Oppenheimer Holdings Inc. Reports Fourth Quarter and Full Year 2013 Earnings and Announces Quarterly Dividend

 Oppenheimer Holdings Inc. Reports Fourth Quarter and Full Year 2013 Earnings
                       and Announces Quarterly Dividend

PR Newswire

NEW YORK, Jan. 31, 2014

NEW YORK, Jan. 31, 2014 /PRNewswire/  - Oppenheimer Holdings Inc. (NYSE:  OPY) 
today reported net income of $13.3 million  or $0.99 per share for the  fourth 
quarter of 2013 compared with a net loss of $3.7 million or ($0.27) per  share 
for the fourth quarter of  2012. Revenue for the  fourth quarter of 2013  was 
$293.4 million compared with $249.4 million in the fourth quarter of 2012,  an 
increase of 17.6%. The Company's results for the fourth quarter of 2013  were 
significantly impacted  by  gross performance  (or  incentive) fees  of  $33.3 
million before  internal  and  external expenses  earned  from  the  Company's 
participation in hedge funds in its asset management business.

For the year ended December 31, 2013, the Company reported net income of $25.1
million or $1.85 per share compared with a net loss of $3.6 million or ($0.27)
per share for the year  ended December 31, 2012.  Revenue for the year  ended 
December 31, 2013 was $1.02 billion compared with $952.6 million for the  year 
ended December 31, 2012, an increase of 7.0%.

                                                             
                    Summary Operating Results (Unaudited)
('000s, except
Earnings Per                                                  
Share and Book
Value Per Share)
                    For the 3-Months Ended        For the 12-Months Ended
                 12/31/13   12/31/12   % Δ    12/31/13   12/31/12  % Δ
Revenue          $         $                  $           $
                     293,362    249,415    17.6     1,019,714    952,612   7.0
Net Income       $           $                  $           $
(Loss)^(1)            13,313    (3,700)     *        25,061    (3,613)   *
Earnings (Loss)                                          
Per Share^(1)                                                           
Basic       $      0.99 $   (0.27)    *  $      1.85 $   (0.27)   *
Diluted     $      0.94 $   (0.27)    *  $      1.77 $   (0.27)   *
Weighted Average
# of Common                                              
Shares
Outstanding                                                             
Basic           13,492    13,611  (0.9)      13,578    13,602 (0.2)
Diluted         14,143    13,611    3.9      14,124    13,602   3.8
                                                                 
                            As of:                                    
                 12/31/13   12/31/12   % Δ                          
Book Value  $           $                             
Per Share              38.77      36.80     5.4                            
Tangible
Book Value Per   $           $                             
Share                  26.19      24.34     7.6                            

(1) Attributable to Oppenheimer Holdings Inc.
* Not comparable

The Federal  Reserve's decision  late  in the  fourth  quarter to  reduce  its 
ongoing bond purchases fueled a rally in the equity markets. The U.S.  equity 
markets closed strong for the quarter and for the year as the S&P 500 returned
9.9% and 32.2%, respectively.  This was the largest  annual gain for the  S&P 
500 in 16  years. The underpinnings  of the rally  were based on  improvements 
seen  in  economic  data,  continued  low  interest  rates  coupled  with  low 
inflationary expectations, and high levels of liquidity fueled by the  Federal 
Reserve's bond purchases. The  U.S. economy experienced  a rebound in  housing 
and auto sales, and increased levels  of consumer spending, with lower  levels 
of unemployment. These changes in the real economy as well as indications  of 
increased accommodation in  Washington towards  the adoption of  a budget  and 
permitting an increase  in the  U.S. debt  limit which  together provided  the 
positive sentiment to  push stock  indices to record  levels. A  significantly 
different picture existed within the fixed income markets. Negative returns in
fixed income securities for the fourth quarter and for the year ended December
31, 2013  were propelled  by  expectations of  a  growing economy  and  higher 
interest rates on longer term securities as the Federal Reserve announced  its 
intentions to begin tapering from its economic programs.

