performance. At September 30, 2010, the Company’s aggregate net
investment in these investment vehicles totaled $17.8 million. The Company’s remaining capital
commitments to these entities was $2.7 million at September 30, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Variable interest entities (“VIEs”) are entities in which equity investors lack the characteristics
of a controlling financial interest or do not have sufficient equity at risk for the entity to
finance its activities. The determination as to whether an entity is a VIE is based on the amount
and nature of the members’ equity investment in the entity. The Company also considers other
characteristics such as the power through voting rights or similar rights to direct the activities
of an entity that most significantly impact the entity’s economic performance. For those entities
that meet the deferral provisions defined by ASU 2010-10, the Company considers characteristics
such as the ability to influence the decision making about the entity’s activities and how the
entity is financed. The Company has identified certain of the entities described above as VIEs.
These VIEs had net assets approximating $787.7 million at September 30, 2010. The Company’s
exposure to loss from these VIEs is $5.3 million, which is the carrying value of its capital
contributions recorded in other assets on the consolidated statement of financial condition at
September 30, 2010. The Company had no liabilities related to these VIEs at September 30, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company is required to consolidate all VIEs for which it is considered to be the primary
beneficiary. The determination as to whether the Company is considered to be the primary
beneficiary is based on whether the Company has both the power to direct the activities of the VIE
that most significantly impact the entity’s economic performance and the obligation to absorb
losses or the right to receive benefits of the VIE that could potentially be significant to the
VIE. For those entities that meet the deferral provisions defined by ASU 2010-10, the determination
as to whether the Company is considered to be the primary beneficiary is based on whether the
Company will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s
expected residual returns, or both. It was determined the Company is not the primary beneficiary of
these VIEs and accordingly does not consolidate them.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company has not provided financial or other support to these VIEs that it was not previously
contractually required to provide as of September 30, 2010.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:BrokersAndDealersDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="margin-top: 12pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><b>Note 8</b></td>
<td> </td>
<td><i>Receivables from and Payables to Brokers, Dealers and Clearing Organizations</i></td>
</tr>
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Amounts receivable from brokers, dealers and clearing organizations at September 30, 2010 and
December 31, 2009 included:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Receivable arising from unsettled securities transactions, net
</div></td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">35,324</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deposits paid for securities borrowed
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>75,892</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">166,399</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Receivable from clearing organizations
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>16,003</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,388</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deposits with clearing organizations
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,375</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,010</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Securities failed to deliver
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>14,822</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,102</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,860</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,838</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">  <b>$</b></td>
<td align="right"><b>145,952</b></td>
<td> </td>
<td> </td>
<td align="left">  $</td>
<td align="right">262,061</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Amounts payable to brokers, dealers and clearing organizations at September 30, 2010 and
December 31, 2009 included:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Payable arising from unsettled securities transactions, net
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>45,724</b></td>
<td> </td>
<td> </td>
<td align="right">   $</td>
<td align="right">-</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deposits received for securities loaned
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,988</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Payable to clearing organizations
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>11,259</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,975</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Securities failed to receive
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>7,994</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,118</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>10,331</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,737</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>75,308</b></td>
<td> </td>
<td> </td>
<td align="right">   $</td>
<td align="right">71,818</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Deposits paid for securities borrowed and deposits received for securities loaned approximate the
market value of the securities. Securities failed to deliver and receive represent the contract
value of securities that have not been delivered or received by the Company on settlement date.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - pjc:CollateralizedSecuritiesTransactionsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 9 </b><i>Collateralized Securities Transactions</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s financing and customer securities activities involve the Company using securities as
collateral. In the event that the counterparty does not meet its contractual obligation to return
securities used as collateral, or customers do not deposit additional securities or cash for margin
when required, the Company may be exposed to the risk of reacquiring the securities or selling the
securities at unfavorable market prices in order to satisfy its obligations to its customers or
counterparties. The Company seeks to control this risk by monitoring the market value of securities
pledged or used as collateral on a daily basis and requiring adjustments in the event of excess
market exposure.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In the normal course of business, the Company obtains securities purchased under agreements to
resell, securities borrowed and margin agreements on terms that permit it to repledge or resell the
securities to others. The Company obtained securities with a fair value of approximately $354.1
million and $332.3 million at September 30, 2010 and December 31, 2009, respectively, of which
$324.5 million and $144.5 million, respectively, has been either pledged or otherwise transferred
to others in connection with the Company’s financing activities or to satisfy its commitments under
financial instruments and other inventory positions sold, but not yet purchased.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">At September 30, 2010, the Company’s securities sold under agreements to repurchase (“Repurchase
