NEW YORK, Oct. 29, 2021
/CNW/ - Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or
"Firm") today reported net income of $26.3
million or $2.07 basic
earnings per share for the third quarter of 2021, an increase of
67.8%, compared with net income of $15.6
million or $1.25 basic
earnings per share for the third quarter of 2020. Revenue for the
third quarter of 2021 was $315.3
million, an increase of 14.1%, compared to revenue of
$276.3 million for the third quarter
of 2020.
Albert G. Lowenthal,
Chairman and CEO commented, "The results for the quarter reflect
the significant impact of our investment in the Capital Markets
franchise over the past several years. Robust demand for
investment banking services continues to propel revenue and
earnings in the Capital Markets business. These results,
coupled with the continued steady performance of our Wealth
Management business, led to the Firm's best first nine months in
its history. Wealth management continued to
deliver solid results driven by near record AUM and strong net
investor flows, despite being negatively impacted by lower interest
rates, while a significant increase in M&A advisory and
placement fees in Capital Markets topped off a very successful
quarter. Concerns around inflation, higher oil prices, the
Federal Reserve's tapering of bond buying, and congressional
uncertainty weighed on equity markets during the period.
These concerns drove up the yield on the 10-Year Treasury to
1.52% as the period of ultra-low interest rates may be coming to an
end."
Summary
Operating Results (Unaudited)
|
('000s, except per
share amounts or otherwise indicated)
|
Firm
|
3Q-21
|
3Q-20
|
Revenue
|
$
|
315,342
|
|
$
|
276,259
|
Compensation
Expense
|
$
|
206,312
|
|
$
|
189,654
|
Non-compensation
Expense
|
$
|
71,636
|
|
$
|
64,887
|
Pre-Tax
Income
|
$
|
37,394
|
|
$
|
21,718
|
Income
Taxes
|
$
|
11,144
|
|
$
|
6,079
|
Net Income
|
$
|
26,250
|
|
$
|
15,639
|
Earnings Per Share
(Basic)
|
$
|
2.07
|
|
$
|
1.25
|
Earnings Per Share
(Diluted)
|
$
|
1.92
|
|
$
|
1.19
|
Book Value Per
Share
|
$
|
61.43
|
|
$
|
49.20
|
Tangible Book Value
Per Share (1)
|
$
|
47.95
|
|
$
|
35.61
|
Private
Client
|
|
|
Revenue
|
$
|
160,864
|
|
$
|
141,097
|
Pre-Tax
Income
|
$
|
37,426
|
|
$
|
25,764
|
Assets Under
Administration (billions)
|
$
|
117.8
|
|
$
|
94.3
|
Asset
Management
|
|
|
Revenue
|
$
|
26,894
|
|
$
|
20,632
|
Pre-Tax
Income
|
$
|
9,412
|
|
$
|
6,426
|
Assets Under
Management (billions)
|
$
|
43.6
|
|
$
|
34.5
|
Capital
Markets
|
|
|
Revenue
|
$
|
128,585
|
|
$
|
114,289
|
Pre-Tax
Income
|
$
|
17,888
|
|
$
|
19,369
|
|
|
|
(1) Represents book
value less goodwill and intangible assets divided by number of
shares outstanding.
|
Highlights
- Record revenue, net income, and earnings per share for the
first nine months of the year
- Record third quarter gross revenue was driven by investment
banking revenue and advisory fees from near record high assets
under management
- Record revenue in Capital Markets segment for the third quarter
was driven by strong M&A advisory and placement fees in
investment banking
- Client assets under administration at record level while client
assets under management near record level at September 30, 2021
- Shareholders' Equity reached a record high of $775.0 million at September 30, 2021
- Book value and tangible book value per share reached record
levels at September 30, 2021
Private Client
Private Client reported revenue for the current quarter of
$160.9 million, 14.0% higher than the
previous year. Pre-tax income of $37.4
million in the current quarter resulted in a pre-tax profit
margin of 23.3%.
