SWS (SWS) 8-K Regulation FD Disclosure

Investor Presentation

September 2007

Exhibit 99.1

2

Forward-Looking Statements

This presentation may include forward-looking statements regarding the

company’s future overall performance.  The audience is cautioned that any

forward-looking statements, including those predicting or forecasting future

events or results, which depend on future events for their accuracy, embody

projections or assumptions, or express the intent, belief or current

expectations

of

the

company

or

management,

are

not

guarantees

of

future

performance

and

involve

risks

and

uncertainties.

Actual

results

may

differ

materially

as

a

result

of

various

factors,

some

of

which

are

out

of

our

control, including, but not limited to, those factors discussed in our Annual

Report on Form 10-K and in our other reports filed with and available from

the SEC.

3

Contents

•

Firm

History

4

•

Current

Market

Position

5

•

Business

Lines

&

Core

Focus

6

•

Financial

Trends

19

•

Ownership

23

4

Historical Context

•

Founded in Dallas in 1972

•

IPO in October 1991 (Nasdaq: SWST)

•

Listed on NYSE (SWS) in October 1997

•

Current management team in place since August 2002

•

Sale of on-line discount brokerage business

•

Elimination of technology company

•

Sale of Institutional sales and research units

5

Current Market Position

•

Largest brokerage firm headquartered in Texas

•

More capital than any other Texas-based broker

•

One of the largest clearing firms in the USA 

based on number of clients

•

One of the largest community banks in Dallas-

Fort Worth Metroplex

6

Lines of Business

•

Institutional Brokerage

•

Retail Brokerage

•

Clearing

•

Banking

7

Institutional Brokerage

•

Fixed Income

•

Stock Loan

•

Public Finance

•

Corporate Finance

•

Equity Trading and Execution Services

8

Institutional Brokerage Segment Results

(In thousands)

FY2005

FY2006

FY2007

Operating Revenue           67,406             67,203          

80,063

Net Interest Revenue        14,163             16,665          

21,556

Net Revenues                   81,569             83,868       

101,619

Pre-tax earnings from

continuing operations       21,484             22,472         

29,839

Pre-tax Margin

26.3%              26.8%     

29.4%

9

Impact of Retail Brokerage

•

Profitability

•

Corporate and Public Finance synergies

•

Value of customer relationships

10

Retail Brokerage

•

Private Client Group

•

Employee brokers

•

94 brokers*

•

FY2007 operating revenues of $32.9 million vs. $28.6 million in FY2006

•

SWS Financial Services

•

Independent contractor network

•

376 independent reps*

•

FY2007 operating revenues of $32.4 vs. $30.8 million FY2006

•

Total customer assets under management of $7.2 billion* versus $5.2

billion a year ago

*As of June 29, 2007

11

Retail Brokerage Segment Results

(In thousands)

FY2005

FY2006 

FY2007

Operating Revenues         56,825

63,160              69,579

Net Interest Revenue          5,759               6,685        

7,136

Net Revenues                   62,584             69,845       

76,715

Pre-tax earnings from

continuing operations         2,268               9,607        

13,015

Pre-tax Margin                    3.6%             13.8%           

17.0%

12

Clearing

•

Operating leverage

•

209 clearing correspondents*

•

Mostly general securities clearing with some day-trading

•

Two primary avenues of growth (organic growth &

acquisition)

*As of June 29, 2007

13

Clearing Segment Results

(In thousands)

FY2005

FY2006

FY2007

Operating Revenue            22,250

24,033               22,056

Net Interest Revenue         13,866            13,455          

16,621

Net Revenues                    36,116            37,488       

38,677

Pre-tax earnings from

continuing operations        14,971            16,462       

19,950

Pre-tax Margin                   41.5%             43.9%           

51.6%

Correspondents                      224                  218

209               

14

The Bank

•

Acquired in April 2000

•

Bank insured product.  $730 million* in customer balances

comprising over 75% of the bank’s deposits.

•

Primary focus on attracting business development-oriented

bankers

*As of June 29, 2007

15

Average Bank Loans by Type

6/30/07

3/31/07

% Chg

6/30/06

%Chg

Purchased single-family

loans held for sale

$

132.4

$

99.0

33.7%

$

116.4

13.7%

Single-family interim loans

235.1

229.5

2.4

202.2

16.3

Single-family lot and

development loans

140.1

134.5

4.2

109.0

28.5

Commercial real estate

240.3

227.4

5.7

197.5

21.7

Single-family and multi-

family permanent loans         

57.3

59.0

(2.9)

56.4     

1.6

Consumer loans

6.1

6.4

(4.7)

6.3

(3.2)

Commercial loans

78.4

74.4

5.4

67.6

16.0

Loan loss reserves

(5.5)

(5.5)

--

(5.1)

7.8

$

884.2

$

824.7

7.2%

$

750.3

17.8%

Quarter Ended

(Dollars in Millions)

16

Loan Quality

Jun ’07 QTR

Mar ’07 QTR

Dec ’06 QTR

Sep ’06 QTR

Non performing Loans*

$19,169

$9,529        

$8,809            $7,682

Percentage

of

total

loans

2.1%

1.0%

1.0%

0.9%

Allowance for Loan Losses                

5,497

5,497

5,497

5,347

Net

Charge-offs

(recoveries)

0

(63)

271

(6)

Net Charge-offs/(recoveries)

(as a % of avg. loans)

0.00%

(0.01%)               0.03%         (0.00%)

*Non performing loans include those accounted for on a non-accrual basis and those that are 90 or

more days past due.