Albert G. Lowenthal, Chairman and CEO, stated "we are happy to finish the year
on a positive note as our business continues to benefit from the strong equity
markets and improvements made  across the business as  we continue to  develop 
our franchise. The Company produced revenue in excess of $1 billion for  only 
the second  time in  its history.  The Private  Client and  Asset  Management 
businesses continue to  offer innovative strategies  and create  opportunities 
that attract new assets to  the platform. This momentum  has led to a  record 
year in  both  client assets  under  administration and  client  assets  under 
management. The  Capital Markets  businesses have  gone through  a period  of 
transformation and are now better positioned to serve our middle market client
base. The fourth quarter was significantly impacted by incentive fees  earned 
from client investments  in hedge funds  in which the  Company is the  general 
partner. Such amounts, while reflective of a full year's performance, are only
earned at year-end based on the  full year's performance. The decline in  the 
operating results of the Commercial  Mortgage Banking business was the  result 
of reduced mortgage refinancing  activity and re-entry  of competition in  the 
commercial mortgage  market. We  are seeing  the return  of investors  to  the 
equity markets  as  the  fixed  income market  experienced  record  sales  and 
redemptions in favor of variable  rate investments and higher yielding  equity 
securities. This together  with our  continued investment  in capital  markets 
expertise should pay increasing returns as the competitive environment  begins 
to favor  middle market  firms who  can provide  higher levels  of service  to 
corporate and individual clients. The Company has turned the corner from some
of the legacy legal  and regulatory issues arising  from the financial  crisis 
and is positioned extremely well to participate in the continued upturn in the
economy and the resulting increased sentiment for capital raising."

Financial Highlights for the Fourth Quarter and Full Year

  *Commission revenue was $122.5 million for the fourth quarter of 2013, an
    increase of 3.5% compared with the fourth quarter of 2012. For the year
    ended December 31, 2013, commission revenue was $486.8 million compared
    with $469.9 million for the comparable period last year, an increase of
    3.6%.

  *Principal transactions revenue decreased 26.9% to $10.2 million during the
    fourth quarter of 2013 compared with the fourth quarter of 2012 due to a
    reduction of trading profits associated with corporate and municipal bonds
    as well as losses in government bonds. For the year ended December 31,
    2013, principal transactions revenue was $43.8 million compared with $54.3
    million for the comparable period last year, a decrease of 19.4%.

  *Investment banking revenue was up 55.9% to $35.6 million for the fourth
    quarter of 2013 compared with $22.8 million for the fourth quarter of 2012
    due to increased fees from equity underwritings during the 2013 quarter.
    For the year ended December 31, 2013, investment banking revenue was $98.0
    million compared with $89.5 million for the comparable period last year,
    an increase of 9.5%.

  *Advisory fees were $96.8 million during the fourth quarter of 2013, an
    increase of 46.7% compared with the fourth quarter of 2012 due to
    increased management and performance fees earned on managed products. For
    the year ended December 31, 2013, advisory fees were $274.2 million
    compared with $222.7 million for the comparable period last year, an
    increase of 23.1%.

                                                                      
                        Business Segment Results (Unaudited)
                                                                      
                       For the 3-Months Ended          For the 12-Months Ended
('000s)               12/31/13  12/31/12   % Δ    12/31/13   12/31/12   % Δ
Revenue                                                                
Private Client $         $                  $           $          
                        169,108    144,267    17.2       600,071    550,797      8.9
Asset                                                            
Management               37,764     25,312    49.2       102,214     84,160     21.5
Capital Markets    79,882    73,662    8.4     281,377   283,139   (0.6)
Commercial                                                       
Mortgage Banking          7,287      7,956   (8.4)        34,144     35,682    (4.3)
Corporate/Other     (679)   (1,782)   61.9       1,908   (1,166)     *
                                                                    
                        293,362    249,415    17.6     1,019,714    952,612      7.0
Income (Loss) Before                                                  
Income Taxes                                                                  
Private Client    17,811    13,930   27.9      65,924    53,487    23.3
Asset                                                            
Management               20,619     12,211    68.9        40,951     25,436     61.0
Capital Markets   (1,838)  (19,803)   90.7       6,968  (15,324)     *
Commercial                                                       
Mortgage Banking          3,436      3,282     4.7        11,413     15,267   (25.2)
Corporate/Other  (16,669)  (16,755)    0.5    (81,347)  (79,393)   (2.5)
                    $   23,359 $  (7,135)    *  $    43,909 $    (527)     *

* Not comparable

FOURTH QUARTER 2013 RESULTS

Private Client

Private Client reported revenue  of $169.1 million for  the fourth quarter  of 
2013, 17.2% higher  than the  fourth quarter  of 2012.  Income before  income 
taxes was $17.8 million, an increase of 27.9% compared with the fourth quarter
of 2012,  driven by  increases in  both transactional  and fee-based  business 
during the fourth quarter of 2013 compared with the same period of 2012.  The 
fee-based business includes both management and performance fees which were up
$7.3 million and $12.0 million, respectively, over the fourth quarter of 2012.

  *Client assets under administration were $84.6 billion at December 31,
    2013, a record for the Company.