('000s, except
otherwise indicated)
|
|
3Q-21
|
3Q-20
|
|
|
|
Revenue
|
$
|
160,864
|
|
$
|
141,097
|
Commissions
|
$
|
51,348
|
|
$
|
48,839
|
Advisory
Fees
|
$
|
89,849
|
|
$
|
67,949
|
Bank Deposit Sweep
Income
|
$
|
3,909
|
|
$
|
4,618
|
Interest
|
$
|
7,624
|
|
$
|
5,940
|
Other
|
$
|
8,134
|
|
$
|
13,751
|
|
|
|
Total
Expenses
|
$
|
123,438
|
|
$
|
115,333
|
Compensation
|
$
|
97,522
|
|
$
|
89,562
|
Non-compensation
|
$
|
25,916
|
|
$
|
25,771
|
|
|
|
Financial Advisers
(#)
|
1,003
|
|
1,010
|
Assets Under
Administration (billions)
|
$
|
117.8
|
|
$
|
94.3
|
Cash Sweep
Balances (billions)
|
$
|
7.7
|
|
$
|
6.6
|
Revenue:
- Retail commissions increased 5.1% from a year ago amidst
continued elevated client trading activity
- Advisory fees increased 32.2% due to higher assets under
management during the billing period for the third quarter of 2021
compared with that of the third quarter of 2020
- Bank deposit sweep income decreased $0.7
million or 15.4% from a year ago due to lower short-term
interest rates partially offset by higher average cash sweep
balances which are at record levels
- Interest revenue increased 28.4% from a year ago due to higher
average margin balances partially offset by lower short-term
interest rates
- Other revenue decreased 40.8% primarily due to decreases in the
cash surrender value of Company-owned life insurance policies
during the current quarter compared to a year ago
Total Expenses:
- Compensation expenses increased 8.9% from a year ago primarily
due to increased production-related compensation costs partially
offset by lower share-based and deferred compensation costs
- Non-compensation expenses increased 0.6% from a year ago.
Asset Management
Asset Management reported revenue for the current quarter of
$26.9 million, 30.4% higher compared
with a year ago. Pre-tax income was $9.4 million, an increase of 46.5% compared with
the prior year.
('000s, except
otherwise indicated)
|
|
3Q-21
|
3Q-20
|
|
|
|
Revenue
|
$
|
26,894
|
|
$
|
20,632
|
Advisory
Fees
|
$
|
26,890
|
|
$
|
20,632
|
Other
|
$
|
4
|
|
$
|
—
|
|
|
|
Total
Expenses
|
$
|
17,482
|
|
$
|
14,206
|
Compensation
|
$
|
6,120
|
|
$
|
5,997
|
Non-compensation
|
$
|
11,362
|
|
$
|
8,209
|
|
|
|
AUM
(billions)
|
$
|
43.6
|
|
$
|
34.5
|
Revenue:
- Advisory fee revenue increased 30.3% due to higher assets under
management during the billing period for the third quarter of 2021
compared with that of the third quarter of 2020
Assets under Management (AUM):
- AUM was $43.6 billion at
September 30, 2021, which is the
basis for advisory fee billings for October
2021
- The increase in AUM was comprised of higher asset values of
$7.7 billion on existing client
holdings and a net contribution of assets of $1.4 billion
Total Expenses:
- Compensation expenses were up 2.1% from a year ago which was
primarily due to increases in incentive compensation
- Non-compensation expenses were up 38.4% when compared to the
prior period due to higher portfolio management costs in line with
the increase in AUM
Capital Markets
Capital Markets reported revenue for the current quarter of
$128.6 million, 12.5% higher when
compared with the prior year. Pre-Tax income was $17.9 million compared with pre-tax income of
$19.4 million a year ago.
('000s)
|
|
|
|
3Q-21
|
3Q-20
|
|
|
|
Revenue
|
$
|
128,585
|
|
$
|
114,289
|
|
|
|
Investment
Banking
|
$
|
82,012
|
|
$
|
62,890
|
Advisory
Fees
|
$
|
51,815
|
|
$
|
30,706
|
Equities
Underwriting
|
$
|
26,348
|
|
$
|
27,969
|
Fixed Income
Underwriting
|
$
|
3,140
|
|
$
|
3,608
|
Other
|
$
|
709
|
|
$
|
607
|
|
|
|
Sales and
Trading
|
$
|
46,262
|
|
$
|
50,679
|
Equities
|
$
|
30,861
|
|
$
|
30,497
|
Fixed
Income
|
$
|
15,401
|
|
$
|
20,182
|
|
|
|
Other
|
$
|
311
|
|
$
|
720
|
|
|
|
Total
Expenses
|
$
|
110,697
|
|
$
|
94,920
|
Compensation
|
$
|
81,690
|
|
$
|
71,328
|
Non-compensation
|
$
|
29,007
|
|
$
|
23,592
|
Revenue:
Investment Banking
- Advisory fees earned from investment banking activities
increased 68.7% compared with a year ago driven by higher M&A
advisory and placement fees
- Equity underwriting fees decreased 5.8% compared with a year
ago as underwriting activity tapered off in August and September 2021
- Fixed income underwriting fees decreased 13.0% compared with a
year ago primarily driven by lower fees from public finance
transactions during the current period
Sales and Trading
- Equities sales and trading revenue increased 1.2% compared with
a year ago due to increased trading activity by our institutional
clients
- Fixed Income sales and trading decreased 23.7% compared with a
