Oppenheimer Holdings Inc. Reports Third Quarter 2013 Earnings and Announces Quarterly Dividend

Oppenheimer Holdings Inc. Reports Third Quarter 2013 Earnings and Announces 
Quarterly Dividend 
NEW YORK, Oct. 25, 2013 /CNW/ - Oppenheimer Holdings Inc. (NYSE: OPY) today 
reported net income of $5.2 million or $0.38 per share for the third quarter 
of 2013 compared with net income of $2.3 million or $0.17 per share for the 
third quarter of 2012, an increase of 125.5%. Revenue for the third quarter 
of 2013 was $243.4 million compared with $231.8 million in the third quarter 
of 2012, an increase of 5.0%. 
                                                                  


                             Summary Operating Results (Unaudited)

  ('000s,
  except
  Earnings
  Per Share
  and Book
  Value Per
  Share)                                                             
                  For the 3-Months Ended           For the 9-Months Ended
                                      %
                9/30/13   9/30/12   Δ     9/30/13   9/30/12    % Δ

  Revenue     $ 243,376 $ 231,838      5.0   $ 726,352 $  703,197        3.3

  Net Income
  ((1))       $   5,237 $   2,322    125.5   $  11,748 $       87   13,403.4

  Earnings
  Per Share(
  (1))                                                               
     Basic    $    0.38 $    0.17    123.5   $    0.86 $     0.01    8,500.0
     Diluted  $    0.37 $    0.16    131.3   $    0.83 $     0.01    8,200.0

  Weighted
  Average #
  of Common
  Shares
  Outstanding                                                        
     Basic       13,604    13,611    (0.1)      13,607     13,599        0.1
     Diluted     14,172    14,161      0.1      14,110     13,937        1.2
                              As of:                           As of:
                                      %
                9/30/13   9/30/12   Δ     9/30/13   12/31/12   % Δ


 Book
  Value Per
  Share       $   37.68 $   37.10      1.6   $   37.68 $    36.80        2.4 
 Tangible
  Book Value
  Per Share   $   25.16 $   24.60      2.3   $   25.16 $    24.34        3.4 
(1) Attributable to Oppenheimer Holdings Inc. 
The economy continued to improve during the third quarter of 2013. While the 
ongoing purchases of bonds by the Federal Reserve during the period continued 
to improve liquidity, the uncertainty surrounding the timing of the reduction 
in the central bank's bond purchasing program held down volumes during the 
quarter. The Federal Reserve's decision at the end of the quarter to continue 
its bond purchases drove U.S. equity markets back towards historic highs. 
The quarter ended with the S&P 500 Index up 4.7% on lower trading volumes and 
volatility. At the end of the third quarter, fixed income yields declined as 
a result of the Federal Reserve decision against "tapering" combined with a 
flight to safety near quarter end in anticipation of a government shutdown due 
to lack of a budget and concerns over the near term debt ceiling negotiations. 
Albert G. Lowenthal, Chairman and CEO, said "We are pleased with the continued 
improvement in our operating results. Higher equity valuations and client 
investment flows helped produce another record period for our asset management 
fee-based programs. An increase in equity issuance led to a solid quarter 
for our equity capital markets business. The commercial mortgage banking 
business continued its strong performance as loan origination volumes 
increased. However, the decrease in corporate finance fees from investment 
banking activities during the period negatively affected operating results. 
The recent government shutdown and threat of default by the federal government 
sowed considerable market volatility both as it began and as it was resolved, 
at least for the short term. The continued growth of the economy may lead the 
Federal Reserve to begin tapering by year end. It seems unlikely that this 
action will disrupt markets given the increase in interest rates since May. 
We continue to be optimistic about the business environment and believe that 
we are extremely well positioned to participate in the upside of a sustained 
economic recovery." 
Financial Highlights 


