|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
Delaware
|
98-0080034
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock
|
OPY
|
The New York Stock Exchange
|
Large accelerated filer
|
☐
|
|
Accelerated Filer
|
☒
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
|
|
Page No.
|
PART I
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
(Expressed in thousands, except number of shares and per share amounts)
|
June 30, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
51,237
|
|
|
$
|
79,550
|
|
Deposits with clearing organizations
|
90,536
|
|
|
48,415
|
|
||
Receivable from brokers, dealers and clearing organizations
|
315,947
|
|
|
163,293
|
|
||
Receivable from customers, net of allowance for credit losses of $493 ($451 in 2019)
|
860,140
|
|
|
796,934
|
|
||
Income tax receivable
|
1,789
|
|
|
5,170
|
|
||
Securities owned, including amounts pledged of $357,323 ($357,120 in 2019), at fair value
|
502,029
|
|
|
799,719
|
|
||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of$34,022 and $3,903 respectively ($38,355 and $3,673, respectively, in 2019)
|
44,114
|
|
|
43,670
|
|
||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $98,885 ($94,773 in 2019)
|
30,418
|
|
|
31,377
|
|
||
Right-of-use lease assets, net of accumulated amortization of $37,597 ($25,186 in 2019)
|
160,358
|
|
|
160,297
|
|
||
Goodwill
|
137,889
|
|
|
137,889
|
|
||
Intangible assets
|
32,100
|
|
|
32,100
|
|
||
Other assets
|
137,760
|
|
|
166,341
|
|
||
Total assets
|
$
|
2,364,317
|
|
|
$
|
2,464,755
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Drafts payable
|
$
|
37,374
|
|
|
$
|
—
|
|
Bank call loans
|
13,000
|
|
|
—
|
|
||
Payable to brokers, dealers and clearing organizations
|
216,111
|
|
|
520,975
|
|
||
Payable to customers
|
416,914
|
|
|
334,735
|
|
||
Securities sold under agreements to repurchase
|
154,155
|
|
|
287,265
|
|
||
Securities sold but not yet purchased, at fair value
|
356,589
|
|
|
100,571
|
|
||
Accrued compensation
|
146,988
|
|
|
207,358
|
|
||
Accounts payable and other liabilities
|
43,219
|
|
|
44,725
|
|
||
Lease liabilities
|
202,028
|
|
|
203,140
|
|
||
Senior secured notes, net of debt issuance costs of $384 ($485 in 2019)
|
148,190
|
|
|
149,515
|
|
||
Deferred tax liabilities, net of deferred tax assets of $38,404 ($43,630 in 2019)
|
28,612
|
|
|
23,749
|
|
||
Total liabilities
|
1,763,180
|
|
|
1,872,033
|
|
||
Commitments and contingencies (note 13)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Share capital
|
|
|
|
||||
Class A non-voting common stock, par value $0.001 per share, 50,000,000 shares authorized, 12,445,479 and 12,698,703 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
|
40,784
|
|
|
46,424
|
|
||
Class B voting common stock, par value $0.001 per share, 99,665 shares authorized, issued and outstanding as of June 30, 2020 and December 31, 2019
|
133
|
|
|
133
|
|
||
|
40,917
|
|
|
46,557
|
|
||
Contributed capital
|
39,140
|
|
|
47,406
|
|
||
Retained earnings
|
519,376
|
|
|
496,998
|
|
||
Accumulated other comprehensive income
|
1,704
|
|
|
1,761
|
|
||
Total stockholders' equity
|
601,137
|
|
|
592,722
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,364,317
|
|
|
$
|
2,464,755
|
|
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended
June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(Expressed in thousands, except number of shares and per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
REVENUE
|
|
|
|
|
|
|
|
||||||||
Commissions
|
$
|
101,636
|
|
|
$
|
80,896
|
|
|
$
|
204,885
|
|
|
$
|
160,305
|
|
Advisory fees
|
75,981
|
|
|
80,707
|
|
|
162,145
|
|
|
154,354
|
|
||||
Investment banking
|
46,186
|
|
|
32,006
|
|
|
71,914
|
|
|
60,049
|
|
||||
Bank deposit sweep income
|
7,122
|
|
|
31,830
|
|
|
25,948
|
|
|
65,798
|
|
||||
Interest
|
6,220
|
|
|
13,550
|
|
|
17,110
|
|
|
26,277
|
|
||||
Principal transactions, net
|
12,064
|
|
|
3,045
|
|
|
11,196
|
|
|
14,483
|
|
||||
Other
|
15,521
|
|
|
8,901
|
|
|
6,302
|
|
|
21,439
|
|
||||
Total revenue
|
264,730
|
|
|
250,935
|
|
|
499,500
|
|
|
502,705
|
|
||||
EXPENSES
|
|
|
|
|
|
|
|
||||||||
Compensation and related expenses
|
179,594
|
|
|
155,783
|
|
|
337,270
|
|
|
316,138
|
|
||||
Communications and technology
|
21,324
|
|
|
20,499
|
|
|
41,215
|
|
|
40,585
|
|
||||
Occupancy and equipment costs
|
15,334
|
|
|
15,573
|
|
|
31,412
|
|
|
30,846
|
|
||||
Clearing and exchange fees
|
6,191
|
|
|
5,678
|
|
|
11,850
|
|
|
11,010
|
|
||||
Interest
|
2,890
|
|
|
13,192
|
|
|
9,440
|
|
|
26,178
|
|
||||
Other
|
16,133
|
|
|
22,819
|
|
|
34,826
|
|
|
44,505
|
|
||||
Total expenses
|
241,466
|
|
|
233,544
|
|
|
466,013
|
|
|
469,262
|
|
||||
Pre-tax income
|
23,264
|
|
|
17,391
|
|
|
33,487
|
|
|
33,443
|
|
||||
Income taxes
|
5,615
|
|
|
5,016
|
|
|
8,020
|
|
|
9,874
|
|
||||
Net income
|
$
|
17,649
|
|
|
$
|
12,375
|
|
|
$
|
25,467
|
|
|
$
|
23,569
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.40
|
|
|
$
|
0.95
|
|
|
$
|
1.99
|
|
|
$
|
1.81
|
|
Diluted
|
$
|
1.34
|
|
|
$
|
0.89
|
|
|
$
|
1.92
|
|
|
$
|
1.70
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares
|
|
|
|
|
|
|
|
||||||||
Basic
|
12,640,463
|
|
|
12,976,235
|
|
|
12,768,096
|
|
|
12,998,168
|
|
||||
Diluted
|
13,124,655
|
|
|
13,861,753
|
|
|
13,269,494
|
|
|
13,857,616
|
|
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended
June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(Expressed in thousands)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income
|
$
|
17,649
|
|
|
$
|
12,375
|
|
|
$
|
25,467
|
|
|
$
|
23,569
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustment
|
480
|
|
|
361
|
|
|
(57
|
)
|
|
924
|
|
||||
Comprehensive income
|
$
|
18,129
|
|
|
$
|
12,736
|
|
|
$
|
25,410
|
|
|
$
|
24,493
|
|
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended
June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
(Expressed in thousands, except per share amounts)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Share capital
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
44,306
|
|
|
$
|
52,519
|
|
|
$
|
46,557
|
|
|
$
|
53,392
|
|
Issuance of Class A non-voting common stock
|
443
|
|
|
—
|
|
|
6,626
|
|
|
1,162
|
|
||||
Repurchase of Class A non-voting common stock for cancellation
|
(3,832
|
)
|
|
(4,317
|
)
|
|
(12,266
|
)
|
|
(6,352
|
)
|
||||
Balance at end of period
|
40,917
|
|
|
48,202
|
|
|
40,917
|
|
|
48,202
|
|
||||
Contributed capital
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
37,945
|
|
|
41,489
|
|
|
47,406
|
|
|
41,776
|
|
||||
Share-based expense
|
1,757
|
|
|
2,137
|
|
|
3,819
|
|
|
4,026
|
|
||||
Vested employee share plan awards
|
(562
|
)
|
|
—
|
|
|
(12,085
|
)
|
|
(2,176
|
)
|
||||
Balance at end of period
|
39,140
|
|
|
43,626
|
|
|
39,140
|
|
|
43,626
|
|
||||
Retained earnings
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
503,255
|
|
|
459,751
|
|
|
496,998
|
|
|
449,989
|
|
||||
Net income
|
17,649
|
|
|
12,375
|
|
|
25,467
|
|
|
23,569
|
|
||||
Dividends paid
|
(1,528
|
)
|
|
(1,433
|
)
|
|
(3,089
|
)
|
|
(2,865
|
)
|
||||
Balance at end of period
|
519,376
|
|
|
470,693
|
|
|
519,376
|
|
|
470,693
|
|
||||
Accumulated other comprehensive income
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
1,224
|
|
|
728
|
|
|
1,761
|
|
|
165
|
|
||||
Currency translation adjustment
|
480
|
|
|
361
|
|
|
(57
|
)
|
|
924
|
|
||||
Balance at end of period
|
1,704
|
|
|
1,089
|
|
|
1,704
|
|
|
1,089
|
|
||||
Total stockholders' equity
|
$
|
601,137
|
|
|
$
|
563,610
|
|
|
$
|
601,137
|
|
|
$
|
563,610
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends paid per share
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
(Expressed in thousands)
|
2020
|
|
2019
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
25,467
|
|
|
$
|
23,569
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Non-cash items included in net income:
|
|
|
|
||||
Depreciation and amortization of furniture, equipment and leasehold improvements
|
4,120
|
|
|
3,602
|
|
||
Deferred income taxes
|
4,853
|
|
|
1,081
|
|
||
Amortization of notes receivable
|
5,797
|
|
|
6,469
|
|
||
Amortization of debt issuance costs
|
97
|
|
|
129
|
|
||
Write-off of debt issuance costs
|
4
|
|
|
—
|
|
||
Provision for credit losses
|
(42
|
)
|
|
34
|
|
||
Share-based compensation
|
2,395
|
|
|
6,384
|
|
||
Amortization of right-of-use lease assets
|
12,411
|
|
|
12,892
|
|
||
Gain on repurchase of senior secured notes
|
(86
|
)
|
|
—
|
|
||
Decrease (increase) in operating assets:
|
|
|
|
||||
Deposits with clearing organizations
|
(42,121
|
)
|
|
2,187
|
|
||
Receivable from brokers, dealers and clearing organizations
|
(152,654
|
)
|
|
(1,438
|
)
|
||
Receivable from customers
|
(63,164
|
)
|
|
(86,838
|
)
|
||
Income tax receivable
|
3,381
|
|
|
1,014
|
|
||
Securities purchased under agreements to resell
|
—
|
|
|
251
|
|
||
Securities owned
|
297,690
|
|
|
(157,786
|
)
|
||
Notes receivable
|
(6,241
|
)
|
|
(5,824
|
)
|
||
Other assets
|
28,524
|
|
|
(19,359
|
)
|
||
Increase (decrease) in operating liabilities:
|
|
|
|
||||
Drafts payable
|
37,374
|
|
|
1,108
|
|
||
Payable to brokers, dealers and clearing organizations
|
(304,864
|
)
|
|
129,512
|
|
||
Payable to customers
|
82,179
|
|
|
(10,862
|
)
|
||
Income taxes payable
|
—
|
|
|
849
|
|
||
Securities sold under agreements to repurchase