  *Financial Advisor headcount was 1,388 at the end of the fourth quarter of
    2013, down from 1,406 at the end of the prior year.

  *Retail commissions were $81.9 million for the fourth quarter of 2013, a
    decrease of 1.0% from the prior year quarter.

  *Advisory fee revenue on traditional and alternative managed products was
    $60.4 million for the fourth quarter of 2013, an increase of 44.1% over
    the prior year quarter (see Asset Management below for further
    information).

  *Performance fees from the participation in hedge funds were $17.8 million
    for the fourth quarter of 2013 compared with $5.9 million for the fourth
    quarter of 2012, an increase of 201.7%. Performance fees, allocated to
    this business segment, are computed at the underlying fund's year-end when
    the measurement period ends and generally are earned in the fourth quarter
    of the Company's fiscal year.

  *Money market fees were reduced by waivers in the amount of $8.1 million
    during the fourth quarter of 2013 versus waivers of $6.6 million during
    the fourth quarter of 2012.

Asset Management

Asset Management reported revenue of $37.8  million for the fourth quarter  of 
2013, 49.2% higher  than the  fourth quarter  of 2012.  Income before  income 
taxes was $20.6 million, an increase of 68.9% compared with the fourth quarter
of 2012, as a  result of increased management  and performance fees earned  on 
managed products.

  *Advisory fee revenue on traditional and alternative managed products was
    $36.4 million for the fourth quarter of 2013, an increase of 51.4% 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 $23.8 billion at September 30, 2013 ($21.1 billion at
    September 30, 2012) and are allocated to the Private Client and Asset
    Management Divisions.

  *AUM increased 21.2% to $25.3 billion at December 31, 2013, a record for
    the Company, compared to $20.9 billion at December 31, 2012, which is the
    basis for advisory fee billings for the first quarter of 2014. The
    increase in AUM was comprised of asset appreciation of $3.0 billion and
    net new assets of $1.4 billion.

  *Performance fees from the participation in hedge funds were $15.5 million
    for the fourth quarter of 2013 compared with $4.9 million for the fourth
    quarter of 2012, an increase of 216.3%. Performance fees, allocated to
    this business segment, are computed at the underlying fund's year-end when
    the measurement period ends and generally are earned in the fourth quarter
    of the Company's fiscal year.

Capital Markets

Capital Markets reported revenue  of $79.9 million for  the fourth quarter  of 
2013, 8.4% higher than the fourth quarter  of 2012 due to increased fees  from 
equity underwritings offset by lower principal transaction revenue during  the 
fourth quarter of  2013. Loss before  income taxes was  $1.8 million for  the 
fourth quarter  of 2013  compared with  a loss  before income  taxes of  $19.8 
million for  the fourth  quarter  of 2012  which  was negatively  impacted  by 
increased litigation  costs  associated  with an  arbitration  award  rendered 
against the Company  in an  auction rate securities-related  matter offset  by 
non-cash adjustments related to contingent  consideration issued as part of  a 
prior acquisition.

  *Institutional equities commissions were $28.0 million for the fourth
    quarter of 2013, an increase of 16.4% compared with the prior year period.

  *Advisory fees from investment banking activities increased 21.3% to $10.2
    million in the fourth quarter of 2013 compared with the prior year period.

  *Equity underwriting fees increased 92.4% to $19.5 million for the fourth
    quarter of 2013 compared with the prior year period.

  *Revenue from Taxable Fixed Income decreased 17.0% to $19.0 million for the
    fourth quarter of 2013 compared with the prior year period.

  *Public Finance and Municipal Trading revenue was down 45.1% to $5.1
    million for the fourth quarter of 2013 compared with the prior year
    period.

Commercial Mortgage Banking

Commercial Mortgage Banking reported  revenue of $7.3  million for the  fourth 
quarter of 2013, 8.4% lower than the fourth quarter of 2012, due to a decrease
in the dollar  volume of  loans originated during  the 2013  period offset  by 
adjustments made for  unfunded loan  commitments extended and  changes in  the 
value of mortgage servicing rights  ("MSRs"). Income before income taxes  was 
$3.4 million, an increase of 4.7% compared with the fourth quarter of 2012.

  *Loan origination fees for the fourth quarter of 2013 were $829,000 as the
    Company originated seven commercial loans with an aggregate principal loan
    balance of $86.5 million.

  *Net servicing revenue for the fourth quarter of 2013 was $1.3 million
    compared with $1.2 million for the comparable period in 2012.