Liabilities”) exceeded 10 percent of total assets.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following is a summary of Repurchase Liabilities
and the fair market value of related collateral pledged as of September 30, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Fair Market</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>Repurchase</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Liabilities</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Interest Rates</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Overnight maturities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td align="left">   $</td>
<td align="right">15,213</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">12,349</td>
<td> </td>
<td> </td>
<td align="center" colspan="3">1.23%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Municipal securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Taxable securities
</div></td>
<td> </td>
<td> </td>
<td align="right">126,519</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">103,810</td>
<td> </td>
<td> </td>
<td align="center" colspan="3">1.23%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Tax-exempt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">23,169</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,118</td>
<td> </td>
<td> </td>
<td align="center" colspan="3">1.23%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Short-term securities
</div></td>
<td> </td>
<td> </td>
<td align="right">17,717</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,723</td>
<td> </td>
<td> </td>
<td align="center" colspan="3">1.23%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>On demand maturities:</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate securities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income securities
</div></td>
<td> </td>
<td> </td>
<td align="right">78,789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73,422</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">0.65-0.95%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Asset-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">6,564</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,850</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">0.45%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">U.S. government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">91,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">84,105</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">0.40-0.45%</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">   $</td>
<td align="right">359,144</td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">313,377</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 10 - pjc:OtherAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 10 </b><i>Other Assets</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Other assets include investments in public companies valued at fair value, equity and debt
investments in private companies valued at cost, investments in private equity partnerships that
are valued using the equity method of accounting, net deferred tax assets and prepaid expenses.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Other assets at September 30, 2010 and December 31, 2009 included:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i><font style="font-size: 8pt">(Dollars in thousands)</font></i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments at fair value
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>5,729</b></td>
<td> </td>
<td> </td>
<td align="left">   $ </td>
<td align="right">3,379</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments at cost
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>27,469</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,687</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments valued using equity method
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,146</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,825</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net deferred income tax assets
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>66,673</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">80,058</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Prepaid expenses
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>5,370</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,840</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,239</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,846</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total other assets
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>124,626</b></td>
<td> </td>
<td> </td>
<td align="left">   $ </td>
<td align="right">139,635</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">At September 30, 2010, the estimated fair market value of investments carried at cost totaled $34.5
million. The estimated fair value of investments carried at cost is based upon valuation models and
other valuation techniques, which require a large degree of management judgment.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 11 </b><i>Goodwill and Intangible Assets</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table presents the changes in the carrying value of goodwill and intangible assets
for the nine months ended September 30, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Capital Markets</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Asset Management</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><b>Goodwill</b></td>
<td> </td>
<td> </td> <td> </td>
<td> </td>
<td> </td>
<td> </td> <td> </td>
<td> </td>
<td> </td>
<td> </td> <td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b>
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>120,298</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>44,327</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>164,625</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill recorded in purchase of ARI
</div></td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,282</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,282</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">FAMCO earn-out payment adjustment
</div></td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at September 30, 2010</b>
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>120,298</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>196,636</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>316,934</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Intangible assets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b>
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>12,067</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>12,067</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets acquired in purchase of ARI
</div></td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">55,059</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">55,059</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Amortization of intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,363</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,363</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at September 30, 2010</b>
</div></td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>61,763</b></td>
<td> </td>
<td> </td>
<td align="left"><b>   $ </b></td>
<td align="right"><b>61,763</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The addition of goodwill and intangible assets during the nine months ended September 30, 2010
primarily related to the acquisition of ARI, as discussed in Note 4. Management identified $55.1