|
(133,110
|
)
|
|
37,619
|
|
||
Securities sold but not yet purchased
|
256,018
|
|
|
70,533
|
|
||
Accrued compensation
|
(58,946
|
)
|
|
(38,827
|
)
|
||
Accounts payable and other liabilities
|
(14,995
|
)
|
|
(14,290
|
)
|
||
Cash used in operating activities
|
(15,913
|
)
|
|
(37,991
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchase of furniture, equipment and leasehold improvements
|
(3,161
|
)
|
|
(6,941
|
)
|
||
Proceeds from the settlement of Company-owned life insurance
|
—
|
|
|
695
|
|
||
Cash used in investing activities
|
(3,161
|
)
|
|
(6,246
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(3,089
|
)
|
|
(2,865
|
)
|
||
Repurchase of Class A non-voting common stock for cancellation
|
(12,266
|
)
|
|
(6,352
|
)
|
||
Payments for employee taxes withheld related to vested share-based awards
|
(5,458
|
)
|
|
(1,014
|
)
|
||
Repurchase of senior secured notes
|
(1,426
|
)
|
|
—
|
|
||
Increase in bank call loans, net
|
13,000
|
|
|
35,100
|
|
||
Cash used in (provided by) financing activities
|
(9,239
|
)
|
|
24,869
|
|
||
Net decrease in cash and cash equivalents
|
(28,313
|
)
|
|
(19,368
|
)
|
||
Cash and cash equivalents, beginning of period
|
79,550
|
|
|
90,675
|
|
||
Cash and cash equivalents, end of period
|
$
|
51,237
|
|
|
$
|
71,307
|
|
|
|
|
|
||||
Schedule of non-cash financing activities
|
|
|
|
||||
Employee share plan issuance
|
$
|
10,582
|
|
|
$
|
1,706
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
14,727
|
|
|
$
|
25,830
|
|
Cash paid during the period for income taxes, net
|
$
|
1,049
|
|
|
$
|
7,326
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
|
||
|
As of June 30, 2020
|
||
|
|
||
2020
|
$
|
—
|
|
2019
|
555
|
|
|
2018
|
186
|
|
|
2017
|
762
|
|
|
2016
|
875
|
|
|
2015 and prior
|
2,931
|
|
|
Total
|
$
|
5,309
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
|
As of
|
||
|
June 30, 2020
|
|
December 31, 2019
|
|
|
|
|
Weighted average remaining lease term (in years)
|
8.13
|
|
8.31
|
Weighted average discount rate
|
7.48%
|
|
7.89%
|
(Expressed in thousands)
|
|
|
|
||||
|
As of
|
||||||
|
June 30, 2020
|
|
December 31, 2019
|
||||
2020
|
$
|
21,171
|
|
|
$
|
42,585
|
|
2021
|
39,465
|
|
|
37,531
|
|
||
2022
|
35,476
|
|
|
33,416
|
|
||
2023
|
32,691
|
|
|
31,187
|
|
||
2024
|
28,604
|
|
|
27,234
|
|
||
After 2025
|
115,290
|
|
|
108,098
|
|
||
Total lease payments
|
$
|
272,697
|
|
|
$
|
280,051
|
|
Less interest
|
(70,669
|
)
|
|
(76,911
|
)
|
||
Present value of lease liabilities
|
$
|
202,028
|
|
|
$
|
203,140
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
For the Three Months Ended June 30, 2020
|
||||||||||||||||||
|
Reportable Segments
|
||||||||||||||||||
|
Private Client
|
|
Asset Management
|
|
Capital Markets
|
|
Corporate/Other
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions from sales and trading
|
$
|
41,805
|
|
|
$
|
—
|
|
|
$
|
51,337
|
|
|
$
|
—
|
|
|
$
|
93,142
|
|
Mutual fund income
|
8,490
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
8,495
|
|
|||||
Advisory fees
|
58,465
|
|
|
17,507
|
|
|
—
|
|
|
10
|
|
|
75,982
|
|
|||||
Investment banking - capital markets
|
3,470
|
|
|
—
|
|
|
35,472
|
|
|
—
|
|
|
38,942
|
|
|||||
Investment banking - advisory
|
—
|
|
|
—
|
|
|
7,244
|
|
|
—
|
|
|
7,244
|
|
|||||
Bank deposit sweep income
|
7,122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,122
|
|
|||||
Other
|
3,132
|
|
|
—
|
|
|
646
|
|
|
4
|
|
|
3,782
|
|
|||||
Total revenue from contracts with customers
|
122,484
|
|
|
17,507
|
|
|
94,701
|
|
|
17
|
|
|
234,709
|
|
|||||
Other sources of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
|
5,134
|
|
|
5
|
|
|
1,027
|
|
|
54
|
|
|
6,220
|
|
|||||
Principal transactions, net
|
2,656
|
|
|
—
|
|
|
9,512
|
|
|
(104
|
)
|
|
12,064
|
|
|||||
Other
|
11,551
|
|
|
3
|
|
|
30
|
|
|
153
|
|
|
11,737
|
|
|||||
Total other sources of revenue
|
19,341
|
|
|
8
|
|
|
10,569
|
|
|
103
|
|
|
30,021
|
|
|||||
Total revenue
|
$
|
141,825
|
|
|
$
|
17,515
|
|
|
$
|
105,270
|
|
|
$
|
120
|
|
|
$
|
264,730
|
|
(Expressed in thousands)
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||||
|
Reportable Segments
|
||||||||||||||||||
|
Private Client
|
|
Asset Management
|
|
Capital Markets
|
|
Corporate/Other
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions from sales and trading
|
$
|
37,026
|
|
|
$
|
—
|
|
|
$
|
33,736
|
|
|
$
|
4
|
|
|
$
|
70,766
|
|
Mutual fund income
|
10,124
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
10,130
|
|
|||||
Advisory fees
|
62,080
|
|
|
18,617
|
|
|
2
|
|
|
8
|
|
|
80,707
|
|
|||||
Investment banking - capital markets
|
4,262
|
|
|
—
|
|
|
14,699
|
|
|
—
|
|
|
18,961
|
|
|||||
Investment banking - advisory
|
—
|
|
|
—
|
|
|
13,045
|
|
|
—
|
|
|
13,045
|
|
|||||
Bank deposit sweep income
|
31,830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,830
|
|
|||||
Other
|
3,526
|
|
|
—
|
|
|
522
|
|
|
1,537
|
|
|
5,585
|
|
|||||
Total revenue from contracts with customers
|
148,848
|
|
|
18,618
|
|
|
62,005
|
|
|
1,553
|
|
|
231,024
|
|
|||||
Other sources of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
|
9,639
|
|
|
—
|
|
|
3,459
|
|
|
452
|
|
|
13,550
|
|
|||||
Principal transactions, net
|
538
|
|
|
—
|
|
|
6,312
|
|
|
(3,805
|
)
|
|
3,045
|
|
|||||
Other
|
2,903
|
|
|
4
|
|
|
43
|
|
|
366
|
|
|
3,316
|
|
|||||
Total other sources of revenue
|
13,080
|
|
|
4
|
|
|
9,814
|
|
|
(2,987
|
)
|
|
19,911
|
|
|||||
Total revenue
|
$
|
161,928
|
|
|
$
|
18,622
|
|
|
$
|
71,819
|
|
|
$
|
(1,434
|
)
|
|
$
|
250,935
|
|
(Expressed in thousands)
|
For the Six Months Ended June 30, 2020
|
||||||||||||||||||
|
Reportable Segments
|
||||||||||||||||||
|
Private Client
|
|
Asset Management
|
|
Capital Markets
|
|
Corporate/Other
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions from sales and trading
|
$
|
88,910
|
|
|
$
|
—
|
|
|
$
|
97,624
|
|
|
$
|
20
|
|
|
$
|
186,554
|
|
Mutual fund income
|
18,317
|
|
|
3
|
|
|
5
|
|
|
7
|
|
|
18,332
|
|
|||||
Advisory fees
|
125,348
|
|
|
36,777
|
|
|
2
|
|
|
19
|
|
|
162,146
|
|
|||||
Investment banking - capital markets
|
7,420
|
|
|
—
|
|
|
47,414
|
|
|
—
|
|
|
54,834
|
|
|||||
Investment banking - advisory
|
—
|
|
|
—
|
|
|
17,080
|
|
|
—
|
|
|
17,080
|
|
|||||
Bank deposit sweep income
|
25,948
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,948
|
|
|||||
Other
|
6,263
|
|
|
—
|
|
|
1,286
|
|
|
105
|
|
|
7,654
|
|
|||||
Total revenue from contracts with customers
|
272,206
|
|
|
36,780
|
|
|
163,411
|
|
|
151
|
|
|
472,548
|
|
|||||
Other sources of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
|
12,814
|
|
|
5
|
|
|
3,851
|
|
|
440
|
|
|
17,110
|
|
|||||
Principal transactions, net
|
(59
|
)
|
|
—
|
|
|
13,496
|
|
|
(2,241
|
)
|
|
11,196
|
|
|||||
Other
|
(1,718
|
)
|
|
6
|
|
|
54
|
|
|
304
|
|
|
(1,354
|
)
|
|||||
Total other sources of revenue
|
11,037
|
|
|
11
|
|
|
17,401
|
|
|
(1,497
|
)
|
|
26,952
|
|
|||||
Total revenue
|
$
|
283,243
|
|
|
$
|
36,791
|
|
|
$
|
180,812
|
|
|
$
|
(1,346
|
)
|
|
$
|
499,500
|
|
(Expressed in thousands)
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||||
|
Reportable Segments
|
||||||||||||||||||
|
Private Client
|
|
Asset Management
|
|
Capital Markets
|
|
Corporate/Other
|
|
Total
|
||||||||||
Revenue from contracts with customers:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions from sales and trading
|
$
|
74,502
|
|
|
$
|
—
|
|
|
$
|
66,052
|
|
|
$
|
7
|
|
|
$
|
140,561
|
|
Mutual fund income
|
19,738
|
|
|
(5
|
)
|
|
2
|
|
|
9
|
|
|
19,744
|
|
|||||
Advisory fees
|
119,124
|
|
|
35,206
|
|
|
7
|
|
|
17
|
|
|
154,354
|
|
|||||
Investment banking - capital markets
|
7,011
|
|
|
—
|
|
|
23,292
|
|
|
—
|
|
|
30,303
|
|
|||||
Investment banking - advisory
|
—
|
|
|
—
|
|
|
29,746
|
|
|
—
|
|
|
29,746
|
|
|||||
Bank deposit sweep income
|
65,798
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,798
|
|
|||||
Other
|
6,805
|
|
|
—
|
|
|
841
|
|
|
1,793
|
|
|
9,439
|
|
|||||
Total revenue from contracts with customers
|
292,978
|
|
|
35,201
|
|
|
119,940
|
|
|
1,826
|
|
|
449,945
|
|
|||||
Other sources of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest
|
19,047
|
|
|
—
|
|
|
6,294
|
|
|
936
|
|
|
26,277
|
|
|||||
Principal transactions, net
|
2,222
|
|
|
—
|
|
|
16,469
|
|
|
(4,208
|
)
|
|
14,483
|
|
|||||
Other
|
11,208
|
|
|
7
|
|
|
77
|
|
|
708
|
|
|
12,000
|
|
|||||
Total other sources of revenue
|
32,477
|
|
|
7
|
|
|
22,840
|
|
|
(2,564
|
)
|
|
52,760
|
|
|||||
Total revenue
|
$
|
325,455
|
|
|
$
|
35,208
|
|
|
$
|
142,780
|
|
|
$
|
(738
|
)
|
|
$
|
502,705
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
As of
|
||||||
|
June 30, 2020
|
|
December 31, 2019
|
||||
Contract assets (receivables):
|
|
|
|
||||
Commission (1)
|
$
|
3,519
|
|
|
$
|
2,824
|
|
Mutual fund income (2)
|
6,168
|
|
|
6,746
|
|
||
Advisory fees (3)
|
1,129
|
|
|
1,594
|
|
||
Bank deposit sweep income (4)
|
790
|
|
|
3,454
|
|
||
Investment banking fees (5)
|
13,592
|
|
|
9,284
|
|
||
Other
|
4,671
|
|
|
4,986
|
|
||
Total contract assets
|
$
|
29,869
|
|
|
$
|
28,888
|
|
Deferred revenue (payables):
|
|
|
|
||||
Investment banking fees (6)
|
$
|
659
|
|
|
$
|
408
|
|
IRA fees (7)
|
1,270
|
|
|
—
|
|
||
Total deferred revenue
|
$
|
1,929
|
|
|
$
|
408
|
|
(1)
|
Commission recorded on trade date but not yet settled.