  *Principal loan balances related to servicing activities totaled $3.9
    billion at December 31, 2013, up 14.7% from December 31, 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  $195.6 million  during the  fourth quarter  of 
2013, an increase of 18.6% over the fourth quarter of 2012. Compensation as a
percentage of revenue was 66.7% during the fourth quarter of 2013 compared  to 
66.1% during the fourth  quarter of 2012.  An increase in  production-related 
compensation contributed to  much of  the increase due  to payouts  associated 
with higher management and performance fees on managed products.  Share-based 
compensation increased due to the increase in the value of stock  appreciation 
rights  associated  with   the  Company's  stock.   Incentive  and   deferred 
compensation also increased during the period.

Non-Compensation Expenses

Non-compensation expenses  were $74.4  million during  the fourth  quarter  of 
2013, a decrease  of 18.9% compared  to $91.7 million  during the same  period 
last  year  which  was  negatively  impacted  by  increased  litigation  costs 
associated with  an  arbitration award  rendered  against the  Company  in  an 
auction rate securities-related matter.

Provision for Income Taxes

The effective  income  tax rate  for  the fourth  quarter  of 2013  was  41.4% 
compared with 52.8% for  the prior year fourth  quarter which reported a  loss 
and was  positively  impacted  by  investment tax  credits  related  to  state 
investment and employment incentives.

FULL-YEAR 2013 RESULTS

Private Client

Private Client reported revenue of $600.1 million for the year ended  December 
31, 2013, 8.9% higher  than the year ended  December 31, 2012. Income  before 
income taxes was $65.9  million, an increase of  23.3% compared with the  year 
ended December  31,  2012,  driven  by increases  in  both  transactional  and 
fee-based business during the year ended  December 31, 2013 compared with  the 
same period  of 2012.  The fee-based  business includes  both management  and 
performance fees which were up $23.8 million and $11.9 million,  respectively, 
over the same period in 2012. Performance fees are computed at the underlying
fund's year-end when the measurement period  ends and generally are earned  in 
the fourth quarter of the Company's fiscal year.

  *Retail commissions were $326.1 million for the year ended December 31,
    2013, an increase of 0.4% over the prior year period.

  *Advisory fee revenue on traditional and alternative managed products was
    $177.4 million for the year ended December 31, 2013, an increase of 23.4%
    over the prior year period (see Asset Management below for further
    information).

  *Performance fees from the participation in hedge funds were $17.8 million
    for the year ended 2013 compared with $5.9 million over the prior period,
    an increase of 203.1%. Performance fees, allocated to this business
    segment, are computed at the underlying fund's year-end when the
    measurement period ends and generally are earned in the fourth quarter of
    the Company's fiscal year.

  *Money market fees were reduced by waivers in the amount of $30.4 million
    during the year ended December 31, 2013 versus waivers of $24.8 million
    during the year ended December 31, 2012.

Asset Management

Asset Management  reported  revenue  of  $102.2 million  for  the  year  ended 
December 31, 2013, 21.5% higher than the year ended December 31, 2012. Income
before income taxes was $41.0 million, an increase of 61.0% compared with  the 
same period of 2012, as a result of increased management and performance  fees 
earned on managed products.

  *Advisory fee revenue on traditional and alternative managed products was
    $96.8 million for the year ended 2013, an increase of 22.5% over the prior
    year period.

  *Performance fees from the participation in hedge funds were $15.5 million
    for the year ended December 31, 2013 compared with $4.9 million for the
    year ended December 31, 2012, an increase of 216.3%. Performance fees,
    allocated to this business segment, are computed at the underlying fund's
    year-end when the measurement period ends and generally are earned in the
    fourth quarter of the Company's fiscal year.

Capital Markets

Capital Markets reported revenue of $281.4 million for the year ended December
31, 2013, 0.6%  lower than the  year ended December  31, 2012. Income  before 
income taxes was $7.0  million for the year  ended December 31, 2013  compared 
with a loss before income taxes of $15.3 million for the same period of  2012, 
due to higher equity underwriting fees and lower litigation costs.

  *Institutional equities commissions were $106.5 million for the year ended
    December 31, 2013, an increase of 2.7% compared with the prior year
    period.

  *Advisory fees from investment banking activities decreased 30.5% to $27.1
    million in the year ended December 31, 2013 compared with the prior year
    period.

  *Equity underwriting fees increased $15.7 million or 43.8% to $51.4 million
    for the year ended December 31, 2013 compared with the prior year period.

  *Revenue from Taxable Fixed Income decreased 3.7% to $80.8 million for the
    year ended December 31, 2013 compared with the prior year period.