million of intangible assets, consisting primarily of the customer relationships ($52.2 million),
which are being amortized over a weighted average life of 10 years, and the ARI trade name ($2.9
million), which has an indefinite life and will not be amortized.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the aggregate future amortization of the Company’s intangible
assets:
</div>
<div align="center" style="margin-left: 2%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="93%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><i>(Dollars in thousands)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left"><b>Years Ended December 31,</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Remainder of 2010
</div></td>
<td> </td>
<td align="left">   $</td>
<td align="right">         2,184</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2011
</div></td>
<td> </td>
<td> </td>
<td align="right">8,276</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2012
</div></td>
<td> </td>
<td> </td>
<td align="right">7,668</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">2013
</div></td>
<td> </td>
<td> </td>
<td align="right">7,325</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">2014
</div></td>
<td> </td>
<td> </td>
<td align="right">6,938</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Thereafter
</div></td>
<td> </td>
<td> </td>
<td align="right">26,512</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="left">   $</td>
<td align="right">58,903</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<!-- Begin Block Tagged Note 12 - us-gaap:ShortTermDebtTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 12 </b><i>Short-Term Financing</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following is a summary of short-term financing and the weighted average interest rates on
borrowings as of September 30, 2010 and December 31, 2009:
</div>
<div align="center" style="margin-left: 1%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="99%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Weighted Average</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Outstanding Balance</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Interest Rate</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000" colspan="2"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000" colspan="2"> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Bank lines (secured)
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>50,000</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">68,000</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.50</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.35</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Commercial paper (secured)
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>57,023</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,079</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>1.29</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.25</td>
<td nowrap="nowrap">%</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total short-term financing
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>107,023</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">90,079</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company has committed short-term bank line financing available on a secured basis and
uncommitted short-term bank line financing available on both a secured and unsecured basis. The
Company uses these credit facilities in the ordinary course of business to fund a portion of its
daily operations and the amount borrowed under these credit facilities varies daily based on the
Company’s funding needs.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s committed short-term bank line financing at September 30, 2010, consisted of a $250
million committed revolving credit facility with U.S. Bank, N.A. Advances under this facility are
secured by certain marketable securities. The unpaid principal amount of all advances under this
facility will be due on December 31, 2010. The Company pays a nonrefundable commitment fee on the
unused portion of the facility on a quarterly basis.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s uncommitted secured lines at September 30, 2010, totaled $275 million with three
banks and are dependent on having appropriate collateral, as determined by the bank agreement, to
secure an advance under the line. The availability of the Company’s uncommitted lines are subject
to approval by the individual banks each time an advance is requested and may be denied. In
addition, the Company has established arrangements to obtain financing by another broker dealer at
the end of each business day related specifically to its convertible inventory.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In 2009, the Company initiated a secured commercial paper program to provide another funding source
for its securities inventory. The senior secured commercial paper notes (“Series A CP Notes”) are
secured by the Company’s securities inventory with maturities on the Series A CP Notes ranging from
twenty-seven days to ninety-two days from the date of issuance. The Series A CP Notes are
interest-bearing or sold at a discount to par with an interest rate based on the London Interbank
Offered Rate (“LIBOR”) plus an applicable margin.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">As part of these short-term financing arrangements, the Company is subject to various financial and
operational covenants. At September 30, 2010, the Company was in compliance with all covenants
related to its financing facilities.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<!-- Begin Block Tagged Note 13 - pjc:VariableRateSeniorNotesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 13 </b><i>Variable Rate Senior Notes</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">On December 31, 2009, the Company issued unsecured variable rate senior notes (“Notes”) in the
amount of $120 million. The initial holders of the Notes are certain entities advised by PIMCO.
Interest is based on an annual rate equal to LIBOR plus 4.10%, adjustable and payable quarterly.
The weighted average interest rate for the nine months ended September 30, 2010, was 4.46%. The
proceeds from the Notes were used to fund a portion of the ARI acquisition discussed further in
Note 4 to our consolidated financial statements. The unpaid principal amount of the Notes will be
due on December 31, 2010.
</div>
</div>
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<!-- Begin Block Tagged Note 14 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 14 </b><i>Legal Contingencies</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company has been named as a defendant in various legal actions, including complaints and
litigation and arbitration claims, arising from its business activities. Such actions include
claims related to securities brokerage and investment banking activities, and certain class actions
that primarily allege violations of securities laws and seek unspecified damages, which could be
substantial. Also, the Company is involved from time to time in investigations and proceedings by
governmental agencies and self-regulatory organizations. The Company has established reserves for
potential losses that are probable and reasonably estimable that may result from pending and
potential legal actions, investigations and regulatory proceedings.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Given uncertainties regarding the timing, scope, volume and outcome of pending and potential legal
actions, investigations and regulatory proceedings and other factors, the amounts of reserves are
difficult to determine and of necessity subject to future revision. Subject to the foregoing,