|
(2)
|
Mutual fund income earned but not yet received.
|
(3)
|
Management and performance fees earned but not yet received.
|
(4)
|
Fees earned from FDIC-insured bank deposit program but not yet received.
|
(5)
|
Underwriting revenue and advisory fees earned but not yet received.
|
(6)
|
Retainer fees and fees earned from certain advisory transactions where the performance
|
(7)
|
Fee received in advance on an annual basis.
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
||||
|
Fair Value
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
|
|
Redemption
Notice Period
|
||||
Hedge funds (1)
|
$
|
1,089
|
|
|
$
|
—
|
|
|
Quarterly - Annually
|
|
30 - 120 Days
|
Private equity funds (2)
|
3,627
|
|
|
1,238
|
|
|
N/A
|
|
N/A
|
||
|
$
|
4,716
|
|
|
$
|
1,238
|
|
|
|
|
|
(1)
|
Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies.
|
(2)
|
Includes private equity funds and private equity fund of funds with a focus on diversified portfolios, real estate and global natural resources.
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
||||||||
|
Fair Value Measurements as of December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Deposits with clearing organizations
|
$
|
25,118
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,118
|
|
Securities owned:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
613,030
|
|
|
—
|
|
|
—
|
|
|
613,030
|
|
||||
U.S. Agency securities
|
19,917
|
|
|
15,974
|
|
|
—
|
|
|
35,891
|
|
||||
Sovereign obligations
|
—
|
|
|
11,405
|
|
|
—
|
|
|
11,405
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
8,310
|
|
|
—
|
|
|
8,310
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
2,697
|
|
|
—
|
|
|
2,697
|
|
||||
Municipal obligations
|
—
|
|
|
40,260
|
|
|
—
|
|
|
40,260
|
|
||||
Convertible bonds
|
—
|
|
|
29,816
|
|
|
—
|
|
|
29,816
|
|
||||
Corporate equities
|
32,215
|
|
|
—
|
|
|
—
|
|
|
32,215
|
|
||||
Money markets
|
781
|
|
|
—
|
|
|
—
|
|
|
781
|
|
||||
Auction rate securities
|
—
|
|
|
25,314
|
|
|
—
|
|
|
25,314
|
|
||||
Securities owned, at fair value
|
665,943
|
|
|
133,776
|
|
|
—
|
|
|
799,719
|
|
||||
Total
|
$
|
691,061
|
|
|
$
|
133,776
|
|
|
$
|
—
|
|
|
$
|
824,837
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased:
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
$
|
52,882
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,882
|
|
U.S. Agency securities
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||
Sovereign obligations
|
—
|
|
|
6,405
|
|
|
—
|
|
|
6,405
|
|
||||
Corporate debt and other obligations
|
—
|
|
|
664
|
|
|
—
|
|
|
664
|
|
||||
Mortgage and other asset-backed securities
|
—
|
|
|
18,624
|
|
|
—
|
|
|
18,624
|
|
||||
Corporate equities
|
21,978
|
|
|
—
|
|
|
—
|
|
|
21,978
|
|
||||
Securities sold but not yet purchased, at fair value
|
74,860
|
|
|
25,711
|
|
|
—
|
|
|
100,571
|
|
||||
Derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Futures
|
267
|
|
|
—
|
|
|
—
|
|
|
267
|
|
||||
TBAs
|
—
|
|
|
124
|
|
|
—
|
|
|
124
|
|
||||
ARS purchase commitments
|
—
|
|
|
1,023
|
|
|
—
|
|
|
1,023
|
|
||||
Derivative contracts, total
|
267
|
|
|
1,147
|
|
|
—
|
|
|
1,414
|
|
||||
Total
|
$
|
75,127
|
|
|
$
|
26,858
|
|
|
$
|
—
|
|
|
$
|
101,985
|
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Level 3 Assets and Liabilities
|
||||||||||||||||
|
|
For the Three Months Ended June 30, 2020
|
||||||||||||||||
|
|
|
|
Total Realized
|
|
|
|
|
|
|
|
|
||||||
|
|
Beginning
|
|
and Unrealized
|
|
Purchases
|
|
Sales and
|
|
Transfers
|
|
Ending
|
||||||
|
|
Balance
|
|
Gains
|
|
and Issuances
|
|
Settlements
|
|
In (Out)
|
|
Balance
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Auction rate securities (1) (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,566
|
|
|
29,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ARS Purchase Commitments (1) (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
332
|
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Level 3 Assets and Liabilities
|
||||||||||||||||
|
|
For the Three Months Ended June 30, 2019
|
||||||||||||||||
|
|
|
|
Total Realized
|
|
|
|
|
|
|
|
|
||||||
|
|
Beginning
|
|
and Unrealized
|
|
Purchases
|
|
Sales and
|
|
Transfers
|
|
Ending
|
||||||
|
|
Balance
|
|
Gains (3)(4)
|
|
and Issuances
|
|
Settlements
|
|
In (Out)
|
|
Balance
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Auction rate securities (1) (2)
|
21,700
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|
(21,350
|
)
|
|
—
|
|
|
Investments
|
104
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Level 3 Assets and Liabilities
|
||||||||||||||||
|
|
For the Six Months Ended June 30, 2020
|
||||||||||||||||
|
|
|
|
Total Realized
|
|
|
|
|
|
|
|
|
||||||
|
|
Beginning
|
|
and Unrealized
|
|
Purchases
|
|
Sales and
|
|
Transfers
|
|
Ending
|
||||||
|
|
Balance
|
|
Gains
|
|
and Issuances
|
|
Settlements
|
|
In (Out)
|
|
Balance
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Auction rate securities (1) (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,566
|
|
|
29,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ARS Purchase Commitments (1) (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
332
|
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Level 3 Assets and Liabilities
|
||||||||||||||||
|
|
For the Six Months Ended June 30, 2019
|
||||||||||||||||
|
|
|
|
Total Realized
|
|
|
|
|
|
|
|
|
||||||
|
|
Beginning
|
|
and Unrealized
|
|
Purchases
|
|
Sales and
|
|
Transfers
|
|
Ending
|
||||||
|
|
Balance
|
|
Gains(3)(4)
|
|
and Issuances
|
|
Settlements
|
|
In (Out)
|
|
Balance
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Auction rate securities (1) (2)
|
21,699
|
|
|
1
|
|
|
—
|
|
|
(350
|
)
|
|
(21,350
|
)
|
|
—
|
|
|
Investments
|
101
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Assets
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Cash
|
$
|
51,237
|
|
|
$
|
51,237
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,237
|
|
Deposits with clearing organization
|
55,411
|
|
|
55,411
|
|
|
—
|
|
|
—
|
|
|
55,411
|
|
|||||
Receivable from brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed
|
126,888
|
|
|
—
|
|
|
126,888
|
|
|
—
|
|
|
126,888
|
|
|||||
Receivables from brokers
|
28,119
|
|
|
—
|
|
|
28,119
|
|
|
—
|
|
|
28,119
|
|
|||||
Securities failed to deliver
|
24,717
|
|
|
—
|
|
|
24,717
|
|
|
—
|
|
|
24,717
|
|
|||||
Clearing organizations
|
31,361
|
|
|
—
|
|
|
31,361
|
|
|
—
|
|
|
31,361
|
|
|||||
Other
|
104,870
|
|
|
—
|
|
|
104,870
|
|
|
—
|
|
|
104,870
|
|
|||||
|
315,955
|
|
|
—
|
|
|
315,955
|
|
|
—
|
|
|
315,955
|
|
|||||
Receivable from customers
|
860,140
|
|
|
—
|
|
|
860,140
|
|
|
—
|
|
|
860,140
|
|
|||||
Notes receivable, net
|
44,114
|
|
|
—
|
|
|
44,114
|
|
|
—
|
|
|
44,114
|
|
|||||
Investments (1)
|
72,103
|
|
|
—
|
|
|
72,103
|
|
|
—
|
|
|
72,103
|
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Liabilities
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Drafts payable
|
$
|
37,374
|
|
|
$
|
37,374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,374
|
|
Bank call loans
|
13,000
|
|
|
—
|
|
|
13,000
|
|
|
—
|
|
|
13,000
|
|
|||||
Payables to brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities loaned
|
204,339
|
|
|
—
|
|
|
204,339
|
|
|
—
|
|
|
204,339
|
|
|||||
Payable to brokers
|
352
|
|
|
—
|
|
|
352
|
|
|
—
|
|
|
352
|
|
|||||
Securities failed to receive
|
11,528
|
|
|
—
|
|
|
11,528
|
|
|
—
|
|
|
11,528
|
|
|||||
Other
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
|||||
|
215,714
|
|
|
—
|
|
|
215,714
|
|
|
—
|
|
|
215,714
|
|
|||||
Payables to customers
|
416,914
|
|
|
—
|
|
|
416,914
|
|
|
—
|
|
|
416,914
|
|
|||||
Securities sold under agreements to repurchase
|
154,155
|
|
|
—
|
|
|
154,155
|
|
|
—
|
|
|
154,155
|
|
|||||
Senior secured notes
|
148,574
|
|
|
—
|
|
|
151,231
|
|
|
—
|
|
|
151,231
|
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Assets
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Cash
|
$
|
79,550
|
|
|
$
|
79,550
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,550
|
|
Deposits with clearing organization
|
23,297
|
|
|
23,297
|
|
|
—
|
|
|
—
|
|
|
23,297
|
|
|||||
Receivable from brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities borrowed
