Good afternoon. My name is Candice and I will be your conference operator today. At this time I would like to welcome everyone to the first quarter, 2013 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions). Mr. Jim Zemlyak, CFO of Stifel, you may begin your conference.

Thank you Candice. I would like to welcome everyone to our conference call today to discuss our first quarter 2013 financial results. Please note that this conference call is being recorded. If you’d like a copy of today’s presentation you may download slides from our website at www.stifel.com. Before we begin today’s call, I’d like to remind listeners that this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not statements of fact or guarantees of performance. They may include statements regarding other things, among other things our ability to successfully integrate acquired companies or branch offices and financial advisors, general economic, political, regulatory and market conditions, the investment banking and brokerage industry, our objectives and result and also may include our belief regarding the effect of various legal proceedings, management expectations, our liquidity and funding sources, counter party, credit risks or other similar matters. As such they are subject to risks, uncertainties and other factors that may cause actual future results to differ materially from those discussed in the statements. To supplement our financial statements presented in accordance with GAAP, we may use certain non-GAAP measures of financial performance and liquidity. These non-GAAP measures should only be considered together with the company’s GAAP results, to the extent we discuss non-GAAP measures, the reconciliation to GAAP is available on our website at www.sifel.com. And finally for a discussion of risks and uncertainties in our business, please see the business factors affecting the company and the financial services industry in the company’s Annual Report on Form 10-K and MD&A results and the company’s quarterly results on form 10-Q. I will now turn the call over to our Chairman, CEO and President of Stifel, Ron Kruszewski.

Thank you Jim. Good afternoon everyone. We are pleased with our performance for the quarter, which included record net revenues, where our profitability is clouded by merger-related charges. It is noteworthy our Global Wealth Management segment posted both, record revenue and profitability and our institutional segment generated record quarterly revenue. As we worked through our KBW integration process and related expense reductions, we expect to continue to report both GAAP and non-GAAP results for the remainder of the year. Looking forward, we are focused on leveraging our new and established businesses to drive growth and profits across the platform. Additionally, we are on track this quarter to complete the acquisition of the U.S. institutional fixed income sales and trading team, and the hiring of the European team from Knight Capital Group. The first slide I’d like to address is a market overview. Today market indices are achieving new highs with the S&P 500 I believe it closed today at 16.26. The Dow is above 15,000, so the market is scaling new heights. But in terms of equity volumes, while we’ve seen a bounce from March today, volumes remain relatively weak. They’ve been approximately 6 billion shares a day, which are well off their highs of prior years. With respect to M&A activity, we believe a fair amount of activity was pulled into the fourth quarter of 2012. As noted the number of completed M&A transactions was down 21% sequentially. On a positive note, I am optimistic about equity returns really for two factors. First, domestic equity flows turned positive in the first quarter. From the first quarter of 2010 through the end of last year, we have $370 billion of outflows from domestic equity funds. In Q1 it turned around with $20 billion of inflow. Second is the equity risk…

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

Hey Ron, how are you doing?

Good, David.

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

Well, we’ve always had a presence in Europe, selling our U.S. equity research in Europe and that goes back to our acquisition or merger with Legg Mason Capital Markets. Since that time we’ve looked at the European expansion as almost an option. The KBW business at one time was quite robust, probably was operating more of a breakeven basis last year. I’m talking about Europe and not in Asia and so we looked at it as an opportunity to build on what we already had in Europe. The Knight business, the European bond business with Knight we believe is quite profitable and so we now have some profitable scale in Europe and we’ll go on cautiously, but we see an opportunity to gain some market share there, especially with what we have with KBW, they are behind where we are in the United States and the restructuring of all of their banks, and we see some real opportunity there.

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

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

Okay, good. Thank you.

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

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

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

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

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

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

Okay, and then the question on the expenses. If we look at just the institutional business, it looks like your revenues went up quarter-over-quarter, but your comp actually went down quarter-over-quarter, and it just seems really odd to us that you’d have comp that was going down, while you’ve added employees from KBW and you’ve added employees from Miller Buckfire. So if you can kind of elaborate a little bit on that and then kind of related to that question, your comp ratio is 61% in that segment and I think that’s the lowest it’s been in two years, and revenues are kind of probably below where you think they’d be. So maybe if you could talk a little bit about that, it would be great.