management of the Company believes, based on its current knowledge, after consultation with outside
legal counsel and taking into account its established reserves, that pending legal actions,
investigations and regulatory proceedings will be resolved with no material adverse effect on the
consolidated financial condition of the Company. However, if during any period a potential adverse
contingency should become probable or resolved for an amount in excess of the established reserves,
the results of operations in that period could be materially adversely affected.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company is a defendant in two potentially material legal proceedings as described below.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The U.S. Department of Justice (“DOJ”), Antitrust Division, the SEC and various state attorneys
general are conducting broad investigations of numerous firms for possible antitrust and securities
violations in connection with the bidding or sale of guaranteed investment contracts and
derivatives to municipal issuers from the early 1990s to date. These investigations commenced in
November 2006. In addition, several class action complaints have been brought on behalf of a
purposed class of government entities that purchased municipal derivatives. The complaints allege
antitrust violations and civil fraud and are pending in a U.S. District Court under the
multi-district litigation rules. No loss contingency has been reflected in the Company’s
consolidated financial statements as this contingency is neither probable nor reasonably estimable
at this time. An estimate of the loss, or range of loss that is reasonably possible, cannot be made
at this time.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Piper Jaffray has been named as a defendant in a complaint filed in federal district court in Des
Moines, Iowa on June 30, 2006. The claim arises in connection with two municipal financings
completed by Union County in 1997 and 1998 aggregating approximately $6.0 million, for which Piper
Jaffray acted as underwriter, and alleges breach of fiduciary duty, breach of contract, negligent
misrepresentation, negligence and fraud. On September 29, 2010, Piper Jaffray’s motion for summary
judgment was granted in part (with respect to the breach of contract claim) and denied in part (as
to the other claims). A trial is currently scheduled to commence on December 6, 2010. The Company
believes that it has meritorious defenses to the action and intends to vigorously defend against
it. The Company is not able to predict with certainty the outcome of this matter, nor the amount,
if any, of an eventual settlement or judgment. The Company believes an estimate of the range of
loss that is reasonably possible is between $0 to $6.0 million as of September 30, 2010.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
</div>
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<!-- Begin Block Tagged Note 15 - pjc:RestructuringAndRelatedActivityDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 15 </b><i>Restructuring</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">On August 11, 2006, the Company completed the sale of its Private Client Services (“PCS”) branch
network and certain related assets to UBS Financial Services, Inc., a subsidiary of UBS AG (“UBS”),
thereby exiting the PCS business. In connection with the sale of the Company’s PCS branch network,
the Company initiated a plan to significantly restructure the Company’s support infrastructure. All
restructuring costs related to the sale of the PCS branch network were included within discontinued
operations. The following table presents a summary of activity with respect to the
restructuring-related liabilities included in other liabilities and accrued expenses on the
consolidated statements of financial condition related to the sale of the PCS branch network:
</div>
<div align="center" style="margin-left: 2%; margin-right: 2%">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="96%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>PCS</b></td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars
in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">  <b>Restructuring</b>  </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at December 31, 2009</b>
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>7,565</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Recovery of provision charged to operations
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(118</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash outlays
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,019</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-cash write-downs
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Balance at September 30, 2010</b>
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>5,411</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In the third quarter of 2010, the Company incurred pre-tax restructuring-related expenses of $1.3
million. The expense resulted from headcount reductions in the Capital Markets segment, the
majority of which were related to its European operations.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In October 2010, the Company announced plans to restructure its European operations. See Note 23
for further discussion.
</div>
</div>
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<!-- Begin Block Tagged Note 16 - us-gaap:StockholdersEquityNoteDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 16 </b><i>Shareholders’ Equity</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt"><b>Share Repurchase Program</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In the second quarter of 2008, the Company’s board of directors authorized the repurchase of up to
$100 million in common shares through June 30, 2010. During the six months ended June 30, 2010, the
Company repurchased 893,050 shares of the Company’s common stock at an average price of $33.57 per
share for an aggregate purchase price of $30.0 million related to this authorization. The share
repurchase authorization expired as of June 30, 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In the third quarter of 2010, the Company’s board of directors authorized the repurchase of up to
$75 million in common shares through September 30, 2012. During the three months ended September
30, 2010, the Company repurchased 540,532 shares of the Company’s common stock at an average price
of $28.16 per share for an aggregate purchase price of $15.2 million related to this authorization.
The Company has $59.8 million remaining under this authorization.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Issuance of Shares</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In March 2010, the Company issued 881,846 restricted shares and 11,259 unrestricted shares in
conjunction with the acquisition of ARI as described in Note 4. The restricted shares issued in
conjunction with the acquisition of ARI vest ratably over four years in equal installments
beginning on March 1, 2011, and ending on March 1, 2014. These restricted shares provide for
continued vesting after termination, so long as the employee does not violate certain
non-solicitation restrictions.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">During the nine months ended September 30, 2010, the Company issued 81,696 common shares out of
treasury stock in fulfillment of $3.6 million in obligations under the Piper Jaffray Companies
Retirement Plan and issued 404,115 common shares out of treasury stock as a result of vesting and
exercise transactions under the Piper Jaffray Companies Amended and Restated 2003 Annual and
Long-Term Incentive Plan.