|
99,635
|
|
|
—
|
|
|
99,635
|
|
|
—
|
|
|
99,635
|
|
|||||
Receivables from brokers
|
19,024
|
|
|
—
|
|
|
19,024
|
|
|
—
|
|
|
19,024
|
|
|||||
Securities failed to deliver
|
7,173
|
|
|
—
|
|
|
7,173
|
|
|
—
|
|
|
7,173
|
|
|||||
Clearing organizations
|
36,269
|
|
|
—
|
|
|
36,269
|
|
|
—
|
|
|
36,269
|
|
|||||
Other
|
1,316
|
|
|
—
|
|
|
1,316
|
|
|
—
|
|
|
1,316
|
|
|||||
|
163,417
|
|
|
—
|
|
|
163,417
|
|
|
—
|
|
|
163,417
|
|
|||||
Receivable from customers
|
796,934
|
|
|
—
|
|
|
796,934
|
|
|
—
|
|
|
796,934
|
|
|||||
Notes receivable, net
|
43,670
|
|
|
—
|
|
|
43,670
|
|
|
—
|
|
|
43,670
|
|
|||||
Investments (1)
|
73,971
|
|
|
—
|
|
|
73,971
|
|
|
—
|
|
|
73,971
|
|
(Expressed in thousands)
|
|
|
Fair Value Measurement: Liabilities
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
Payables to brokers, dealers and clearing organizations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities loaned
|
$
|
234,343
|
|
|
$
|
—
|
|
|
$
|
234,343
|
|
|
$
|
—
|
|
|
$
|
234,343
|
|
Payable to brokers
|
4,548
|
|
|
—
|
|
|
4,548
|
|
|
—
|
|
|
4,548
|
|
|||||
Securities failed to receive
|
14,603
|
|
|
—
|
|
|
14,603
|
|
|
—
|
|
|
14,603
|
|
|||||
Other
|
267,214
|
|
|
—
|
|
|
267,214
|
|
|
—
|
|
|
267,214
|
|
|||||
|
520,708
|
|
|
—
|
|
|
520,708
|
|
|
—
|
|
|
520,708
|
|
|||||
Payables to customers
|
334,735
|
|
|
—
|
|
|
334,735
|
|
|
—
|
|
|
334,735
|
|
|||||
Securities sold under agreements to repurchase
|
287,265
|
|
|
—
|
|
|
287,265
|
|
|
—
|
|
|
287,265
|
|
|||||
Senior secured notes
|
150,000
|
|
|
—
|
|
|
154,988
|
|
|
—
|
|
|
154,988
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(1)
|
See "Derivative Instruments and Hedging Activities" above for description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements, thus the
|
(Expressed in thousands)
|
|
|
|
|
|
||||
|
Fair Value of Derivative Instruments as of December 31, 2019
|
||||||||
|
Description
|
|
Notional
|
|
Fair Value
|
||||
Liabilities:
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments (1)
|
|
|
|
|
|
||||
Commodity contracts
|
Futures
|
|
$
|
5,209,000
|
|
|
$
|
267
|
|
Other contracts
|
TBAs
|
|
13,245
|
|
|
124
|
|
||
|
ARS purchase commitments
|
|
7,128
|
|
|
1,023
|
|
||
|
|
|
$
|
5,229,373
|
|
|
$
|
1,414
|
|
(1)
|
See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements,
|
(Expressed in thousands)
|
|
|
|
|
|
|
||
|
|
The Effect of Derivative Instruments in the Income Statement
|
||||||
|
|
For the Three Months Ended June 30, 2020
|
||||||
|
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
|
Futures
|
|
Principal transactions revenue
|
|
$
|
(252
|
)
|
Other contracts
|
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
20
|
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
(2
|
)
|
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
555
|
|
|
|
|
|
|
|
|
$
|
321
|
|
|
|
|
|
|
|
|
||
(Expressed in thousands)
|
|
|
|
|
|
|
||
|
|
The Effect of Derivative Instruments in the Income Statement
|
||||||
|
|
For the Three Months Ended June 30, 2019
|
||||||
|
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
|
Futures
|
|
Principal transactions revenue
|
|
$
|
(2,090
|
)
|
Other contracts
|
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
(4
|
)
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
(86
|
)
|
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
350
|
|
|
|
|
|
|
|
|
$
|
(1,830
|
)
|
(Expressed in thousands)
|
|
|
|
|
|
|
||
|
|
The Effect of Derivative Instruments in the Income Statement
|
||||||
|
|
For the Six Months Ended June 30, 2020
|
||||||
|
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
|
Futures
|
|
Principal transactions revenue
|
|
$
|
(8,346
|
)
|
Other contracts
|
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
22
|
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
(14
|
)
|
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
691
|
|
|
|
|
|
|
|
|
$
|
(7,647
|
)
|
|
|
|
|
|
|
|
||
(Expressed in thousands)
|
|
|
|
|
|
|
||
|
|
The Effect of Derivative Instruments in the Income Statement
|
||||||
|
|
For the Six Months Ended June 30, 2019
|
||||||
|
|
|
|
Recognized in Income on Derivatives
(pre-tax)
|
||||
Types
|
|
Description
|
|
Location
|
|
Net Gain (Loss)
|
||
Commodity contracts
|
|
Futures
|
|
Principal transactions revenue
|
|
$
|
(2,666
|
)
|
Other contracts
|
|
Foreign exchange forward contracts
|
|
Other revenue
|
|
(6
|
)
|
|
|
|
TBAs
|
|
Principal transactions revenue
|
|
(76
|
)
|
|
|
|
ARS purchase commitments
|
|
Principal transactions revenue
|
|
332
|
|
|
|
|
|
|
|
|
$
|
(2,416
|
)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
As of June 30, 2020
|
|||||||||||||||||||||||
(Expressed in thousands)
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Assets
|
|
Gross
Amounts
Offset on the
Balance Sheet
|
|
Net Amounts
of Assets
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Received
|
|
Net Amount
|
||||||||||||
Reverse repurchase agreements
|
$
|
227,850
|
|
|
$
|
(227,850
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities borrowed (1)
|
126,888
|
|
|
—
|
|
|
126,888
|
|
|
(123,282
|
)
|
|
—
|
|
|
3,606
|
|
||||||
Total
|
$
|
354,738
|
|
|
$
|
(227,850
|
)
|
|
$
|
126,888
|
|
|
$
|
(123,282
|
)
|
|
$
|
—
|
|
|
$
|
3,606
|
|
(1)
|
Included in receivable from brokers, dealers and clearing organizations on the condensed consolidated balance sheet.
|
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
|
Gross
Amounts
Offset on the Balance Sheet
|
|
Net Amounts
of Liabilities
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Pledged
|
|
Net Amount
|
||||||||||||
Repurchase agreements
|
$
|
382,005
|
|
|
$
|
(227,850
|
)
|
|
$
|
154,155
|
|
|
$
|
(153,701
|
)
|
|
$
|
—
|
|
|
$
|
454
|
|
Securities loaned (2)
|
204,339
|
|
|
—
|
|
|
204,339
|
|
|
(202,253
|
)
|
|
—
|
|
|
2,086
|
|
||||||
Total
|
$
|
586,344
|
|
|
$
|
(227,850
|
)
|
|
$
|
358,494
|
|
|
$
|
(355,954
|
)
|
|
$
|
—
|
|
|
$
|
2,540
|
|
(2)
|
Included in payable to brokers, dealers and clearing organizations on the condensed consolidated
|
As of December 31, 2019
|
|||||||||||||||||||||||
(Expressed in thousands)
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet |
|
|
||||||||||||||
|
Gross
Amounts of Recognized Assets |
|
Gross
Amounts Offset on the Balance Sheet |
|
Net Amounts
of Assets Presented on the Balance Sheet |
|
Financial
Instruments |
|
Cash
Collateral Received |
|
Net Amount
|
||||||||||||
Reverse repurchase agreements
|
$
|
55,927
|
|
|
$
|
(55,927
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Securities borrowed (1)
|
99,635
|
|
|
—
|
|
|
99,635
|
|
|
(97,702
|
)
|
|
—
|
|
|
1,933
|
|
||||||
Total
|
$
|
155,562
|
|
|
$
|
(55,927
|
)
|
|
$
|
99,635
|
|
|
$
|
(97,702
|
)
|
|
$
|
—
|
|
|
$
|
1,933
|
|
(1)
|
Included in receivable from brokers, dealers and clearing organizations on the condensed consolidated balance sheet.
|
|
|
|
|
|
|
|
Gross Amounts Not Offset
on the Balance Sheet
|
|
|
||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
|
Gross
Amounts
Offset on the Balance Sheet
|
|
Net Amounts
of Liabilities
Presented on
the Balance
Sheet
|
|
Financial
Instruments
|
|
Cash
Collateral
Pledged
|
|
Net Amount
|
||||||||||||
Repurchase agreements
|
$
|
343,192
|
|
|
$
|
(55,927
|
)
|
|
$
|
287,265
|
|
|
$
|
(285,264
|
)
|
|
$
|
—
|
|
|
$
|
2,001
|
|
Securities loaned (2)
|
234,343
|
|
|
—
|
|
|
234,343
|
|
|
(228,548
|
)
|
|
—
|
|
|
5,795
|
|
||||||
Total
|
$
|
577,535
|
|
|
$
|
(55,927
|
)
|
|
$
|
521,608
|
|
|
$
|
(513,812
|
)
|
|
$
|
—
|
|
|
$
|
7,796
|
|
(2)
|
Included in payable to brokers, dealers and clearing organizations on the condensed consolidated
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
|
|
|
|
|
|
||||
Issued
|
|
Maturity Date
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
6.75% Senior Secured Notes
|
|
7/1/2022
|
|
$
|
148,574
|
|
|
$
|
150,000
|
|
Unamortized Debt Issuance Cost
|
|
|
|
(384
|
)
|
|
(485
|
)
|
||
|
|
|
|
$
|
148,190
|
|
|
$
|
149,515
|
|
•
|
it is less than $20 million in any fiscal year; or
|
•
|
when combined with all other Restricted Payments (as defined in the indenture governing the Notes) that rely upon this exception, it does not exceed $10 million.