Note -

Above totals apply to continuing operations only.

Quarter Ended

(Dollars in Thousands)

17

Sub-Prime

•

Portfolio Loans

•

Seasoned (5+ years)

•

$3.0 million*

•

Warehouse –

Purchased loans held for sale

•

Mortgage brokers     SWS-FSB      Committed investor

•

30 day life

*As of June 30, 2007

18

Banking Segment Results

(In thousands)

FY2005                 FY2006       

FY2007

Operating Revenue             3,156               2,673        

3,135

Net Interest Revenue        30,682             42,075          

47,971   

Net Revenues                   33,838             44,748       

51,106

Pre-tax earnings from

continuing operations       14,224             20,271          

25,235

Pre-tax Margin                  42.0%              45.3%           

49.4%

Net Interest Margin             5.3%               5.7%        

5.2%

19

Segment Results -

Summary

(In thousands)

Net Revenues

Pre-tax Income

FY2006          FY2007  

4Q-FY2007

FY2006           FY2007

4Q-FY2007

Clearing

$37,488

$38,677

$10,215

$16,462

$19,950

$5,502

Retail

Brokerage

69,845

76,715

19,670

9,607

13,015

3,450

Institutional

Brokerage

83,868

101,619

23,489

22,472

29,839

5,407

Bank

44,748

51,106

13,546

20,271

25,235

6,539

Other

Consolidated

Entities

16,995

5,498

(1,457)

(24,791)

(31,826)

(9,985)

Consolidated

$252,944

$273,615

$65,463

$44,021

$56,213

$10,913

20

Expense Reduction

Note –

The NYSE/SEC fine of $10 million, pre-tax ($9.3 million after-tax) has been excluded

from non-comp. operating expenses for fiscal year 2004. 

Non-Comp. Operating Expenses

55

60

65

70

75

80

85

2004

2005

2006

2007

Fiscal Year

Net Revenues

230

245

260

275

2004

2005

2006

2007

Fiscal Year

21

Non-GAAP Financial Information

SWS has presented income from continuing operations and return on equity

excluding the gain on sale of Mydiscountbroker.com accounts for the fiscal year

ended June 27, 2003, the SEC fine for the fiscal year ended June

25, 2004, the

maturity of the DARTS

SM

for the fiscal year ended June 24, 2005, the gain on the

conversion of the firm’s NYSE seat for the fiscal year ended June 30, 2006, as well

as the market to market on that position and the gain on insurance proceeds for the

fiscal year ended June 29, 2007.  SWS believes that these presentations are useful to

investors because they are more indicative of SWS’

income from ongoing operations

and return on equity.  Management has provided this information to assist the reader

in understanding the impact of the large gain recognized upon the sale of

Mydiscountbroker.com accounts in June of 2003, the gain when the

DARTS

SM

matured June 30, 2004, the impact of the SEC fine that was settled in January 2005,

and the NYSE seat conversion during the fiscal year ended June 30, 2006, as well as

the impact of NYX and the gain on insurance proceeds during the fiscal year ended

June 29, 2007. While management believes these non-GAAP financial measures are

useful in evaluating SWS, this information should be considered as supplemental in

nature and not as a substitute for or superior to the related financial information

prepared in accordance with GAAP.

22

Fiscal year

ended 6/27/03

Fiscal year

ended 6/25/04

Income

from

continuing

ops.

$

242

($

190)

$

28,082

$28,637

$37,507

Gain

on

MDB,

after-tax

(2,730)

--

--

--

--

SEC

Fine,

after-tax

--

9,300

--

--

--

Maturation

of

DARTS,

after-tax

--

--

(12,176)

--

--

Impact

of

NYX,

after

tax

--

--

--

(3,355)

(758)

Gain

from

Insurance

Proceeds

--

--

--

--

(2,289)

Adjusted

Operating

Income*

(2,488)

9,110

15,906

25,282

34,460

Adjusted

ROE

(1.0%)

3.6%

6.3%

9.5%

11.9%

*Note -

The above presentation does not conform to generally accepted accounting principles as noted on the

preceding slide. 

(In Thousands)

Adjusted Operating Income

Fiscal year

ended 6/24/05

Fiscal year

ended 06/30/06

Fiscal year

ended 06/29/07

23

Ownership

•

Officers and Directors –

3.5 million shares (13%)*

•

Institutions –

25.4 million shares (93%)**

•

Shorts –

(3.0) million shares (11%) per the NYSE

as of 8/15/2007.

*Shares

beneficially

owned

per

Proxy

(DEFR

14A)

filed

10/25/2006

(adjusted

for

3-for-2

stock split declared on November 30, 2006).

**Taken from SNL Financial as of the close of business 8/31/2007.