</div>
</div>
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<!-- Begin Block Tagged Note 17 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 17 </b><i>Earnings Per Share</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company calculates earnings per share using the two-class method. Basic earnings per common
share is computed by dividing net income applicable to common shareholders by the weighted average
number of common shares outstanding for the period. Net income applicable to common shareholders represents net income reduced by the allocation of
earnings to participating securities. All of the Company’s outstanding restricted shares are deemed
to be participating securities because they are eligible to share in the
profits (e.g. receive dividends) of the Company. Losses are not allocated to participating securities. Diluted earnings
per common share is calculated by adjusting the weighted average outstanding shares to assume
conversion of all potentially dilutive stock options. The computation of earnings per share is as
follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%" nowrap="nowrap">         </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Nine Months Ended September 30,</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Amounts in thousands, except per share data)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>7,054</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">9,266</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>14,942</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">18,117</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Earnings allocated to participating securities (2)
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,639</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,690</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,271</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,254</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income applicable to common shareholders (1)
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>5,415</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">7,576</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>11,671</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">14,863</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Shares for basic and diluted calculations:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Average shares used in basic computation
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>15,035</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>15,588</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,001</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Stock options
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>3</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>38</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Restricted stock (2)
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>-</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Average shares used in diluted computation
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>15,038</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,131</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>15,626</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,039</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr>
<td style="font-size:10pt"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Earnings per share:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>0.36</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">0.47</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>0.75</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">0.93</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>0.36</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">0.47</td>
<td> </td>
<td> </td>
<td align="left">   <b>$</b></td>
<td align="right"><b>0.75</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">0.93</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(1)</i></td>
<td> </td>
<td>
<div align="justify"><i>Net income applicable to common shareholders for diluted and basic EPS may differ under the
two-class method as a result of adding the effect of the assumed exercise of stock options to
dilutive shares outstanding, which alters the ratio used to allocate earnings to common
shareholders and participating securities for purposes of calculating diluted and basic EPS.</i>
</div></td>
</tr>
<tr style="font-size: 6pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><i>(2)</i></td>
<td> </td>
<td>
<div align="justify"><i>Participating securities were included in the calculation of diluted EPS using the two-class
method, as this computation was more dilutive than the calculation using the treasury-stock
method.</i>
</div></td>
</tr>
</table>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The anti-dilutive effects from stock options were immaterial for the periods ended September
30, 2010 and 2009.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 18 - us-gaap:PensionAndOtherPostretirementBenefitsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 18 </b><i>Employee Benefit Plans</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Certain employees participated in the Piper Jaffray Companies Non-Qualified Retirement Plan (“the
Non-Qualified Plan”), an unfunded, non-qualified cash balance pension plan. The Company froze the
plan effective January 1, 2004, thereby eliminating future benefits related to pay increases and
excluding new participants from the plan. Effective December 31, 2009, the Company resolved to
terminate the Non-Qualified Plan through lump sum cash distributions to all participants. These
lump-sum cash payments, totaling $10.4 million, were based on the December 31, 2009 actuarial
valuation of the Non-Qualified Plan and were distributed on March 15, 2010. In 2010, the Company
recognized settlement expense of $0.2 million in compensation and benefits expense on the
consolidated statement of operations related to the settlement of all Non-Qualified Plan
liabilities.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 19 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 19 </b><i>Stock-Based Compensation</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company accounts for equity awards in accordance with FASB Accounting Standards Codification
Topic 718, “Compensation — Stock Compensation,” (“ASC 718”), which requires all share-based
payments to employees, including grants of employee stock options, to be recognized in the
statements of operations at grant date fair value over the service period of the award, net of
estimated forfeitures.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s primary stock-based compensation plan, Piper Jaffray Companies Amended and Restated
2003 Annual and Long-Term Incentive Plan, (the “Incentive Plan”), permits the grant of equity
awards, including restricted stock and non-qualified stock options, to the Company’s employees and
directors for up to 7.0 million shares of common stock. The Company periodically grants shares of
restricted stock to employees and grants shares of Piper Jaffray Companies common stock to its
non-employee directors. The Company also previously granted options to purchase Piper Jaffray
Companies common stock to employees and non-employee directors. The Company believes that such
awards help align the interests of employees and directors with those of shareholders and
serve as an employee retention tool. The awards granted to employees under the Incentive Plan have
the following vesting periods: approximately 79 percent of the awards have three-year cliff vesting
periods, approximately 11 percent of the awards vest ratably from 2011 through 2013 on the annual
grant date anniversary, and approximately 10 percent of the awards cliff vest upon meeting a
specific performance-based metric prior to May 2013. The director awards are fully vested upon
grant. The plan provides for accelerated vesting of option and restricted stock awards if there is
a change in control of the Company (as defined in the plan), in the event of a participant’s death,
and at the discretion of the compensation committee of the Company’s board of directors.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Employee and director stock options were expensed by the Company on a straight-line basis over