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||
Class A Stock outstanding, beginning of period
|
12,610,740
|
|
|
12,923,517
|
|
|
12,698,703
|
|
|
12,941,809
|
|
Issued pursuant to share-based compensation plans
|
25,783
|
|
|
—
|
|
|
347,324
|
|
|
61,091
|
|
Repurchased and canceled pursuant to the stock buy-back
|
(191,044
|
)
|
|
(167,209
|
)
|
|
(600,548
|
)
|
|
(246,592
|
)
|
Class A Stock outstanding, end of period
|
12,445,479
|
|
|
12,756,308
|
|
|
12,445,479
|
|
|
12,756,308
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
14.
|
Regulatory requirements
|
•
|
Common Equity Tier 1 ratio 23.36% (required 4.5%);
|
•
|
Tier 1 Capital ratio 23.36% (required 6.0%); and
|
•
|
Total Capital ratio 31.15% (required 8.0%).
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(1)
|
Clients investing in the OAM advisory program are charged fees based on the value of AUM.
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
267
|
|
|
$
|
185
|
|
|
$
|
50,785
|
|
|
$
|
—
|
|
|
$
|
51,237
|
|
Deposits with clearing organizations
|
—
|
|
|
—
|
|
|
90,536
|
|
|
—
|
|
|
90,536
|
|
|||||
Receivable from brokers, dealers and clearing organizations
|
|
|
|
—
|
|
|
315,947
|
|
|
—
|
|
|
315,947
|
|
|||||
Receivable from customers, net of allowance for credit losses of $493
|
—
|
|
|
—
|
|
|
860,140
|
|
|
—
|
|
|
860,140
|
|
|||||
Income tax receivable
|
44,125
|
|
|
15,371
|
|
|
(702
|
)
|
|
(57,005
|
)
|
|
1,789
|
|
|||||
Securities owned, including amounts pledged of $357,323 at fair value
|
—
|
|
|
1,422
|
|
|
500,607
|
|
|
—
|
|
|
502,029
|
|
|||||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $34,022 and $3,903, respectively
|
—
|
|
|
—
|
|
|
44,114
|
|
|
—
|
|
|
44,114
|
|
|||||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $98,885
|
—
|
|
|
21,761
|
|
|
8,657
|
|
|
—
|
|
|
30,418
|
|
|||||
Right-of-use lease assets, net of accumulated amortization of $37,597
|
—
|
|
|
155,192
|
|
|
5,166
|
|
|
—
|
|
|
160,358
|
|
|||||
Subordinated loan receivable
|
209
|
|
|
112,558
|
|
|
—
|
|
|
(112,767
|
)
|
|
—
|
|
|||||
Intangible assets
|
—
|
|
|
400
|
|
|
31,700
|
|
|
—
|
|
|
32,100
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
137,889
|
|
|
—
|
|
|
137,889
|
|
|||||
Other assets
|
179
|
|
|
1,368
|
|
|
136,216
|
|
|
(3
|
)
|
|
137,760
|
|
|||||
Deferred tax assets
|
—
|
|
|
(26
|
)
|
|
(2,414
|
)
|
|
2,440
|
|
|
—
|
|
|||||
Investment in subsidiaries
|
757,878
|
|
|
620,581
|
|
|
(4
|
)
|
|
(1,378,455
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
(50,836
|
)
|
|
72,619
|
|
|
4,553
|
|
|
(26,336
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
751,822
|
|
|
$
|
1,001,431
|
|
|
$
|
2,183,190
|
|
|
$
|
(1,572,126
|
)
|
|
$
|
2,364,317
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Drafts payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,374
|
|
|
$
|
—
|
|
|
$
|
37,374
|
|
Bank call loans
|
—
|
|
|
—
|
|
|
13,000
|
|
|
—
|
|
|
13,000
|
|
|||||
Payable to brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
216,111
|
|
|
—
|
|
|
216,111
|
|
|||||
Payable to customers
|
—
|
|
|
—
|
|
|
416,914
|
|
|
—
|
|
|
416,914
|
|
|||||
Securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
154,155
|
|
|
—
|
|
|
154,155
|
|
|||||
Securities sold but not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
356,589
|
|
|
—
|
|
|
356,589
|
|
|||||
Accrued compensation
|
—
|
|
|
—
|
|
|
146,988
|
|
|
—
|
|
|
146,988
|
|
|||||
Income tax payable
|
2,440
|
|
|
22,189
|
|
|
32,376
|
|
|
(57,005
|
)
|
|
—
|
|
|||||
Accounts payable and other liabilities
|
55
|
|
|
(10,305
|
)
|
|
53,449
|
|
|
20
|
|
|
43,219
|
|
|||||
Lease liabilities
|
—
|
|
|
196,604
|
|
|
5,424
|
|
|
—
|
|
|
202,028
|
|
|||||
Senior secured notes, net of debt issuance cost of $384
|
148,190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,190
|
|
|||||
Subordinated indebtedness
|
—
|
|
|
—
|
|
|
112,558
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
(7,377
|
)
|
|
33,546
|
|
|
2,443
|
|
|
28,612
|
|
|||||
Intercompany payables
|
—
|
|
|
26,335
|
|
|
—
|
|
|
(26,335
|
)
|
|
—
|
|
|||||
Total liabilities
|
150,685
|
|
|
227,446
|
|
|
1,578,484
|
|
|
(193,435
|
)
|
|
1,763,180
|
|
|||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
601,137
|
|
|
773,985
|
|
|
604,706
|
|
|
(1,378,691
|
)
|
|
601,137
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
751,822
|
|
|
$
|
1,001,431
|
|
|
$
|
2,183,190
|
|
|
$
|
(1,572,126
|
)
|
|
$
|
2,364,317
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
4,811
|
|
|
$
|
2,179
|
|
|
$
|
72,560
|
|
|
$
|
—
|
|
|
$
|
79,550
|
|
Deposits with clearing organizations
|
—
|
|
|
—
|
|
|
48,415
|
|
|
—
|
|
|
48,415
|
|
|||||
Receivable from brokers, dealers and clearing organizations
|
—
|
|
|
—
|
|
|
158,231
|
|
|
5,062
|
|
|
163,293
|
|
|||||
Receivable from customers, net of allowance for credit losses of $451
|
—
|
|
|
—
|
|
|
796,934
|
|
|
—
|
|
|
796,934
|
|
|||||
Income tax receivable
|
42,556
|
|
|
16,469
|
|
|
—
|
|
|
(53,855
|
)
|
|
5,170
|
|
|||||
Securities owned, including amounts pledged of $357,120 at fair value
|
—
|
|
|
1,352
|
|
|
798,367
|
|
|
—
|
|
|
799,719
|
|
|||||
Notes receivable, net of accumulated amortization and allowance for uncollectibles of $38,355 and $3,673, respectively
|
—
|
|
|
—
|
|
|
43,670
|
|
|
—
|
|
|
43,670
|
|
|||||
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $94,773
|
—
|
|
|
22,537
|
|
|
8,840
|
|
|
—
|
|
|
31,377
|
|
|||||
Subordinated loan receivable
|
209
|
|
|
112,558
|
|
|
—
|
|
|
(112,767
|
)
|
|
—
|
|
|||||
Right-of-use lease assets, net of accumulated amortization of $25,186
|
—
|
|
|
153,780
|
|
|
6,517
|
|
|
—
|
|
|
160,297
|
|
|||||
Intangible assets
|
—
|
|
|
400
|
|
|
31,700
|
|
|
—
|
|
|
32,100
|
|
|||||
Goodwill
|
—
|
|
|
—
|
|
|
137,889
|
|
|
—
|
|
|
137,889
|
|
|||||
Other assets
|
154
|
|
|
11,798
|
|
|
164,821
|
|
|
(10,432
|
)
|
|
166,341
|
|
|||||
Deferred tax assets
|
4
|
|
|
7,048
|
|
|
2,449
|
|
|
(9,501
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
697,093
|
|
|
763,990
|
|
|
24,656
|
|
|
(1,485,739
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
2,875
|
|
|
67,923
|
|
|
—
|
|
|
(70,798
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
747,702
|
|
|
$
|
1,160,034
|
|
|
$
|
2,295,049
|
|
|
$
|
(1,738,030
|
)
|
|
$
|
2,464,755
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Payable to brokers, dealers and clearing organizations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
520,975
|
|
|
$
|
—
|
|
|
$
|
520,975
|
|
Payable to customers
|
—
|
|
|
—
|
|
|
334,735
|
|
|
—
|
|
|
334,735
|
|
|||||
Securities sold under agreements to repurchase
|
—
|
|
|
—
|
|
|
287,265
|
|
|
—
|
|
|
287,265
|
|
|||||
Securities sold but not yet purchased, at fair value
|
—
|
|
|
—
|
|
|
100,571
|
|
|
—
|
|
|
100,571
|
|
|||||
Accrued compensation
|
—
|
|
|
—
|
|
|
207,358
|
|
|
—
|
|
|
207,358
|
|
|||||
Accounts payable and other liabilities
|
5,166
|
|
|
75
|
|
|
50,049
|
|
|
(10,565
|
)
|
|
44,725
|
|
|||||
Lease liabilities
|
—
|
|
|
196,234
|
|
|
6,906
|
|
|
—
|
|
|
203,140
|
|
|||||
Income tax payable
|
—
|
|
|
40
|
|
|
703
|
|
|
(743
|
)
|
|
—
|
|
|||||
Senior secured notes, net of debt issuance cost of $485
|
149,515
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,515
|
|
|||||
Subordinated indebtedness
|
—
|
|
|
—
|
|
|
112,558
|
|
|
(112,558
|
)
|
|
—
|
|
|||||
Deferred tax liabilities
|
—
|
|
|
—
|
|
|
33,546
|
|
|
(9,797
|
)
|
|
23,749
|
|
|||||
Intercompany payables
|
299
|
|
|
—
|
|
|
—
|
|
|
(299
|
)
|
|
—
|
|
|||||
Total liabilities
|
154,980
|
|
|
196,349
|
|
|
1,654,666
|
|
|
(133,962
|
)
|
|
1,872,033
|
|
|||||
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' equity
|
592,722
|
|
|
963,685
|
|
|
640,383
|
|
|
(1,604,068
|
)
|
|
592,722
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
747,702
