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SECURITIES AND EXCHANGE COMMISSION

As filed with the Securities and Exchange Commission on October 27, 2017

Date: October 27, 2017

By: /s/ Jeffrey J. Alfano
---------------------------------
Jeffrey J. Alfano
Chief Financial Officer
(Duly Authorized Officer)
Summary Operating Results (Unaudited)
('000s, except Per Share Amounts)
For the 3-Months EndedFor the 9-Months Ended
9/30/20179/30/2016% Change9/30/20179/30/2016% Change
Revenue$226,220
$211,804
6.8
$655,365
$638,834
2.6
Expenses214,392
213,614
0.4
652,199
653,230
(0.2)
Income (Loss) Before Income Taxes from Continuing Operations11,828
(1,810)*
3,166
(14,396)*
Income Taxes4,425
(751)*
2,464
(7,190)*
Net Income (Loss) from Continuing Operations7,403
(1,059)*
702
(7,206)*
Net Income from Discontinued Operations461
413
11.6
1,101
9,362
(88.2)
Net Income (Loss )7,864
(646)*
1,803
2,156
(16.4)
Less Net Income Attributable to Non-Controlling Interest, Net of Tax75
66
13.6
180
1,527
(88.2)
Net Income (Loss) Attributable to Oppenheimer Holdings Inc.$7,789
$(712)*
$1,623
$629
158.0
Basic Net Income (Loss) Per Share (1)
Continuing Operations$0.56
$(0.08)*
$0.05
$(0.54)*
Discontinued Operations0.03
0.03

0.07
0.59
(88.1)
Net Income (Loss) Per Share$0.59
$(0.05)*
$0.12
$0.05
140.0
Diluted Net Income (Loss) Per Share (1)
Continuing Operations$0.54
$(0.08)*
$0.05
$(0.54)(109.3)
Discontinued Operations0.03
0.03

0.07
0.59
(88.1)
Net Income (Loss) Per Share$0.57
$(0.05)*
$0.12
$0.05
140.0
Weighted Average Number of Common Shares Outstanding
Basic13,213
13,367
(1.2)13,290
13,371
(0.6)
Diluted13,764
13,367
3.0
13,790
13,371
3.1
As ofAs of
9/30/20179/30/2016% Change9/30/201712/31/2016% Change
Book Value Per Share$38.48
$38.41
0.2
$38.48
$38.22
0.7
Tangible Book Value Per Share$25.54
$25.73
(0.7)$25.54
$25.53

