SWS Announces Financial Results for March Quarter;

      Net Income Totals $1 Million on Revenues of $77.5 million  
  DALLAS, April 25 /PRNewswire-FirstCall/ -- SWS Group, Inc. (NYSE: SWS) 
today announced earnings of $1.05 million, or diluted earnings per share (EPS) 
of 6 cents, on revenues of $77.5 million for its third fiscal quarter ended 
March 28, 2002.  In the same quarter a year ago, SWS earned $3.6 million, or 
diluted EPS of 20 cents, on revenues of $110.9 million.  
"We believe the trend in our businesses reversed direction this quarter, 
and that we're seeing the start of an upward cycle," said SWS Chairman and CEO 
Don A. Buchholz.  "We can see a number of positive developments on the 
Mr. Buchholz said the conversion to SWS Securities' CSS clearing platform 
of the 166,000 accounts acquired last year in a SIPC proceeding went smoothly. 
Until the conversion in early April, this business had been cleared through 
another subsidiary using a service bureau and independent contractors in 
Minneapolis.  The transition to SWS Securities added 47 correspondents and 
$12 billion in assets to SWS Securities and will result in a significant 
reduction in expenses.  
"This was a major milestone," Mr. Buchholz said.  He noted that a national 
accounting and consulting firm has been retained to certify the readiness of 
the CSS software system and added that the company is now processing more than 
99 percent of its daily work on the new system.  
Mr. Buchholz said that in addition to the expense reduction program the 
company has implemented over the past few quarters and the expected savings 
from more efficient clearing operations, a number of business units appear to 
have begun an upward trend in the past two months.  He said Equity Trading, 
for example, began the quarter with losses but produced a pre-tax profit in 
the final month.  Fixed Income sales and trading had a good quarter, as did 
Institutional Sales, Public Finance and First Savings Bank.  
"We think the news is that we've bottomed out and are on the way back up," 
Mr. Buchholz said.  "If we can continue to improve customer service, we think 
the growth in our clearing business will accelerate, and we are working very 
hard to improve customer service in every area of our business.  This is the 
company's Number 1 priority."  
SWS is moving ahead with plans to spin-off its Westwood Holdings Group, 
Inc. subsidiary as a separate public company.  Mr. Buchholz said SWS and 
Westwood are awaiting SEC comments on Westwood's Form 10 filing and hope to be 
able to announce record and distribution dates for the spin-off soon.  SWS 
shareholders will receive one share of Westwood common stock for every four 
shares of SWS common stock held as of the yet-to-be-determined record date. 
The spin-off will not change the number of SWS Group common shares that a 
stockholder owns.  Westwood, principally engaged in asset management, plans to 
list its stock on the New York Stock Exchange under the symbol, WHG.  
During the quarter, SWS sold 100,000 shares of its investment in 
Knight Trading Group, Inc. (Nasdaq: NITE), recording cash gains of $697,000 
and non-cash gains of $3.6 million on the sale.  SWS held 480,000 shares of 
NITE at quarter's end.  There were four fewer trading days in the March 
quarter than in the December quarter and three fewer than in the prior year's 
March quarter.  
For the nine-month period, SWS earned $4.8 million, or diluted EPS of 
28 cents, on revenues of $255.9 million, compared with net income of 
$14.1 million, or diluted EPS of 80 cents, on revenues of $368.1 million in 
the same period of the prior fiscal year.  For the nine-month period, NITE 
sales resulted in cash gains of $4.4 million and non-cash gains of 
$15.5 million.  
Fiscal-year-to-date transactions processed by SWS Securities, Inc. totaled 
42.1 million compared with 45.8 million in the prior year period.  Tangible 
book value per share was $16.29 compared with $17.07 a year ago.  
SWS Group, Inc. is a Dallas-based holding company that offers a broad 
range of investment and financial services through its subsidiaries.  The 
company's common stock is listed and traded on the New York Stock Exchange 
under the symbol SWS.  SWS Group, Inc. subsidiaries include SWS Securities, 
Inc., Mydiscountbroker.com, First Savings Bank and its online division 
MyBankUSA.com, SWS Financial Services, Inc., Southwest Clearing Corp., 
Westwood Holdings Group, Inc. (including Westwood Management Corporation and 
Westwood Trust), SWS Capital Corporation, May Financial Corporation and SWS 
Technologies Corporation.  
  This news release contains forward-looking statements within the meaning 
of the Private Securities Litigation Reform Act of 1995.  Investors are 
cautioned that any forward-looking statements, including those regarding 
intent, belief or current expectations of the company or its management, are 
not guarantees of future performance and involve risks and uncertainties. 
Actual results may differ materially from those in the forward-looking 
statements as a result of various factors.  Such factors include, but are not 
limited to, general economic conditions and competitive pressures in the 
markets in which the company operates, regulatory changes, one-time events and 
other risks detailed from time to time in the company's Securities and 
Exchange Commission filings.  