|
|
|
$
|
1,160,034
|
|
|
$
|
2,295,049
|
|
|
$
|
(1,738,030
|
)
|
|
$
|
2,464,755
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
101,636
|
|
|
$
|
—
|
|
|
$
|
101,636
|
|
Advisory fees
|
—
|
|
|
—
|
|
|
76,330
|
|
|
(349
|
)
|
|
75,981
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
46,186
|
|
|
—
|
|
|
46,186
|
|
|||||
Bank deposit sweep income
|
—
|
|
|
—
|
|
|
7,122
|
|
|
—
|
|
|
7,122
|
|
|||||
Interest
|
1
|
|
|
2,058
|
|
|
6,240
|
|
|
(2,079
|
)
|
|
6,220
|
|
|||||
Principal transactions, net
|
—
|
|
|
65
|
|
|
11,999
|
|
|
—
|
|
|
12,064
|
|
|||||
Other
|
9
|
|
|
—
|
|
|
15,512
|
|
|
—
|
|
|
15,521
|
|
|||||
Total revenue
|
10
|
|
|
2,123
|
|
|
265,025
|
|
|
(2,428
|
)
|
|
264,730
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
306
|
|
|
—
|
|
|
179,288
|
|
|
—
|
|
|
179,594
|
|
|||||
Communications and technology
|
43
|
|
|
—
|
|
|
21,281
|
|
|
—
|
|
|
21,324
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
15,334
|
|
|
—
|
|
|
15,334
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
6,191
|
|
|
—
|
|
|
6,191
|
|
|||||
Interest
|
2,506
|
|
|
—
|
|
|
2,462
|
|
|
(2,078
|
)
|
|
2,890
|
|
|||||
Other
|
219
|
|
|
3
|
|
|
16,261
|
|
|
(350
|
)
|
|
16,133
|
|
|||||
Total expenses
|
3,074
|
|
|
3
|
|
|
240,817
|
|
|
(2,428
|
)
|
|
241,466
|
|
|||||
Pre-tax income (loss)
|
(3,064
|
)
|
|
2,120
|
|
|
24,208
|
|
|
—
|
|
|
23,264
|
|
|||||
Income taxes
|
(826
|
)
|
|
546
|
|
|
5,895
|
|
|
—
|
|
|
5,615
|
|
|||||
Net income (loss)
|
(2,238
|
)
|
|
1,574
|
|
|
18,313
|
|
|
—
|
|
|
17,649
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
19,887
|
|
|
18,313
|
|
|
—
|
|
|
(38,200
|
)
|
|
—
|
|
|||||
Net income
|
17,649
|
|
|
19,887
|
|
|
18,313
|
|
|
(38,200
|
)
|
|
17,649
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
480
|
|
|
—
|
|
|
480
|
|
|||||
Total comprehensive income
|
$
|
17,649
|
|
|
$
|
19,887
|
|
|
$
|
18,793
|
|
|
$
|
(38,200
|
)
|
|
$
|
18,129
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries |
|
Non-guarantor
subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
80,896
|
|
|
$
|
—
|
|
|
$
|
80,896
|
|
Advisory fees
|
—
|
|
|
—
|
|
|
81,067
|
|
|
(360
|
)
|
|
80,707
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
32,006
|
|
|
—
|
|
|
32,006
|
|
|||||
Bank deposit sweep income
|
—
|
|
|
—
|
|
|
31,830
|
|
|
—
|
|
|
31,830
|
|
|||||
Interest
|
91
|
|
|
2,060
|
|
|
13,473
|
|
|
(2,074
|
)
|
|
13,550
|
|
|||||
Principal transactions, net
|
—
|
|
|
40
|
|
|
3,005
|
|
|
—
|
|
|
3,045
|
|
|||||
Other
|
—
|
|
|
1
|
|
|
8,899
|
|
|
1
|
|
|
8,901
|
|
|||||
Total revenue
|
91
|
|
|
2,101
|
|
|
251,176
|
|
|
(2,433
|
)
|
|
250,935
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
380
|
|
|
—
|
|
|
155,402
|
|
|
1
|
|
|
155,783
|
|
|||||
Communications and technology
|
52
|
|
|
—
|
|
|
20,447
|
|
|
—
|
|
|
20,499
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
15,573
|
|
|
—
|
|
|
15,573
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
5,678
|
|
|
—
|
|
|
5,678
|
|
|||||
Interest
|
3,375
|
|
|
—
|
|
|
11,890
|
|
|
(2,073
|
)
|
|
13,192
|
|
|||||
Other
|
234
|
|
|
122
|
|
|
22,824
|
|
|
(361
|
)
|
|
22,819
|
|
|||||
Total expenses
|
4,041
|
|
|
122
|
|
|
231,814
|
|
|
(2,433
|
)
|
|
233,544
|
|
|||||
Pre-tax income (loss)
|
(3,950
|
)
|
|
1,979
|
|
|
19,362
|
|
|
—
|
|
|
17,391
|
|
|||||
Income taxes
|
(995
|
)
|
|
510
|
|
|
5,501
|
|
|
—
|
|
|
5,016
|
|
|||||
Net income (loss)
|
(2,955
|
)
|
|
1,469
|
|
|
13,861
|
|
|
—
|
|
|
12,375
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
15,330
|
|
|
13,861
|
|
|
—
|
|
|
(29,191
|
)
|
|
—
|
|
|||||
Net income
|
12,375
|
|
|
15,330
|
|
|
13,861
|
|
|
(29,191
|
)
|
|
12,375
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
361
|
|
|
—
|
|
|
361
|
|
|||||
Total comprehensive income
|
$
|
12,375
|
|
|
$
|
15,330
|
|
|
$
|
14,222
|
|
|
$
|
(29,191
|
)
|
|
$
|
12,736
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries |
|
Non-guarantor
subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
204,885
|
|
|
$
|
—
|
|
|
$
|
204,885
|
|
Advisory fees
|
—
|
|
|
—
|
|
|
162,848
|
|
|
(703
|
)
|
|
162,145
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
71,914
|
|
|
—
|
|
|
71,914
|
|
|||||
Bank deposit sweep income
|
—
|
|
|
—
|
|
|
25,948
|
|
|
—
|
|
|
25,948
|
|
|||||
Interest
|
2
|
|
|
4,116
|
|
|
17,138
|
|
|
(4,146
|
)
|
|
17,110
|
|
|||||
Principal transactions, net
|
—
|
|
|
49
|
|
|
11,147
|
|
|
—
|
|
|
11,196
|
|
|||||
Other
|
95
|
|
|
—
|
|
|
6,211
|
|
|
(4
|
)
|
|
6,302
|
|
|||||
Total revenue
|
97
|
|
|
4,165
|
|
|
500,091
|
|
|
(4,853
|
)
|
|
499,500
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
620
|
|
|
—
|
|
|
336,650
|
|
|
—
|
|
|
337,270
|
|
|||||
Communications and technology
|
83
|
|
|
—
|
|
|
41,132
|
|
|
—
|
|
|
41,215
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
31,412
|
|
|
—
|
|
|
31,412
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
11,850
|
|
|
—
|
|
|
11,850
|
|
|||||
Interest
|
5,036
|
|
|
—
|
|
|
8,550
|
|
|
(4,146
|
)
|
|
9,440
|
|
|||||
Other
|
452
|
|
|
5
|
|
|
35,076
|
|
|
(707
|
)
|
|
34,826
|
|
|||||
Total expenses
|
6,191
|
|
|
5
|
|
|
464,670
|
|
|
(4,853
|
)
|
|
466,013
|
|
|||||
Pre-tax income (loss)
|
(6,094
|
)
|
|
4,160
|
|
|
35,421
|
|
|
—
|
|
|
33,487
|
|
|||||
Income taxes
|
(1,566
|
)
|
|
1,095
|
|
|
8,491
|
|
|
—
|
|
|
8,020
|
|
|||||
Net income (loss)
|
(4,528
|
)
|
|
3,065
|
|
|
26,930
|
|
|
—
|
|
|
25,467
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
29,995
|
|
|
26,930
|
|
|
—
|
|
|
(56,925
|
)
|
|
—
|
|
|||||
Net income
|
25,467
|
|
|
29,995
|
|
|
26,930
|
|
|
(56,925
|
)
|
|
25,467
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
|||||
Total comprehensive income
|
$
|
25,467
|
|
|
$
|
29,995
|
|
|
$
|
26,873
|
|
|
$
|
(56,925
|
)
|
|
$
|
25,410
|
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries |
|
Non-guarantor
subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
160,305
|
|
|
$
|
—
|
|
|
$
|
160,305
|
|
Advisory fees
|
—
|
|
|
—
|
|
|
155,049
|
|
|
(695
|
)
|
|
154,354
|
|
|||||
Investment banking
|
—
|
|
|
—
|
|
|
60,049
|
|
|
—
|
|
|
60,049
|
|
|||||
Bank deposit sweep income
|
—
|
|
|
—
|
|
|
65,798
|
|
|
—
|
|
|
65,798
|
|
|||||
Interest
|
175
|
|
|
4,122
|
|
|
26,127
|
|
|
(4,147
|
)
|
|
26,277
|
|
|||||
Principal transactions, net
|
—
|
|
|
101
|
|
|
14,394
|
|
|
(12
|
)
|
|
14,483
|
|
|||||
Other
|
—
|
|
|
2
|
|
|
21,436
|
|
|
1
|
|
|
21,439
|
|
|||||
Total revenue
|
175
|
|
|
4,225
|
|
|
503,158
|
|
|
(4,853
|
)
|
|
502,705
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and related expenses
|
825
|
|
|
—
|
|
|
315,318
|
|
|
(5
|
)
|
|
316,138
|
|
|||||
Communications and technology
|
91
|
|
|
—
|
|
|
40,494
|
|
|
—
|
|
|
40,585
|
|
|||||
Occupancy and equipment costs
|
—
|
|
|
—
|
|
|
30,846
|
|
|
—
|
|
|
30,846
|
|
|||||
Clearing and exchange fees
|
—
|
|
|
—
|
|
|
11,010
|
|
|
—
|
|
|
11,010
|
|
|||||
Interest
|
6,750
|
|
|
—
|
|
|
23,575
|
|
|
(4,147
|
)
|
|
26,178
|
|
|||||
Other
|
550
|
|
|
244
|
|
|
44,412
|
|
|
(701
|
)
|
|
44,505
|
|
|||||
Total expenses
|
8,216
|
|
|
244
|
|
|
465,655
|
|
|
(4,853
|
)
|
|
469,262
|
|
|||||
Pre-tax income (loss)
|
(8,041
|
)
|
|
3,981
|
|
|
37,503
|
|
|
—
|
|
|
33,443
|
|
|||||
Income taxes
|
(2,338
|
)
|
|
1,436
|
|
|
10,776
|
|
|
—
|
|
|
9,874
|
|
|||||
Net income (loss)
|
(5,703
|
)
|
|
2,545
|
|
|
26,727
|
|
|
—
|
|
|
23,569
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in earnings of subsidiaries
|
29,272
|
|
|
26,726
|
|
|
—
|
|
|
(55,998
|
)
|
|
—
|
|
|||||
Net income
|
23,569
|
|
|
29,271
|
|
|
26,727
|
|
|
(55,998
|
)
|
|
23,569
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
924
|
|
|
—
|
|
|
924
|
|
|||||
Total comprehensive income
|
$
|
23,569
|
|
|
$
|
29,271
|
|
|
$
|
27,651
|
|
|
$
|
(55,998
|
)
|
|
$
|
24,493