*Percentage not meaningful.
(1)Attributable to Oppenheimer Holdings Inc.
Commission revenue was $77.6 million for the third quarter of 2017, a decrease of 13.8% compared with $90.0 million for the third quarter of 2016 due to reduced transaction volumes from retail and institutional investors and a lower financial adviser headcount during the third quarter of 2017.
Advisory fees were $74.3 million for the third quarter of 2017, an increase of 10.2% compared with $67.5 million for the third quarter of 2016 due to a higher level of client assets under management.
Investment banking revenue increased 18.0% to $23.9 million for the third quarter of 2017 compared with $20.3 million for the third quarter of 2016 due to higher equity and debt underwriting fees partially offset by lower merger and acquisition advisory fees during the third quarter of 2017.
Principal transactions revenue increased 4.3% to $5.1 million for the third quarter of 2017 compared with $4.9 million for the third quarter of 2016 due to higher income from fixed income trading during the third quarter of 2017.
Business Segment Results (Unaudited)
('000s)
For the 3-Months EndedFor the 9-Months Ended
9/30/20179/30/2016% Change9/30/20179/30/2016% Change
Revenue
Private Client (1)$147,428
$127,835
15.3
$425,069
$376,737
12.8
Asset Management (1)19,277
23,234
(17.0)57,247
68,978
(17.0)
Capital Markets58,808
60,703
(3.1)168,418
187,292
(10.1)
Corporate/Other707
32
2,109.4
4,631
5,827
(20.5)
226,220
211,804
6.8
655,365
638,834
2.6
Income (Loss) Before Income Taxes from Continuing Operations
Private Client(1)36,950
20,137
83.5
93,763
50,799
84.6
Asset Management(1)3,338
9,380
(64.4)11,130
21,851
(49.1)
Capital Markets(1,639)(1,103)48.6
(25,235)(3,856)554.4
Corporate/Other(26,821)(30,224)(11.3)(76,492)(83,190)(8.1)
$11,828
$(1,810)(753.5)$3,166
$(14,396)(122.0)
(1)Effective January 1, 2017, the allocation of advisory fees between Private Client and Asset Management changed from 77.5% and 22.5% to 90.0% and 10.0%, respectively.
Financial adviser headcount was 1,117 at the end of the third quarter of 2017, down from 1,177 at the end of the third quarter of 2016. The decline in financial adviser headcount since the third quarter of 2016 has resulted from the Company's attention to adviser productivity leading to attrition for less productive financial advisers. The decline in headcount also has been impacted by retirements and normal attrition.
Retail commissions were $48.1 million for the third quarter of 2017, a decrease of 11.6% from the third quarter of 2016 due to reduced transaction volumes from retail investors and a lower financial adviser headcount during the third quarter of 2017.
Advisory fee revenue on traditional and alternative managed products was $55.2 million for the third quarter of 2017, an increase of 22.1% from the third quarter of 2016 (see Asset Management below for further information). The increase in advisory fees was due to the increase in the value of client assets under management ("AUM") and the change in the allocation of advisory fees between the Private Client and Asset Management segments, effective January 1, 2017, which contributed to an increase of $5.6 million in revenue in the Private Client segment.
Fees earned on client cash deposits in the FDIC-insured bank deposit program were $21.1 million during the third quarter of 2017 versus $9.6 million for the third quarter of 2016. The increase was due primarily to higher short-term interest rates during the third quarter of 2017.
Advisory fee revenue on traditional and alternative managed products was $19.1 million for the third quarter of 2017, a decrease of 14.3% from the third quarter of 2016. Advisory fees are calculated based on the value of AUM at the end of the prior quarter which totaled $26.1 billion at June 30, 2017 ($24.3 billion at June 30, 2016) and are allocated to the Private Client and Asset Management business segments. Advisory fees decreased $5.6 million due to the change in the allocation of advisory fees between the Private Client and Asset Management segments which became effective January 1, 2017.
At September 30, 2017, AUM hit a record high of $27.2 billion, an increase of 10.6% compared with $24.6 billion at September 30, 2016. AUM at September 30, 2017 is the basis for advisory fee billings for the fourth quarter of 2017. The increase in AUM was comprised of asset appreciation of $1.7 billion and net contributions of assets of $0.9 billion.
Advisory fees from investment banking activities decreased 47.7% to $6.8 million in the third quarter of 2017 compared with the third quarter of 2016 due to lower fees earned on completed mergers and acquisitions transactions during the third quarter of 2017.
Equity underwriting fees increased 234.3% to $11.7 million for the third quarter of 2017 compared with the third quarter of 2016 due to the Company's increased focus on equity issuance and penetration in the healthcare and technology sectors leading to higher equity underwriting activity during the period.
Revenue from Taxable Fixed Income decreased 7.6% to $13.3 million for the third quarter of 2017 compared with the third quarter of 2016 due to low volatility which led to decreased institutional fixed income activity during the third quarter of 2017.
('000s)
For the 3-Months EndedFor the 9-Months Ended
9/30/20179/30/20169/30/20179/30/2016
Revenue
Interest$2
$112
$7
$921
Principal transactions, net
(2,380)
(9,008)
Other (1)783
4,073
1,887
31,547
Total revenue785
1,805
1,894
23,460
Expenses
Compensation and related expenses1
573
18
4,225
Communications and technology8
40
20
201
Occupancy and equipment costs
37

399
Interest7
28
7
408
Other
239
15
2,630
Total expenses16
917
60
7,863
Income before income taxes769
888
1,834
15,597
Income taxes308
475
733
6,235
Net income from discontinued operations$461
$413
$1,101
$9,362
(1)Other revenue for the three and nine months ended September 30, 2017 was primarily due to an earn-out from the sale of OMHHF's pipeline of business in 2016.
At September 30, 2017, book value per share was $38.48 (compared with $38.22 at December 31, 2016) and tangible book value per share was $25.54 (compared with $25.53 at December 31, 2016).
The Company's level 3 assets, primarily auction rate securities, were $107.0 million at September 30, 2017 (compared with $86.0 million at December 31, 2016). The increase in level 3 assets was primarily due to the purchase of auction rate securities during the nine-month period ended September 30, 2017 pursuant to regulatory and legal settlements.

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