the required service period, based on the estimated fair value of the award on the date of grant
using a Black-Scholes option-pricing model. The maximum term of the stock options granted to
employees and directors is ten years. The Company has not granted stock options since 2008.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Restricted stock grants are valued at the market price of the Company’s common stock on the date of
grant. Restricted stock grants are amortized over the service period. The majority of the Company’s
restricted stock grants provide for continued vesting after termination, so long as the employee
does not violate certain post-termination restrictions. These post-termination restrictions do not
meet the criteria for an in-substance service condition as defined by ASC 718. Accordingly, such
restricted stock grants are fully expensed in the period in which those awards are deemed to be
earned, which is generally the calendar year preceding the February grant date each year. For
example, the Company recognized compensation expense during fiscal 2009 for its annual February
2010 restricted stock grants.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In accordance with ASC 718, if any equity award is forfeited as a result of violating the
post-termination restrictions, the lower of the fair value of the award at grant date or the fair
value of the award at the date of forfeiture is recorded within the consolidated statements of
operations as other income. The Company recorded $0.7 million and $4.5 million of forfeitures
through other income for the three and nine months ended September 30, 2010, respectively. The
amount the Company recorded to other income from cancellations for the three and nine months ended
September 30, 2009 were not significant.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Performance-based restricted stock awards granted in 2008 and 2009 were valued at the market price
of the Company’s common stock on the date of grant. The restricted shares are amortized on a
straight-line basis over the period the Company expects the performance target to be met. The
performance condition must be met for the awards to vest and total compensation cost will be
recognized only if the performance condition is satisfied. The probability that the performance
condition will be achieved and that the awards will vest is reevaluated each reporting period with
changes in actual or estimated outcomes accounted for using a cumulative effect adjustment. In the
third quarter of 2010, the Company deemed it improbable that the performance condition related to
the performance-based restricted stock grants would be met. As a result, the Company recorded a
$6.6 million cumulative effect compensation expense reversal in the third quarter of 2010.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">In 2010, the Company established the 2010 Employment Inducement Award Plan (the “Inducement Plan”)
in conjunction with the acquisition of ARI. The Company granted $7.0 million (158,801 shares) in
restricted shares under the Inducement Plan to ARI employees upon closing of the transaction. These
shares vest ratably over five years in equal installments beginning on March 1, 2011, and ending on
March 1, 2015. The Company records compensation expense for this $7.0 million restricted stock
grant on a pro rata basis over the five year vesting period. Unvested shares granted under the
Inducement Plan are cancelled upon the termination of employment by the award recipient.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company recorded compensation expense of $0.8 million and $11.6 million for the three months
ended September 30, 2010 and 2009, respectively, and $20.0 million and $31.4 million for the nine
months ended September 30, 2010 and 2009, respectively, related to employee restricted stock. The
three and nine months ended September 30, 2010 included the $6.6 million cumulative effect
adjustment discussed above related to the performance-based restricted stock awards. The tax
benefit related to the total compensation cost for stock-based compensation arrangements totaled
$0.3 million and $4.5 million for the three months ended September 30, 2010 and 2009, respectively,
and $7.9 million and $12.2 million for the nine months ended September 30, 2010 and 2009,
respectively.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the changes in the Company’s non-vested restricted stock for the
nine months ended September 30, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Non-Vested</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Restricted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Grant Date</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Stock</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">    <b>Fair Value</b>    </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>December 31, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td align="right">          <b>3,512,749</b></td>
<td> </td>
<td> </td>
<td align="center"><b>$</b></td>
<td align="right">          <b>40.46</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">1,904,618</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">41.90</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(633,236</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">64.75</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(258,422</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">38.08</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>September 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>4,525,709</b></td>
<td> </td>
<td> </td>
<td align="center"><b>$</b></td>
<td align="right"><b>38.39</b></td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">As of September 30, 2010, there was $21.4 million of total unrecognized compensation cost
related to restricted stock expected to be recognized over a weighted average period of 2.64 years.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the changes in the Company’s outstanding stock options for the nine
months ended September 30, 2010:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="1%">     </td>
<td width="10%">       </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Aggregate</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Options</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Contractual</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Intrinsic</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">    <b>Outstanding</b>    </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Term (Years)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>December 31, 2009</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>538,804</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>44.50</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="center"><b>5.7</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>4,237,480</b></td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,456</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">40.06</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cancelled
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,370</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">42.14</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>September 30, 2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>520,978</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>44.60</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="center"><b>5.1</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>25,594</b></td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Options exercisable
at September 30,
2010</b>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>404,314</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>45.62</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="center"><b>4.4</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>25,594</b></td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">As of September 30, 2010, there was no unrecognized compensation cost related to stock options
expected to be recognized over future years.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Cash received from option exercises for the nine months ended September 30, 2010 was $0.1 million.