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in) operating activities
|
$
|
17,695
|
|
|
$
|
(1,994
|
)
|
|
$
|
(31,614
|
)
|
|
$
|
—
|
|
|
$
|
(15,913
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of furniture, equipment and leasehold improvements
|
—
|
|
|
—
|
|
|
(3,161
|
)
|
|
—
|
|
|
(3,161
|
)
|
|||||
Cash used in investing activities
|
—
|
|
|
—
|
|
|
(3,161
|
)
|
|
—
|
|
|
(3,161
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(3,089
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,089
|
)
|
|||||
Repurchase of Class A non-voting common stock for cancellation
|
(12,266
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,266
|
)
|
|||||
Repurchase of senior secured notes
|
(1,426
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,426
|
)
|
|||||
Payments for employee taxes withheld related to vested share-based awards
|
(5,458
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,458
|
)
|
|||||
Increase in bank call loans, net
|
—
|
|
|
—
|
|
|
13,000
|
|
|
—
|
|
|
13,000
|
|
|||||
Cash provided by (used in) financing activities
|
(22,239
|
)
|
|
—
|
|
|
13,000
|
|
|
—
|
|
|
(9,239
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(4,544
|
)
|
|
(1,994
|
)
|
|
(21,775
|
)
|
|
—
|
|
|
(28,313
|
)
|
|||||
Cash and cash equivalents, beginning of the period
|
4,811
|
|
|
2,179
|
|
|
72,560
|
|
|
—
|
|
|
79,550
|
|
|||||
Cash and cash equivalents, end of the period
|
$
|
267
|
|
|
$
|
185
|
|
|
$
|
50,785
|
|
|
$
|
—
|
|
|
$
|
51,237
|
|
OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
|
(Expressed in thousands)
|
Parent
|
|
Guarantor
subsidiaries
|
|
Non-guarantor
subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash used in operating activities
|
$
|
(5,060
|
)
|
|
$
|
(3,351
|
)
|
|
$
|
(29,580
|
)
|
|
$
|
—
|
|
|
$
|
(37,991
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of furniture, equipment and leasehold improvements
|
—
|
|
|
—
|
|
|
(6,941
|
)
|
|
—
|
|
|
(6,941
|
)
|
|||||
Cash used in investing activities
|
—
|
|
|
—
|
|
|
(6,246
|
)
|
|
—
|
|
|
(6,246
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends paid on Class A non-voting and Class B voting common stock
|
(2,865
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,865
|
)
|
|||||
Issuance of Class A non-voting common stock
|
(6,352
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,352
|
)
|
|||||
Payments for employee taxes withheld related to vested share-based awards
|
(1,014
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,014
|
)
|
|||||
Decrease in bank call loans, net
|
—
|
|
|
—
|
|
|
35,100
|
|
|
—
|
|
|
35,100
|
|
|||||
Cash provided by (used in) financing activities
|
(10,231
|
)
|
|
—
|
|
|
35,100
|
|
|
—
|
|
|
24,869
|
|
|||||
Net decrease in cash and cash equivalents
|
(15,291
|
)
|
|
(3,351
|
)
|
|
(726
|
)
|
|
—
|
|
|
(19,368
|
)
|
|||||
Cash and cash equivalents, beginning of the period
|
53,526
|
|
|
3,826
|
|
|
33,323
|
|
|
—
|
|
|
90,675
|
|
|||||
Cash and cash equivalents, end of the period
|
$
|
38,235
|
|
|
$
|
475
|
|
|
$
|
32,597
|
|
|
$
|
—
|
|
|
$
|
71,307
|
|
(Expressed in thousands, except Per Share Amounts or otherwise indicated)
|
|
|
|
|
||||||||||
|
2Q-2020
|
|
2Q-2019
|
|
Change
|
|
% Change
|
|||||||
Revenue
|
$
|
264,730
|
|
|
$
|
250,935
|
|
|
$
|
13,795
|
|
|
5.5
|
|
Compensation expense
|
$
|
179,594
|
|
|
$
|
155,783
|
|
|
$
|
23,811
|
|
|
15.3
|
|
Non-compensation expense
|
$
|
61,872
|
|
|
$
|
77,761
|
|
|
$
|
(15,889
|
)
|
|
(20.4
|
)
|
Pre-Tax Income
|
$
|
23,264
|
|
|
$
|
17,391
|
|
|
$
|
5,873
|
|
|
33.8
|
|
Income Taxes
|
$
|
5,615
|
|
|
$
|
5,016
|
|
|
$
|
599
|
|
|
11.9
|
|
Net Income
|
$
|
17,649
|
|
|
$
|
12,375
|
|
|
$
|
5,274
|
|
|
42.6
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per share (basic)
|
$
|
1.40
|
|
|
$
|
0.95
|
|
|
$
|
0.45
|
|
|
47.4
|
|
Earnings per share (diluted)
|
$
|
1.34
|
|
|
$
|
0.89
|
|
|
$
|
0.45
|
|
|
50.6
|
|
|
|
|
|
|
|
|
|
|
||||||
Book Value Per Share
|
$
|
47.92
|
|
|
$
|
43.84
|
|
|
$
|
4.08
|
|
|
9.3
|
|
Tangible Book Value Per Share
|
$
|
34.37
|
|
|
$
|
30.62
|
|
|
$
|
3.75
|
|
|
12.2
|
|
|
|
|
|
|
|
|
|
|||||||
CAUA ($ billions)
|
$
|
89.7
|
|
|
$
|
87.3
|
|
|
$
|
2.4
|
|
|
2.7
|
|
AUM ($ billions)
|
$
|
32.7
|
|
|
$
|
30.2
|
|
|
$
|
2.5
|
|
|
8.3
|
|
•
|
Revenue increased 5.5% during the period driven by robust underwriting revenue, increased institutional equities and fixed income sales and trading activity, and higher retail investor participation.
|
•
|
Compensation expense increased 15.3% due to higher production, incentive, and deferred compensation costs resulting from higher incentive compensation tied to commissionable revenue and asset values underlying deferred compensation programs.
|
•
|
Compensation expense as a percentage of revenue was higher at 67.8% during the current period versus 62.1% last year due to substantially lower bank deposit sweep income which has no associated compensation costs.
|
•
|
Book value and tangible book value per share reached record levels at June 30, 2020.
|
•
|
Private Client pre-tax profit margins were 17.2% reflecting strong underlying business fundamentals.
|
•
|
AUM reached a record level at June 30, 2020.
|
•
|
Investment banking had its best quarter since the fourth quarter of 2010 with revenue of $46.2 million.
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||||||
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Private Client
|
$
|
141,825
|
|
|
$
|
161,928
|
|
|
(12.4)
|
|
$
|
283,243
|
|
|
$
|
325,455
|
|
|
(13.0)
|
Asset Management
|
17,515
|
|
|
18,622
|
|
|
(5.9)
|
|
36,791
|
|
|
35,208
|
|
|
4.5
|
||||
Capital Markets
|
105,270
|
|
|
71,819
|
|
|
46.6
|
|
180,812
|
|
|
142,780
|
|
|
26.6
|
||||
Corporate/Other
|
120
|
|
|
(1,434
|
)
|
|
*
|
|
(1,346
|
)
|
|
(738
|
)
|
|
82.4
|
||||
Total
|
$
|
264,730
|
|
|
$
|
250,935
|
|
|
5.5
|
|
$
|
499,500
|
|
|
$
|
502,705
|
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pre-Tax Income (Loss)
|
|
|
|
|
|
|
|||||||||||||
Private Client
|
$
|
24,349
|
|
|
$
|
43,416
|
|
|
(43.9)
|
|
$
|
57,718
|
|
|
$
|
86,250
|
|
|
(33.1)
|
Asset Management
|
3,983
|
|
|
5,318
|
|
|
(25.1)
|
|
8,288
|
|
|
7,560
|
|
|
9.6
|
||||
Capital Markets
|
22,322
|
|
|
(1,801
|
)
|
|
*
|
|
22,179
|
|
|
(4,448
|
)
|
|
*
|
||||
Corporate/Other
|
(27,390
|
)
|
|
(29,542
|
)
|
|
7.3
|
|
(54,698
|
)
|
|
(55,919
|
)
|
|
(2.2)
|
||||
Total
|
$
|
23,264
|
|
|
$
|
17,391
|
|
|
33.8
|
|
$
|
33,487
|
|
|
$
|
33,443
|
|
|
0.1
|
('000s, except Financial advisor headcount or otherwise indicated)
|
|
|
|
|
||||||||||
|
2Q-2020
|
|
2Q-2019
|
|
Change
|
|
% Change
|
|||||||
Revenue
|
$
|
141,825
|
|
|
$
|
161,928
|
|
|
$
|
(20,103
|
)
|
|
(12.4
|
)
|
Retail commissions
|
$
|
50,295
|
|
|
$
|
47,150
|
|
|
$
|
3,145
|
|
|
6.7
|
|
Advisory fee revenue
|
$
|
58,465
|
|
|
$
|
62,080
|
|
|
$
|
(3,615
|
)
|
|
(5.8
|
)
|
Bank deposit sweep income
|
$
|
7,122
|
|
|
$
|
31,830
|
|
|
$
|
(24,708
|
)
|
|
(77.6
|
)
|
Interest
|
$
|
5,134
|
|
|
$
|
9,639
|
|
|
$
|
(4,505
|
)
|
|
(46.7
|
)
|
Other
|
$
|
20,809
|
|
|
$
|
11,229
|
|
|
$
|
9,580
|
|
|
85.3
|
|
|
|
|
|
|
|
|
|
|||||||
Total Expenses
|
$
|
117,476
|
|
|
$
|
118,513
|
|
|
$
|
(1,037
|
)
|
|
(0.9
|
)
|
Compensation
|
$
|
90,512
|
|
|
$
|
85,540
|
|
|
$
|
4,972
|
|
|
5.8
|
|
Non-compensation
|
$
|
26,964
|
|
|
$
|
32,973
|
|
|
$
|
(6,009
|
)
|
|
(18.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
Client Asset Under Administration (billions)
|
$
|
89.7
|
|
|
$
|
87.3
|
|
|
$
|
2.4
|
|
|
2.7
|
|
Cash Sweep Balances (billions)
|
$
|
6.3
|
|
|
$
|
5.0
|
|
|
$
|
1.3
|
|
|
26.0
|
|
Financial Advisor Headcount
|
1,029
|
|
|
1,036
|
|
|
(7
|
)
|
|
(0.7
|
)
|
•
|
Retail commissions were $50.3 million for the second quarter of 2020, an increase of 6.7% from the second quarter of 2019 due to increased volatility and client participation.