Well, I think you got to go back to a couple of years where the ratio was, the institutional group was in the high 50s, and as I said last year, we were making investments in this business, which was costing some money in the comp ratio. I think that if you asked where our plan is for compensation expense in the segment, I would say that where it is today, which is for the quarter is 61%, is high. In terms of you don’t run the firm at 63% and a segment at 61% in the way we think about things. So part of it is, is that we did have record revenue and in this group, but it went from 63% to 61% and I don’t view that as significantly low.

Okay. So potentially more upside in that number then?

Yes.

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

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

Okay Ron, understood. Thank you.

Thank you.

And your next question comes from Alex Blostein. Your line is now open. Alexander Blostein – Goldman Sachs: Great, thanks. Good afternoon everybody. Maybe just a couple of questions in numbers. So you gave the pro forma revenue number for the quarter of KBW. Is it possible to get the expense number as well, so we kind of have apples to apples and if the franchise was kind of together for a full quarter, what the profitability would look like?

Well, what I’ve said is that on a core basis, there’s a lot of expenses as you know that go on in mergers, and there’s a lot of charge that they took. But as I’ve said, we believe and we’ve done a lot of work, that the core operating expenses for KBW is $60 million, and so if you want to work backwards, we had about say $7.5 million for half of a quarter and the another half would have been $7.5 million and you can do the math. But it is difficult just to – I don’t want to state numbers when they had also a lot of unusual expenses in their last month or quarter. Alexander Blostein – Goldman Sachs: Well, but I guess you guys strip out merger related expenses and things like that. So there is I guess like a quarterly expense number for KBW with the sort of apples to apples. So what we should think about on a go forward basis. I’m just trying to think like for the 467 on the revenue side, what is the expense number associated with that?

Right. Well look, I think another way to look at it could have been that you could have added to our OpEx, $7.5 million to $8 million, plus the compensation expense that would go with that. So as you go back to our merger model, and this is pretty accurate, the comp expense, we view at about 58% and the core operating expenses are not duplicate of about $15 million a quarter. Alexander Blostein – Goldman Sachs: Got you. All right, that’s helpful. And then I guess the outlook you gave on the core non-comp numbers, kind of like 107 to 110 run rate for the next couple of quarters with KBW on a full run rate basis. Are there any expense synergies that we should think about from here or the business kind of is what it is at this point. So aside from merger related things going away, there is really no incremental expense savings that will still come through?

As I’ve said, if you look at the OpEx number of 107 to 110, and then apply it against whatever revenue number that you want, to the extent that that number is over 20%, and it is, I have a firm belief that that to be efficient we should be running non-comp OpEx at 20% of net revenue. And there’s a lot of things that we’ve been looking at and we have to do a better job, frankly on the expense side. We’ve done a lot of mergers, space is one of them. We went from no space to five locations in New York, and we have plans to consolidate there and in San Francisco and a lot of expenses that are going to come out. So, I would say that what I’m trying to show is the ones, that’s where our run rate is today, but I believe that we can do better. Alexander Blostein – Goldman Sachs: Okay. And I guess just one on the strategy. You made a couple of interesting points as far as flows coming back and just greater appetite for equities and you kind of make a point of that. You believe that we’re in the earlier innings of an equity cycle. Can you run us through I guess the rational of going out and buying a fixed income franchise at this point in the cycle for Knight?

Well, first of all, yes. I mean I’ll go through it. First of all we got it right. Second of all, it fills a significant need of the Knight. U.S. business is complimentary for loan sale, distressed, high-yield business, so we did not have a lot of capability and not a lot of overlap. So that’s going to fit very nicely, but not only with our fixed income, but our equity strategy in the space. Obviously, you got equity convert, high preferred convert, high-yield to investment grade and we need this capability to compliment not only what we are doing on our fixed income offering but also for our equity platform. So we viewed it as a great opportunity. It will be a nice addition in terms of revenue and we believe that we’ve modeled this to be profitable. Alexander Blostein – Goldman Sachs: Got you. Great, thanks.

You’re welcome.

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

Hey Ron. Can you hear me?

Is this Stachnik?

Yes.

Hey, how are you?

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

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

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

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

Thank you.

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

I always listen.

All right.

Good-bye.

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

Well, I would like to take this opportunity to welcome our new partners from KBW and Miller Buckfire and our new partners from Knight and would like to just say that we look forward to our next earnings call and to show what we’ve built and what it can do, and what we’ve built and how it will perform in these markets. So I’ll end with that and look forward to seeing and talking to everyone next quarter. Thank you very much.

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