Updated from 7:01 a.m.

This is the year of the boutique investment bank IPO.

To date, at least a half-dozen boutique investment firms have filed for initial public offerings, with those deals producing mixed results. The latest firm to try its hand at selling shares is Keefe Bruyette & Woods, which priced its IPO Wednesday evening at $21 a share.

And so far, the stock has been a smashing success. In early morning trading, the stock was up nearly 24%, trading around $26 a share.

The 430-employee investment bank -- which focuses on financial services firms -- upped the ante heading into its first day of trading. The New York-based firm sold an additional 278,000 shares, bringing the total offering to 6.8 million. The deal raised about $143 million.

The increased size of the deal, which priced at the top of the projected range, is an indication that Wall Street institutional investors are bullish on Keefe Bruyette. In many ways, it's a good time for Keefe to go public, given the big bucks that investment firms are raking in from advising on corporate deals.

"The deal has attracted a lot of interest," says Sal Morreale, an institutional sales trader at Cantor Fitzgerald, who specializes in IPO trading. "The deal is in very good shape. The road-show meetings went extremely well."

In the deal, Keefe Bruyette itself is selling 3.9 million shares, while the firm's executives, directors and other shareholders sold 2.9 million shares. The firm's net proceeds will be about $82 million.

The firm had said it could price shares anywhere from $19 to $21 a share in the weeks leading up to the initial public offering.

Keefe Bruyette, with 30.6 million shares outstanding, will begin trading Thursday with a market cap of more than $642 million. It will trade on the New York Stock Exchange under the symbol KBW. The firm is underwriting its own IPO, along with Merrill Lynch ( MER) and Bank of America ( BAC) as additional lead underwriters.

But it's by no means certain that Wall Street's initial enthusiasm for Keefe Bruyette will continue in the aftermarket.

David Menlow, president of IPO Financial Network, says investors could turn their noses at Keefe Bruyette, since so many boutique firms already have gone public this year.

"At some point investors say, 'We have enough representation in this sector. Why do we need another one?'" Menlow says. "Keefe Bruyette has been growing, but not at a rate that would make people believe that is an extremely robust company."

At the end of the second quarter, Keefe Bruyette's profit nearly tripled from the year-earlier period, to $8.4 million. Revenue rose 29% to $91.7 million. Investment-banking fees, the largest revenue contributor, rose 24.3% to $45.8 million. The firm, however, has yet to release third quarter earnings.

Shares of boutique banks, despite all the IPO activity, have performed with mixed success this year.

Although Evercore Partners ( EVR - Get Report) and Thomas Weisel ( TWPG) shone on their first days of trading, shares of Cowen ( COWN - Get Report) disappointed investors when they priced below their anticipated range in July.

Ryan Beck, the Florham Park, N.J., investment bank of BankAtlantic Bancorp ( BBX - Get Report) and a direct competitor to Keefe Bruyette, postponed its IPO after Cowen's public offering was not well received. Additionally, Thomas Weisel's stock struggled soon after its debut. But the stock of the San Francisco-based firm recently has recovered from its summer swoon.

In October, Merrill Lynch snapped up investment bank Petrie Parkman, just a month after the Denver firm filed for an IPO. Terms of the deal were not disclosed. Some on Wall Street believe Petrie Parkman filed for an IPO mainly to raise its profile and attract bids from potential suitors.

For Keefe Bruyette, going public is no mere publicity stunt. The firm has long dreamed of going public, but its path to an IPO has been marked by a number of setbacks.

Most notably, the firm, which used to be housed in the World Trade Center, lost 67 of its employees in the Sept. 11, 2001, terrorist attacks. Many doubted whether it could rebuild itself. But Keefe Bruyette now employs nearly twice as many people as it did before the terror attack.

Years before those attacks, Keefe Bruyette was gearing up for its first try at an IPO. But the offering was canceled in 1999, shortly before the firm's then-CEO, James McDermott, was charged with giving his girlfriend, a former porn star, insider trading tips.

The firm would not comment beyond its IPO prospectus.

On a valuation basis, shares of Keefe Bruyette will begin grading at a slight discount to two merger-and-acquisition boutiques, but at a significant premium to Thomas Weisel and Cowen. Based on the $21 a share price, the stock trades at a price-to-earnings multiple of 21.6 times trailing earnings.

By comparison, shares of Greenhill ( GHC - Get Report) trade at a trailing P/E of 26.7. Evercore's stock, on the basis of future earnings, trades at multiple of 25.8. Thomas Weisel has a trailing P/E ratio of 17.4 times, while Cowen's P/E ratio is just 4.9 times.

This may be the best time for boutique investment banks, which are stealing market share from larger bulge-bracket firms, particularly in doling out M&A advice. Investment bank Putnam Lovell, citing data from Thomson Financial, says boutique advisers captured 31% of the total M&A deals in 2005, compared with just 11% in 2000.

"Keefe is a unique property," says Steve Pierson, head of investment banking at Putnam Lovell. Investing in the firm is "really a play in further bank consolidation, which is going to continue."