|
•
|
Advisory fee revenue on traditional and alternative managed products was $58.5 million for the second quarter of 2020, a decrease of 5.8% from the second quarter of 2019 (see Asset Management below for further information).
|
•
|
Bank deposit sweep income decreased $24.7 million or 77.6% from a year ago due to lower short-term interest rates partially offset by higher average cash sweep balances.
|
•
|
Interest revenue declined 46.7% from a year ago due to lower short-term interest rates partially offset by higher average margin balances.
|
•
|
Other revenue increased 85.3% primarily due to increases in the cash surrender value of company-owned life insurance policies.
|
•
|
Compensation expenses increased 5.8% primarily due to increased deferred compensation costs tied to the performance of the overall equities markets.
|
•
|
Non-compensation expenses decreased 18.2% primarily due to lower interest costs associated with the bank deposit sweep program.
|
•
|
Client assets under administration were $89.7 billion at June 30, 2020 compared with $90.1 billion at December 31, 2019.
|
•
|
Financial adviser headcount was 1,029 at the end of the second quarter of 2020, down from 1,036 at the end of the second quarter of 2019.
|
('000s unless otherwise indicated)
|
2Q-2020
|
|
2Q-2019
|
|
Change
|
|
% Change
|
|||||||
Revenue
|
$
|
17,515
|
|
|
$
|
18,622
|
|
|
$
|
(1,107
|
)
|
|
(5.9
|
)
|
Advisory fee revenue
|
$
|
17,507
|
|
|
$
|
18,617
|
|
|
$
|
(1,110
|
)
|
|
(6.0
|
)
|
Other
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
60.0
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Expenses
|
$
|
13,532
|
|
|
$
|
13,304
|
|
|
$
|
228
|
|
|
1.7
|
|
Compensation
|
$
|
5,676
|
|
|
$
|
5,316
|
|
|
$
|
360
|
|
|
6.8
|
|
Non-compensation
|
$
|
7,856
|
|
|
$
|
7,988
|
|
|
$
|
(132
|
)
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
AUM (billions)
|
$
|
32.7
|
|
|
$
|
30.2
|
|
|
$
|
2.5
|
|
|
8.3
|
|
•
|
Advisory fee revenue on traditional and alternative managed products was $17.5 million for the second quarter of 2020, a decrease of 5.9% from the second quarter of 2019 primarily due to lower AUM at March 31, 2020.
|
•
|
Advisory fees are calculated based on the value of client AUM at the end of the prior quarter which totaled $28.0 billion at March 31, 2020 ($32.1 billion at December 31, 2019) and are allocated between the Private Client and Asset Management business segments.
|
•
|
AUM increased to $32.7 billion at June 30, 2020 compared with $30.2 billion at June 30, 2019, which is the basis for advisory fee billings for the third quarter of 2020. The increase in AUM was comprised of higher asset values of $1.3 billion on existing client holdings and a positive net contribution of assets of $1.2 billion.
|
•
|
Compensation expenses were up 6.8% which was primarily related to increases in incentive compensation.
|
•
|
Non-compensation expenses were roughly flat when compared to the prior period.
|
(1)
|
Traditional investments include third party advisory programs, Oppenheimer financial adviser
|
(2)
|
Institutional fixed income provides solutions to institutional investors including: Taft-Hartley Funds,
|
(3)
|
Private equity funds represent private equity fund of funds including portfolios focused on natural
|
(4)
|
The portfolio enhancement program sells uncovered, far out-of-money puts and calls on the S&P
|
('000s)
|
2Q-2020
|
|
2Q-2019
|
|
Change
|
|
% Change
|
|||||||
Revenues
|
$
|
105,270
|
|
|
$
|
71,819
|
|
|
$
|
33,451
|
|
|
46.6
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investment Banking
|
$
|
42,716
|
|
|
$
|
27,742
|
|
|
$
|
14,974
|
|
|
54.0
|
|
Advisory fees
|
$
|
7,244
|
|
|
$
|
13,045
|
|
|
$
|
(5,801
|
)
|
|
(44.5
|
)
|
Equities underwriting
|
$
|
27,787
|
|
|
$
|
13,020
|
|
|
$
|
14,767
|
|
|
113.4
|
|
Fixed income underwriting
|
$
|
7,685
|
|
|
$
|
1,677
|
|
|
$
|
6,008
|
|
|
358.3
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales and Trading
|
$
|
61,878
|
|
|
$
|
43,508
|
|
|
$
|
18,370
|
|
|
42.2
|
|
Equities
|
$
|
30,858
|
|
|
$
|
23,391
|
|
|
$
|
7,467
|
|
|
31.9
|
|
Fixed Income
|
$
|
31,020
|
|
|
$
|
20,117
|
|
|
$
|
10,903
|
|
|
54.2
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other
|
$
|
676
|
|
|
$
|
569
|
|
|
$
|
107
|
|
|
18.8
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Expenses
|
$
|
82,949
|
|
|
$
|
73,620
|
|
|
$
|
9,329
|
|
|
12.7
|
|
Compensation
|
$
|
62,295
|
|
|
$
|
45,848
|
|
|
$
|
16,447
|
|
|
35.9
|
|
Non-compensation
|
$
|
20,654
|
|
|
$
|
27,772
|
|
|
$
|
(7,118
|
)
|
|
(25.6
|
)
|
•
|
Advisory fees earned from investment banking activities decreased 44.5% to $7.2 million for the second quarter of 2020 compared with $13.0 million for the second quarter of 2019 due to lower M&A activity amidst the COVID-19 Pandemic.
|
•
|
Equities underwriting fees increased 113.4% to $27.8 million for the second quarter of 2020 compared with $13.0 million for the second quarter of 2019 due to higher levels of capital issuances in the equity markets.
|
•
|
Fixed income underwriting fees increased 358.3% to $7.7 million for the second quarter of 2020 compared with $1.7 million for the second quarter of 2019 due to increased fees earned in emerging markets and pubic finance offerings.
|
•
|
Fixed income sales and trading increased to $31.0 million for the second quarter of 2020, 54.2% higher compared to $20.1 million during the second quarter of 2019 due to increased client activity in investment grade, emerging market, high yield and mortgage-backed securities.
|
•
|
Equities sales and trading increased to $30.9 million for the second quarter of 2020, 31.9% higher compared to $23.4 million during the second quarter of 2019 due to increased equities agency and convertible bond transactions.
|
•
|
Compensation expenses increased 35.9% primarily due to increased incentive compensation tied to increases in revenue.
|
•
|
Non-compensation expenses were 25.6% lower due to decreased interest costs and reduced costs associated with travel and entertainment and conferences.
|
(Expressed in thousands)
|
|
|
|
||||
|
For the Six Months Ended June 30,
|
||||||
|
2020
|
|
2019
|
||||
Cash used in operating activities
|
$
|
(15,913
|
)
|
|
$
|
(37,991
|
)
|
Cash used in investing activities
|
(3,161
|
)
|
|
(6,246
|
)
|
||
Cash used in (provided by) financing activities
|
(9,239
|
)
|
|
24,869
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(28,313
|
)
|
|
$
|
(19,368
|
)
|
(Expressed in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Less than 1
Year
|
|
|
|
|
|
More than 5
Years
|
||||||||||
|
Total
|
|
|
1-3 Years
|
|
3-5 Years
|
|
||||||||||||
Operating Lease Obligations (1)(2)
|
$
|
274,865
|
|
|
$
|
41,642
|
|
|
$
|
72,349
|
|
|
$
|
56,506
|
|
|
$
|
104,368
|
|
Committed Capital (3)
|
1,238
|
|
|
1,238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Senior Secured Notes (4)(5)
|
168,659
|
|
|
10,029
|
|
|
158,630
|
|
|
—
|
|
|
—
|
|
|||||
ARS Purchase Commitments (3)
|
2,376
|
|
|
1,962
|
|
|
414
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
447,138
|
|
|
$
|
54,871
|
|
|
$
|
231,393
|
|
|
$
|
56,506
|
|
|
$
|
104,368
|
|
(1)
|
See note 4 to the condensed consolidated financial statements for additional information.
|
(2)
|
Includes interest liability of $70.7 million.
|
(3)
|
See note 13 to the condensed consolidated financial statements for additional information.
|
(4)
|
See note 11 to the condensed consolidated financial statements for additional information.
|
(5)
|
Includes interest payable of $20.1 million through maturity.
|
•
|
An economic environment which may have significant accounting and financial reporting implication
|
(a)
|
During the second quarter of 2020, the Company issued 25,783 shares of Class A Stock pursuant to the Company's share-based compensation plans to employees of the Company for no cash consideration. Such issuances were exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.
|
(b)
|
Not applicable.
|
(c)
|
Not applicable.
|
OPPENHEIMER HOLDINGS INC.
|
|
BY: /s/ Albert G. Lowenthal
|
Albert G. Lowenthal, Chairman and Chief Executive Officer
|
(Principal Executive Officer)
|
|
BY: /s/ Jeffrey J. Alfano
|
Jeffrey J. Alfano, Chief Financial Officer
|
(Principal Financial and Accounting Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Oppenheimer Holdings Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Albert G. Lowenthal
|
Name: Albert G. Lowenthal
|
Title: Chief Executive Officer
|
July 30, 2020
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Oppenheimer Holdings Inc.;
|
|
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
|
|
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
|
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Jeffrey J. Alfano
|
Name: Jeffrey J. Alfano
|
Title: Chief Financial Officer
|
July 30, 2020
|
/s/ Albert G. Lowenthal
|
Albert G. Lowenthal
|
Chairman and Chief Executive Officer
|
|
/s/ Jeffrey J. Alfano
|
Jeffrey J. Alfano
|
Chief Financial Officer
|