The tax benefit realized for the tax deduction from option exercises was immaterial for the nine
months ended September 30, 2010. Cash received from option exercises for the nine months ended
September 30, 2009 was $1.0 million. The tax deduction from option exercises totaled $0.4 million
for the nine months ended September 30, 2009.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 20 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 20 </b><i>Segment Reporting</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">On March 1, 2010, the Company completed the purchase of ARI, which expanded the Company’s asset
management business and resulted in a change to its reportable business segments. In connection
with this change, the Company has reclassified prior period segment results to conform to the
current period presentation.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Basis for Presentation</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company structures its segments primarily based upon the nature of the financial products and
services provided to customers and the Company’s management organization. It evaluates performance
and allocates resources based on segment pre-tax operating income or loss and segment pre-tax
operating margin. Revenues and expenses directly associated with each respective segment are
included in determining their operating results. Other revenues and expenses that are not directly
attributable to a particular segment are allocated based upon the Company’s allocation
methodologies, based on each segment’s respective net revenues, use of shared resources, headcount
or other relevant measures. The financial management of assets is performed on an enterprise-wide
basis. As such, assets are not assigned to the business segments.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">Reportable segment financial results are as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Nine
Months Ended September 30,</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Capital Markets</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Investment banking
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Financing
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:60px; text-indent:-15px">Equities
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>19,839</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">17,769</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>71,603</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">45,126</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:60px; text-indent:-15px">Debt
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>16,486</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,493</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>46,022</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,007</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Advisory services
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>20,595</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,138</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>55,767</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">38,527</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px"><i>Total investment banking</i>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>56,920</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,400</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>173,392</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136,660</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Institutional sales and trading
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Equities
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>24,292</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,438</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>78,720</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">92,484</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Fixed income
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>20,159</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,101</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>57,268</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95,072</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px"><i>Total institutional sales and trading</i>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>44,451</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63,539</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>135,988</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">187,556</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px"><i>Other income/(loss)</i>
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,956</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">3,954</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,452</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,644</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net revenues
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>99,415</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115,893</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>311,832</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">325,860</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating expenses (1)
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>90,136</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">99,794</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>286,276</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">285,247</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Segment pre-tax operating income
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>9,279</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">16,099</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>25,556</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">40,613</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Segment pre-tax operating margin
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>9.3</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">13.9</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>8.2</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">12.5</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Asset Management</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px"><i>Management and performance fees</i>
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>16,812</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">3,568</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>41,839</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">9,817</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px"><i>Other income/(loss)</i>
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>236</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>31</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">164</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Net revenues
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,048</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,776</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>41,870</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,981</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating expenses (1)
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>12,749</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,293</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>32,857</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,050</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Segment pre-tax operating income/(loss)
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>4,299</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">   $</td>
<td align="right">(517</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>9,013</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">   $</td>
<td align="right">(3,069</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Segment pre-tax operating margin
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>25.2</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td> </td>
<td align="right">N/M</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>21.5</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td> </td>
<td align="right">N/M</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Total</b>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Net revenues
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>116,463</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">119,669</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>353,702</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">335,841</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Operating expenses (1)
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>102,885</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104,087</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>319,133</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">298,297</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Total segment pre-tax operating income
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>13,578</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">15,582</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>34,569</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">37,544</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Pre-tax operating margin
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>11.7</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">13.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>9.8</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">11.2</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left">
<div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 0px solid #000000">
</div>
</div>
<div align="left" style="font-size: 8pt; margin-top: 3pt"><i>N/M – Not meaningful</i>
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 8pt; text-align: left">
<tr valign="top" style="font-size: 8pt; color: #000000; background: transparent">
<td width="1%" nowrap="nowrap" align="left"><i>(1)</i></td>
<td width="1%"> </td>
<td><i>Operating expenses include intangible asset amortization as set forth in the table below:</i></td>
</tr>
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">       </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Nine
Months Ended September 30,</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Capital Markets
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>-   </b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">-   </td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>-   </b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">-</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset Management
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,183</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">614</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,363</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,842</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total amortization
</div></td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>2,183</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">614</td>
<td> </td>
<td> </td>
<td align="left"><b>   $</b></td>
<td align="right"><b>5,363</b></td>
<td> </td>
<td> </td>
<td align="left">   $</td>
<td align="right">1,842</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Geographic Areas</b>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company operates in both U.S. and non-U.S. markets. The Company’s non-U.S. business activities
are conducted through European and Asian locations. Net revenues disclosed in the following table
reflect the regional view, with net investment banking revenues allocated to geographic locations
based upon the location of the client and investment banking team and net institutional sales and
trading revenues allocated based upon the location of the client.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">        </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">        </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">        </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Three Months Ended</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Nine Months Ended</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>September 30,</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><font style="font-size: 8pt"><i>(Dollars in thousands)</i></font></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td style="border-bottom: 1px solid #000000"> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net revenues:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right">      <b>103,551</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">      111,551</td>
<td> </td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right">      <b>309,660</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">      313,162</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,426</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,258</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,943</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,178</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,486</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,860</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>20,099</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,501</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consolidated
</div></td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right"><b>116,463</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">119,669</td>
<td> </td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right"><b>353,702</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">335,841</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Long-lived assets are allocated to geographic locations based upon the location of the asset.