year ago primarily driven by lower income from municipal
commissions and trading during the current period
Total Expenses:
- Compensation expenses increased 14.5% compared with a year ago
primarily due to increased salary and incentive compensation
partially offset by lower production-related compensation
- Non-compensation expenses were 23.0% higher than a year ago due
to increased underwriting expenses related to high transaction
volumes and higher costs associated with business travel and
entertainment and conferences
Other Matters
(In millions,
except number of shares and per share amounts)
|
|
|
3Q-21
|
3Q-20
|
|
Capital
|
|
|
|
Senior Secured
Notes
|
$
|
124.0
|
|
$
|
123.9
|
|
Shareholders'
Equity
|
$
|
775.0
|
|
$
|
615.2
|
|
Regulatory Net
Capital (1)
|
$
|
372.6
|
|
$
|
268.7
|
|
Regulatory Excess Net
Capital (1)
|
$
|
345.6
|
|
$
|
242.9
|
|
|
|
|
|
Common Stock
Repurchases
|
|
|
|
Repurchases
|
$
|
4.7
|
|
$
|
2.0
|
|
Number of
Shares
|
108,494
|
|
84,290
|
|
Average
Price
|
$
|
43.46
|
|
$
|
23.28
|
|
|
|
|
|
Period End
Shares
|
12,615,399
|
12,504,092
|
Effective Tax
Rate
|
29.8
|
%
|
28.0
|
%
|
|
|
|
|
(1) Attributable to Oppenheimer &
Co. Inc. broker-dealer
|
- Shareholders' Equity reached a record high of $775.0 million on September 30, 2021
- The Board of Directors announced a quarterly dividend of
$0.15 per share effective for the
third quarter of 2021 payable on November
26, 2021 to holders of Class A non-voting and Class B voting
common stock of record on November 12,
2021
- The Company repurchased 108,494 shares of Class A non-voting
common stock during the period under the Company's stock repurchase
program
- Moody's upgraded the Company's Corporate Family rating and
rating of the Senior Secured Notes from "B1" with a stable outlook
to "Ba3" with a stable outlook
- Level 3 assets, comprised of auction rate securities, were
$31.8 million as of September 30, 2021 compared with $30.7 million as of September 30, 2020
- Compensation expense as a percentage of revenue was lower at
65.4% during the current quarter versus 68.7% last year
- The effective tax rate for the current quarter was 29.8%
compared with 28.0% for the prior year period due to favorable
permanent items in the third quarter of 2020
Coronavirus ("COVID-19") Pandemic
The Company continues to monitor the effects of the pandemic
both on a national level as well as regionally and locally and is
responding accordingly. In addition, we continue to provide
frequent communications to clients, employees, and regulators. We
have adopted enhanced cleaning practices and other health protocols
in our offices and taken measures to significantly restrict
non-essential business travel and have practices in place to
mandate that employees who may have been exposed to COVID-19, or
show any relevant symptoms, self-quarantine. In early March 2020, the Company executed on its Business
Continuity Plan whereby the vast majority of our employees began to
work remotely with only "essential" employees reporting to our
offices. We accomplished this by significantly expanding the use of
technology infrastructure that facilitates remote operations. Our
ability to avoid significant business disruptions was reliant on
the continued ability to have the vast majority of employees work
remotely. Due to the widespread distribution and inoculation of the
U.S. population with vaccines that have proven to be safe and
effective, the Company implemented a re-entry plan for our fully
vaccinated employees at our corporate headquarters in New York City on October 4, 2021. For employees outside of our
corporate headquarters, the Company will be implementing a re-entry
plan for other locations in the U.S. that will be in accordance
with applicable state and local regulations. Vaccinated employees
have begun re-engaging with clients and traveling for business
purposes.
Company Information
Oppenheimer Holdings Inc., through its operating subsidiaries,
is a leading middle market investment bank and full service
broker-dealer that is engaged in a broad range of activities in the
financial services industry, including retail securities brokerage,
institutional sales and trading, investment banking (corporate and
public finance), equity and fixed income research, market-making,
trust services, and investment advisory and asset management
services. With roots tracing back to 1881, the Company is
headquartered in New York and has
92 retail branch offices in the United
States and institutional businesses located in London, Tel
Aviv, and Hong Kong.
