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Contributors: Douglas McIntyre Jon C. Ogg

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Thursday, September 28, 2006

Keefe, Bruyette & Woods IPO Still On Track

KBW, Inc. is still planning to come public via an IPO. For those who are not familiar with the name KBW this is the parent of Keefe, Bruyette, & Woods, a stellar investment bank that tends to focus on the financial sector.

The underwriters include KBW, Merrrill Lynch, Banc of America, Fox-Pitt Kelton, JMP Securities, Thomas Weisel, BNY Capital, and FTN Midwest.

430 people as of June 30, 2006, including 101 in investment banking, 151 in sales and trading and 82 in research; it covers 489 companies under research.

-U.S. registered broker-dealer, Keefe, Bruyette & Woods, Inc.;
-U.S. registered investment advisor, KBW Asset Management, Inc.;
-Keefe, Bruyette & Woods Limited, an investment firm authorized and regulated by the U.K. Financial Services Authority.

The firm specialized in the bank and thrift sector; and expanded the financial services sector: insurance companies, broker-dealers, mortgage banks, asset management companies, mortgage REITs, consumer and specialty finance firms, financial processing companies and securities exchanges. It also expanded from the United States into Europe with a European-focused team in the London office.

It provides research, sales & trading, investment banking, and fixed income services.

KBW posted 2005 revenues combined at $307.8 million and net income was listed at $17.4 Million on an after-tax basis. For the first 6 months of 2006 the company posted revenues of $193.1 million and after-tax net income of $14.8 Million. As of June 30, 2006 it carried Assets of $622 million and total operating liabilities of $340 million.

The company has the traditional range of risks listed in the prospectus for the company, including the equivalent comments that its real assets walk out the front door and go home every night. In truth, unless they have hidden and buried ghosts that aren't known this IPO will be well received. It is hard to call that before you start to see some price indications, so we will wait to see the financial details before we blindly go out with an open endorsement.

This is a financial IPO we are looking forward to.

Jon C.Ogg
September 28, 2006

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