    --  Commission revenue was $120.3 million for the third quarter of
        2013, an increase of 6.0% compared with the third quarter of
        2012.
    --  Principal transactions revenue decreased 28.0% to $10.3 million
        during the third quarter of 2013 compared with the third
        quarter of 2012 due to a reduction of trading profits
        associated with corporate and municipal bonds, resulting from
        concerns of market participants over tapering and, as a result,
        their reluctance to transact during the period.
    --  Investment banking revenue was down 1.1% to $21.4 million for
        the third quarter of 2013 compared with $21.6 million during
        the third quarter of 2012 due to lower corporate finance
        activity in the 2013 quarter.
    --  Advisory fees were $60.1 million during the third quarter of
        2013, an increase of 13.4% compared with the third quarter of
        2012.
                                                                     
                                                                                  
                                      Business Segment Results (Unaudited)
                                                                                  
                                For the 3-Months Ended         For the 9-Months Ended


                                                %                              %
  ('000s)                   9/30/13    9/30/12    Δ   9/30/13    9/30/12    Δ 
Revenue                                                                          


          Private Client  $  144,316 $  133,798      7.9 $  430,963 $  406,530      6.0
          Asset
          Management          21,488     19,812      8.5     64,450     58,848      9.5
          Capital Markets     68,460     68,587    (0.2)    201,495    209,477    (3.8)
          Commercial
          Mortgage
          Banking              9,314      8,738      6.6     26,857     27,726    (3.1)
          Corporate/Other      (202)        903        *      2,587        616    320.1
                             243,376    231,838      5.0    726,352    703,197      3.3

  Income Before Income
  Taxes                                                                           
          Private Client      15,088     11,825     27.6     48,113     39,557     21.6
          Asset
          Management           6,387      4,129     54.7     20,332     13,225     53.7
          Capital Markets      4,301      3,474     23.8      8,806      4,479     96.6
          Commercial
          Mortgage
          Banking              2,823      3,155   (10.5)      7,977     11,985   (33.4)
          Corporate/Other   (20,436)   (17,325)     18.0   (64,678)   (62,638)      3.3
                          $    8,163 $    5,258     55.2 $   20,550 $    6,608    211.0

* Not comparable

Private Client

Private Client reported revenue of $144.3 million for the third quarter of 
2013, 7.9% higher than the third quarter of 2012. Income before income taxes 
was $15.1 million, an increase of 27.6% compared with the third quarter of 
2012, driven by increases in both transactional and fee-based business during 
the third quarter of 2013 compared with the same period of 2012. Operating 
results for Private Client were negatively impacted by litigation expenses of 
$2.3 million during the third quarter of 2013.
    --  Client assets under administration were $81.8 billion at
        September 30, 2013.
    --  Financial Advisor headcount was 1,400 at the end of the
        quarter, down from 1,423 from the prior year period.
    --  Retail commissions were $80.2 million for the quarter, an
        increase of 1.5% over the prior year quarter.
    --  Advisory fee revenue on traditional and alternative managed
        products was $39.3 million for the third quarter of 2013, an
        increase of 18.5% over the prior year quarter (see Asset
        Management below for further information).
    --  The impact of money market fee waivers reduced revenue by $7.9
        million during the third quarter of 2013 versus $6.3 million
        during the third quarter of 2012.

Asset Management

Asset Management reported revenue of $21.5 million for the third quarter of 
2013, 8.5% higher than the third quarter of 2012. Income before income taxes 
was $6.4 million, an increase of 54.7% compared with the third quarter of 
2012, as a result of increased fees earned on managed products as well as 
lower legal costs.
    --  Advisory fee revenue on traditional and alternative managed
        products was $19.8 million for the third quarter of 2013, an
        increase of 11.0% over the prior year quarter.  Asset
        management fees are calculated based on client assets under
        management ("AUM") at the end of the prior quarter which
        totaled $22.5 billion at June 30, 2013 ($20.1 billion at June
        30, 2012) and are allocated to the Private Client and Asset
        Management Divisions.
    --  AUM increased 12.8% to $23.8 billion at September 30, 2013, a
        record for the Company, compared to $21.1 billion at September
        30, 2012, which is the basis for advisory fee billings for the
        fourth quarter of 2013.  The increase in AUM was comprised of
        asset appreciation of $1.6 billion and net new assets of $1.1
        billion.