                           SWS GROUP, INC. AND SUBSIDIARIES 
                  Consolidated Statements of Financial Condition 
                       March 28, 2002 and June 29, 2001 
             (In thousands, except par values and share amounts) 
                                                     March             June 
    Cash                                             $21,346        $31,224 
    Assets segregated for regulatory purposes        439,733        362,071 
    Marketable equity securities available for sale    5,220          9,687 
    Receivable from brokers, dealers and 
     clearing organizations                        1,952,408      2,221,253 
    Receivable from clients, net                     592,908        437,620 
    Loans held for sale, net                         118,007        155,025 
    Loans, net                                       348,826        319,949 
    Securities owned, at market value                116,834        146,074 
    Other assets                                     105,832        101,854 
      Total assets                                $3,701,114     $3,784,757 
                Liabilities and Stockholders' Equity 
    Short-term borrowings                           $169,050           $--- 
    Payable to brokers, dealers and 
     clearing organizations                        1,909,599      2,233,207 
    Payable to clients                               760,842        657,955 
    Deposits                                         291,147        336,281 
    Securities sold, not yet purchased, 
     at market value                                  19,994         28,650 
    Drafts payable                                    29,941         29,620 
    Advances from Federal Home Loan Bank             155,400        113,477 
    Other liabilities                                 66,219         74,831 
    Exchangeable subordinated notes                    7,473          8,568 
      Total liabilities                            3,409,665      3,482,589 
      Minority interest in consolidated subsidiaries     1,779          2,729 
      Stockholders' equity: 
      Preferred stock of $1.00 par value. 
        Authorized 100,000 shares; none issued           ---            --- 
      Common stock of $.10 par value. 
       Authorized 60,000,000 shares, issued 
       17,588,027 and outstanding 17,230,566 
       shares at March 28, 2002; issued 
       17,509,771 and outstanding 17,247,914 
       shares at June 29, 2001                         1,758          1,751 
      Additional paid-in capital                     257,475        252,225 
      Retained earnings                               20,559         21,269 
      Accumulated other comprehensive 
       income - unrealized holding gain, 
       net of tax                                     15,024        27,997 
      Deferred compensation, net                       1,434         1,141 
    Treasury stock (357,461 shares at 
     March 28, 2002 and 261,857 shares at 
     June 29, 2001, at cost)                          (6,580)       (4,944) 
    Total stockholders' equity                       289,670       299,439 
    Commitments and contingencies 
      Total liabilities and stockholders' equity  $3,701,114    $3,784,757 
                           SWS GROUP, INC. AND SUBSIDIARIES 
        Consolidated Statements of Income and Comprehensive Income (Loss) 
    For the three and nine months ended March 28, 2002 and March 30, 2001 
              (In thousands, except per share and share amounts) 
                                       For the                    For the 
                                   three months               nine months 
                                       ended                     ended 
                                fiscal       fiscal       fiscal       fiscal 
                                 2002         2001         2002         2001 
      Net revenues from 
     clearing operations        $8,247      $11,974      $24,931      $39,560 
    Commissions                 19,477       16,960       55,597       48,129 
    Interest                    26,996       58,093       98,530      202,158 
    Investment banking, 
     advisory and 
     administrative fees        10,352        8,722       30,651       26,467 
    Net gains on principal 
     transactions                8,968       11,829       34,047       32,264 
    Other                        3,479        3,370       12,118       19,518 
      Total revenue             77,519      110,948      255,874      368,096 
      Commissions and other 
     employee compensation      32,554       36,766      103,473      110,721 
    Interest                    12,748       39,963       54,499      140,755 
    Occupancy, equipment and 
     computer service costs     12,456        8,973       35,474       25,430 
    Communications               5,226        4,290       14,482       11,800 
    Floor brokerage and 
     clearing organization 
     charges                     2,225        1,715        6,159        5,006 
    Advertising and promotional  1,065        4,184        6,749       11,926 
    Other                        8,850        9,277       25,150       34,154 
      Total expense             75,124      105,168      245,986      339,792 
      Income before income 
     taxes and minority 
     interest in consolidated 
     subsidiaries                2,395        5,780        9,888       28,304 
    Income taxes                   920        1,874        4,782        9,366 
      Income before 
     minority interest 
     in consolidated 
     subsidiaries                1,475        3,906        5,106       18,938 
    Minority interest 
     in consolidated 
     subsidiaries                 (428)        (349)        (352)      (1,934) 
      Income before cumulative 
     effect of a change 
     in accounting principle     1,047        3,557        4,754       17,004 
    Cumulative effect 
     of a change in 
     accounting principle, 
     net of tax                    ---          ---          ---       (2,874) 
      Net income                   1,047        3,557        4,754       14,130 
    Net income (loss) 
     recognized in other 
     comprehensive income 
     (loss), net of tax         (3,343)      (1,914)     (12,972)       3,882 
      Comprehensive income 
     (loss)                    $(2,296)      $1,643      $(8,218)     $18,012 
      Earnings per share - basic 
      Income before cumulative 
       effect of a change in 
       accounting principle       $.06         $.20         $.28         $.97 
      Cumulative effect 
       of a change in 
       accounting principle, 
       net of tax                  ---          ---          ---         (.16) 
      Net income                  $.06         $.20         $.28         $.81 
      Weighted average 
       shares outstanding 
       - basic              17,225,307   17,479,065   17,208,497   17,478,261 
      Earnings per share - diluted 
      Income before cumulative 
       effect of a change in 
       accounting principle       $.06         $.20         $.28         $.96 
      Cumulative effect 
       of a change in 
       accounting principle, 
       net of tax                  ---          ---          ---         (.16) 
      Net income                  $.06         $.20         $.28         $.80 
      Weighted average 
       shares outstanding 
       - diluted            17,312,879   17,553,818   17,276,365   17,582,891 
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SOURCE  SWS Group, Inc.  
-0-                             04/25/2002  
/NOTE TO EDITORS:  A Company background is available upon request.  Please 
call the contact./  
/CONTACT:  Jim Bowman, Vice President - Corporate Communications of SWS 
Group, Inc., +1-214-859-9335, or jbowman@swst.com /  

    /Company News On-Call:  http://www.prnewswire.com/comp/118977.html / 
    /Web site:  http://www.southwestsecurities.com / 

CO:  SWS Group, Inc.; Knight Trading Group, Inc. 
ST:  Texas 
SU:  ERN  
-0- Apr/25/2002 10:30 GMT
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