Forward-Looking Statements
This press release includes certain "forward-looking statements"
relating to anticipated future performance including the projected
impact of COVID-19 on the Company's business, financial
performance, and operating results. The following factors, among
others, could cause actual results to vary from the forward-looking
statements: the severity and duration of COVID-19; COVID-19's
impact on the U.S. and global economies; and Federal, state and
local governmental responses to COVID-19. For a discussion of other
factors that could cause future performance to be different than
anticipated, reference is made to Factors Affecting
"Forward-Looking Statements" and Part 1A – Risk Factors in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2020.
Oppenheimer
Holdings Inc.
|
Consolidated
Income Statements (Unaudited)
|
('000s, except
number of shares and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
September
30,
|
|
For the Nine
Months Ended
September
30,
|
|
|
2021
|
|
|
2020
|
|
|
%
Change
|
|
2021
|
|
|
2020
|
|
|
%
Change
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions
|
$
|
90,889
|
|
|
$
|
92,241
|
|
|
(1.5)
|
|
$
|
300,531
|
|
|
$
|
297,126
|
|
|
1.1
|
|
Advisory
fees
|
116,751
|
|
|
88,595
|
|
|
31.8
|
|
332,399
|
|
|
250,740
|
|
|
32.6
|
|
Investment
banking
|
86,901
|
|
|
66,245
|
|
|
31.2
|
|
316,144
|
|
|
138,159
|
|
|
128.8
|
|
Bank deposit sweep
income
|
3,909
|
|
|
4,619
|
|
|
(15.4)
|
|
11,629
|
|
|
30,567
|
|
|
(62.0)
|
|
Interest
|
9,340
|
|
|
7,540
|
|
|
23.9
|
|
26,915
|
|
|
24,650
|
|
|
9.2
|
|
Principal
transactions, net
|
4,494
|
|
|
7,703
|
|
|
(41.7)
|
|
21,664
|
|
|
18,899
|
|
|
14.6
|
|
Other
|
3,058
|
|
|
9,316
|
|
|
(67.2)
|
|
19,635
|
|
|
15,618
|
|
|
25.7
|
|
Total
revenue
|
315,342
|
|
|
276,259
|
|
|
14.1
|
|
1,028,917
|
|
|
775,759
|
|
|
32.6
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
206,312
|
|
|
189,654
|
|
|
8.8
|
|
693,053
|
|
|
526,924
|
|
|
31.5
|
|
Communications and
technology
|
19,718
|
|
|
19,474
|
|
|
1.3
|
|
59,497
|
|
|
60,689
|
|
|
(2.0)
|
|
Occupancy and
equipment costs
|
14,964
|
|
|
15,199
|
|
|
(1.5)
|
|
45,371
|
|
|
46,611
|
|
|
(2.7)
|
|
Clearing and exchange
fees
|
5,237
|
|
|
6,211
|
|
|
(15.7)
|
|
16,667
|
|
|
18,061
|
|
|
(7.7)
|
|
Interest
|
2,468
|
|
|
3,461
|
|
|
(28.7)
|
|
7,563
|
|
|
12,901
|
|
|
(41.4)
|
|
Other
|
29,249
|
|
|
20,542
|
|
|
42.4
|
|
74,077
|
|
|
55,368
|
|
|
33.8
|
|
Total
expenses
|
277,948
|
|
|
254,541
|
|
|
9.2
|
|
896,228
|
|
|
720,554
|
|
|
24.4
|
Pre-Tax
Income
|
37,394
|
|
|
21,718
|
|
|
72.2
|
|
132,689
|
|
|
55,205
|
|
|
140.4
|
Income
taxes
|
11,144
|
|
|
6,079
|
|
|
83.3
|
|
36,622
|
|
|
14,099
|
|
|
159.7
|
Net
income
|
$
|
26,250
|
|
|
$
|
15,639
|
|
|
67.8
|
|
$
|
96,067
|
|
|
$
|
41,106
|
|
|
133.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
2.07
|
|
|
$
|
1.25
|
|
|
65.6
|
|
$
|
7.59
|
|
|
$
|
3.24
|
|
|
134.3
|
|
Diluted
|
$
|
1.92
|
|
|
$
|
1.19
|
|
|
61.3
|
|
$
|
7.10
|
|
|
$
|
3.12
|
|
|
127.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
12,690,386
|
|
|
12,553,802
|
|
|
1.1
|
|
12,653,310
|
|
12,696,143
|
|
(0.3)
|
|
Diluted
|
13,664,214
|
|
|
13,146,586
|
|
|
3.9
|
|
13,539,373
|
|
13,194,434
|
|
2.6
|
View original
content:https://www.prnewswire.com/news-releases/oppenheimer-holdings-inc-reports-third-quarter-2021-earnings-301411364.html
SOURCE Oppenheimer Holdings Inc.