Capital Markets

Capital Markets reported revenue of $68.5 million for the third quarter of 
2013, 0.2% lower than the third quarter of 2012. Income before income taxes 
was $4.3 million during the third quarter of 2013 compared with $3.5 million 
during the third quarter of 2012, as higher compensation costs were offset by 
a reduction in occupancy and interest costs.
    --  Institutional equities commissions were $26.8 million for the
        third quarter of 2013, an increase of 8.6% compared with the
        prior year period.
    --  Advisory fees from investment banking activities decreased
        72.5% to $3.2 million in the third quarter of 2013 compared
        with the prior year period.
    --  Equity underwriting fees increased $7.7 million to $13.6
        million for the third quarter of 2013 compared with the prior
        year period.
    --  Revenue from Taxable Fixed Income increased 5.3% to $19.8
        million for the third quarter of 2013 compared with the prior
        year period.
    --  Public Finance and Municipal Trading revenue was down 34.6% to
        $5.3 million for the third quarter of 2013 compared with the
        prior year period primarily due to a reduction of municipal
        bond trading profits.

Commercial Mortgage Banking

Commercial Mortgage Banking reported revenue of $9.3 million for the third 
quarter of 2013, 6.6% higher than the third quarter of 2012, due to an 
increase in the dollar volume of loans originated during the current period. 
Income before income taxes was $2.8 million, a decrease of 10.5% compared with 
the third quarter of 2012.
    --  Loan origination fees for the third quarter of 2013 were $2.7
        million as the Company originated 18 commercial loans with an
        aggregate principal loan balance of $193.0 million.
    --  Net servicing revenue for the third quarter of 2013 was $1.3
        million compared with $1.1 million for the comparable period in
        2012.
    --  Principal loan balances related to servicing activities totaled
        $3.9 billion at September 30, 2013, up 12.5% from September 30,
        2012.

Compensation and Benefit Expenses

Compensation and benefits (including salaries, production and incentive 
compensation, share-based compensation, deferred compensation, and other 
benefit-related items) totaled $161.1 million during the third quarter of 
2013, an increase of 6.0% over the third quarter of 2012. Compensation as a 
percentage of revenue was 66.2% during the third quarter of 2013 compared to 
65.6% during the third quarter of 2012. Higher salary expense and 
production-related compensation contributed to the increase as well as an 
increase in deferred compensation costs. Deferred compensation expense was 
partially offset by increases in the value of assets underlying the deferred 
compensation plans. These increased compensation costs during the period were 
offset by lower current incentive compensation costs.

Non-Compensation Expenses

Non-compensation expenses were $74.1 million during the third quarter of 2013, 
relatively flat compared to $74.6 million during the same period last year. 
Higher communications and technology costs were largely offset by lower 
occupancy and equipment costs during the third quarter of 2013 compared to the 
same period last year.

Provision for Income Taxes

The effective income tax rate for the third quarter of 2013 was 32.5% compared 
with 42.5% for the prior year third quarter primarily due to higher nontaxable 
benefits received during the third quarter of 2013 with respect to life 
insurance on certain employees of which the Company is the beneficiary.

Balance Sheet and Liquidity
    --  At September 30, 2013, total equity was $515.3 million compared
        with $505.0 million at December 31, 2012.
    --  At September 30, 2013, book value per share was $37.68
        (compared with $36.80 at December 31, 2012) and tangible book
        value per share was $25.16 (compared with $24.34 at December
        31, 2012).
    --  The Company's level 3 assets were $86.8 million at September
        30, 2013 (compared with $85.4 million at December 31, 2012).