The following table presents long-lived assets by geographic region:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%">        </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"><b>September 30,</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">December 31,</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 0px solid #000000"><i>(Dollars in thousands)</i></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-lived assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">United States
</div></td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right"><b>450,956</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">260,439</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Asia
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>14,202</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,943</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Europe
</div></td>
<td> </td>
<td> </td>
<td align="right"><b>631</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">965</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consolidated
</div></td>
<td> </td>
<td align="center">   <b>$</b>   </td>
<td align="right"><b>465,789</b></td>
<td> </td>
<td> </td>
<td align="center">   $   </td>
<td align="right">273,347</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 21 - us-gaap:ComputationOfNetCapitalUnderSecuritiesAndExchangeCommissionRegulationTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 21 </b><i>Net Capital Requirements and Other Regulatory Matters</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Piper Jaffray is registered as a securities broker dealer with the SEC and is a member of various
self regulatory organizations (“SROs”) and securities exchanges. The Financial Industry Regulatory
Authority (“FINRA”) serves as Piper Jaffray’s primary SRO. Piper Jaffray is subject to the uniform
net capital rule of the SEC and the net capital rule of FINRA. Piper Jaffray has elected to use the
alternative method permitted by the SEC rule, which requires that it maintain minimum net capital
of the greater of $1.0 million or 2 percent of aggregate debit balances arising from customer
transactions, as such term is defined in the SEC rule. Under its rules, FINRA may prohibit a member
firm from expanding its business or paying dividends if resulting net capital would be less than 5
percent of aggregate debit balances. Advances to affiliates, repayment of subordinated debt,
dividend payments and other equity withdrawals by Piper Jaffray are subject to certain
notification, approval and other provisions of the SEC and FINRA rules. In addition, Piper Jaffray
is subject to certain approval requirements related to withdrawals of excess net capital.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">At September 30, 2010, net capital calculated under the SEC rule was $211.4 million, and exceeded
the minimum net capital required under the SEC rule by $210.2 million.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Piper Jaffray Ltd., which is a registered United Kingdom broker dealer, is subject to the capital
requirements of the U.K. Financial Services Authority (“FSA”). As of September 30, 2010, Piper
Jaffray Ltd. was in compliance with the capital requirements of the FSA.
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">Piper Jaffray Asia Holdings Limited operates three entities licensed by the Hong Kong Securities
and Futures Commission, which are subject to the liquid capital requirements of the Securities and
Futures (Financial Resources) Rules promulgated under the Securities and Futures Ordinance. As of
September 30, 2010, Piper Jaffray Asia regulated entities were in compliance with the liquid
capital requirements of the Hong Kong Securities and Futures Ordinance.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 22 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 22 </b><i>Income Taxes</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">The Company’s effective income tax rate for the nine months ended September 30, 2010 was 56.8%,
compared to 51.7% for the nine months ended September 30, 2009. The effective tax rate for the nine
months ended September 30, 2010 was high because the Company did not record a tax benefit related
to its U.K. subsidiary net operating loss carry forward deductions and due to a $5.6 million
write-off of a deferred tax asset resulting from restricted stock grants that vested at share
prices lower than the grant date share price. The provision for income taxes for the nine months
ended September 30, 2009 was high compared to pre-tax income because
the Company did not record a
tax benefit related to its U.K. subsidiary net operating loss carry forward deductions and incurred
approximately $3.0 million of one-time tax expense items.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 23 - us-gaap:ScheduleOfSubsequentEventsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 23 </b><i>Subsequent Event</i>
</div>
<div align="justify" style="font-size: 10pt; margin-top: 6pt">On October 20, 2010, the Company announced plans to restructure its European operations to focus
European resources on two areas: the distribution of U.S. and Asia securities to European
institutional investors and merger and acquisition advisory services. As a result of the
restructuring, the Company will exit the origination and distribution of European securities and
expects to incur restructuring charges estimated to be between $7.5 to $9.0 million, which will be
principally recorded in the fourth quarter of 2010. The Company expects to complete the transition
by December 31, 2010. For more information, see the Company’s Form 8-K filed on October 20, 2010.
</div>
</div>
false
--12-31
Q3
2010
2010-09-30
10-Q
0001230245
20790540
Yes
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PIPER JAFFRAY COMPANIES
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