Dividend Announcement
    --  The Company today announced a quarterly dividend in the amount
        of $0.11 per share, payable on November 22, 2013 to holders of
        Class A non-voting and Class B voting common stock of record on
        November 8, 2013.

Company Information

Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading 
middle market investment bank and full service broker-dealer that provides a 
wide range of financial services including retail securities brokerage, 
institutional sales and trading, investment banking (both corporate and public 
finance), research, market-making, trust, investment management, and 
commercial mortgage. With roots tracing back to 1881, the firm is 
headquartered in New York and has 96 offices in 25 states and 5 foreign 
jurisdictions.

Forward-Looking Statements

This press release includes certain "forward-looking statements" relating to 
anticipated future performance. For a discussion of the 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 Oppenheimer's Annual Report on Form 10-K for the year ended December 31, 
2012.
                                                                
                                   Oppenheimer Holdings Inc.
               Quarterly Consolidated Income Statement (unaudited)

  ('000s, except
  EPS)                                                          
                   For the 3-Months Ended       For the 9-Months Ended
                                      %
                  9/30/13  9/30/12  Δ   9/30/13  9/30/12  % Δ

  REVENUE                                                       
     Commissions  $120,252 $113,424    6.0   $364,272 $351,487      3.6


 Principal
  transactions,
  net               10,347   14,372 (28.0)     33,596   40,387   (16.8) 
 Interest       14,439   14,823  (2.6)     39,916   42,462    (6.0) 
 Investment
  banking           21,362   21,589  (1.1)     62,377   66,647    (6.4) 
 Advisory
  fees              60,117   53,015   13.4    177,417  156,796     13.2 


     Other          16,859   14,615   15.4     48,774   45,418      7.4
                   243,376  231,838    5.0    726,352  703,197      3.3
                                                                

  EXPENSES                                                      


 Compensation
  and related
  expenses         161,081  151,969    6.0    480,296  461,516      4.1 
 Clearing and
  exchange fees      6,099    6,026    1.2     18,434   18,046      2.2 

  Communications
  and technology    16,999   15,880    7.0     48,881   47,346      3.2 
 Occupancy
  and equipment
  costs             16,405   17,526  (6.4)     51,111   59,279   (13.8) 


     Interest        6,164    8,842 (30.3)     20,169   25,864   (22.0)
     Other          28,465   26,337    8.1     86,911   84,538      2.8
                   235,213  226,580    3.8    705,802  696,589      1.3
                                                                

  Income before
  income taxes       8,163    5,258   55.2     20,550    6,608    211.0

  Income tax
  provision          2,655    2,234   18.8      8,083    4,092     97.5

  Net income for
  the period         5,508    3,024   82.1     12,467    2,516    395.5

  Less net income
  attributable to
  non-controlling
  interest, net
  of tax               271      702 (61.4)        719    2,429   (70.4)

  Net income
  attributable to
  Oppenheimer
  Holdings Inc.     $5,237   $2,322  125.5    $11,748      $87 13,403.4
                                                                

  Earnings per
  share
  attributable to
  Oppenheimer
  Holdings Inc.                                                 
     Basic           $0.38    $0.17  123.5      $0.86    $0.01  8,500.0
     Diluted         $0.37    $0.16  131.3      $0.83    $0.01  8,200.0
                                                                

  Weighted
  Average Number
  of Common
  Shares
  Outstanding                                                   
     Basic          13,604   13,611  (0.1)     13,607   13,599      0.1
     Diluted        14,172   14,161    0.1     14,110   13,937      1.2
                            





SOURCE  Oppenheimer Holdings Inc. 
Jeffrey Alfano 212-825-4331 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/October2013/25/c7131.html 
CO: Oppenheimer Holdings Inc.
ST: New York
NI: FIN ERN DIV  
-0- Oct/25/2013 12:58 GMT
 
 
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