  *Public Finance and Municipal Trading revenue was down 19.1% to $21.9
    million for the year ended December 31, 2013 compared with the prior year
    period.

Commercial Mortgage Banking

Commercial Mortgage Banking  reported revenue  of $34.1 million  for the  year 
ended December 31, 2013, 4.3% lower than the year ended December 31, 2012, due
to a decrease in the dollar volume of loans originated during the 2013  period 
offset by adjustments made for unfunded loan commitments extended and  changes 
in the  value  of MSRs.  Income  before income  taxes  was $11.4  million,  a 
decrease of 25.2% compared with the same period of 2012.

  *Loan origination fees for the year ended December 31, 2013 were $7.2
    million as the Company originated 62 commercial loans with an aggregate
    principal loan balance of $589.0 million.

  *Net servicing revenue for the year ended December 31, 2013 was $5.1
    million compared with $4.2 million for the comparable period in 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 $675.9 million  during the year ended  December 
31, 2013,  an  increase  of 7.9%  over  the  year ended  December  31,  2012. 
Compensation as  a percentage  of  revenue was  66.3%  during the  year  ended 
December 31, 2013 compared to 65.8% for the year ended December 31, 2012.  An 
increase  in  production-related  compensation  contributed  to  much  of  the 
increase due to payouts associated with higher management and performance fees
on managed products. Share-based compensation  increased due to the  increase 
in the  value  of stock  appreciation  rights associated  with  the  Company's 
stock. Incentive and deferred compensation also increased during the period.

Non-Compensation Expenses

Non-compensation expenses were $299.9 million  during the year ended  December 
31, 2013, a decrease of 8.2% compared to $326.7 million during the same period
last  year  which  was  negatively  impacted  by  increased  litigation  costs 
associated with  an  arbitration award  rendered  against the  Company  in  an 
auction rate securities-related matter.

Provision for Income Taxes

The effective income tax rate for the  year ended December 31, 2013 was  40.4% 
compared with (61.5%) for the same period in 2012. The negative effective  tax 
rate for full year ended December  31, 2012 was primarily attributable to  the 
small loss before income taxes, which disproportionately magnified the  impact 
of permanent book-tax differences and tax reserves. As the Company realized a
profit in 2013,  the effective tax  rate for 2013  has reverted to  historical 
norms.

Balance Sheet and Liquidity

  *At December 31, 2013, total equity was $527.9 million  compared with
    $505.0 million  at December 31, 2012.

  *At December 31, 2013, book value per share was $38.77 (compared with
    $36.80 at December 31, 2012) and tangible book value per share was $26.19
    (compared with $24.34 at December 31, 2012).

  *The Company's level 3 assets, primarily auction rate securities, were
    $91.3 million at December 31, 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 February 28, 2014 to holders of Class A non-voting and  Class 
B voting common stock of record on February 14, 2014.

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 banking.  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 the Company's Annual Report  on Form 10-K for  the year ended December  31, 
2012.

                                                                 
                              Oppenheimer Holdings Inc.
                     Consolidated Income Statements (unaudited)
('000s, except EPS)                                               
                       For the 3-Months Ended          For the 12-Months Ended
                    12/31/13  12/31/12   % Δ     12/31/13   12/31/12    % Δ
REVENUE                                                                 
Commissions     $122,495  $118,378     3.5    $486,767  $469,865      3.6
Principal                                                        
transactions, net       10,172     13,924   (26.9)        43,768     54,311    (19.4)
Interest          13,300    15,200  (12.5)      53,216    57,662    (7.7)
Investment                                                       
banking                 35,600     22,830     55.9        97,977     89,477       9.5
Advisory fees     96,761    65,936    46.7     274,178   222,732     23.1
Other             15,034    13,147    14.4      63,808    58,565      9.0
                     293,362   249,415    17.6   1,019,714   952,612      7.0
                                                                       
EXPENSES                                                                
Compensation
and related                                                           
expenses               195,640    164,895     18.6       675,936    626,411       7.9
Clearing and                                                     
exchange fees            6,047      5,704      6.0        24,481     23,750       3.1
Communications                                                   
and technology          16,936     16,013      5.8        65,817     63,359       3.9
Occupancy and                                                    
equipment costs         15,647      3,539    342.1        66,758     62,818       6.3
Interest           5,973     9,222  (35.2)      26,142    35,086   (25.5)
Other             29,760    57,177  (48.0)     116,671   141,715   (17.7)
                     270,003   256,550     5.2     975,805   953,139      2.4
                                                                       
Income (loss)                                                         
before income taxes     23,359    (7,135)      *        43,909      (527)       *
Income tax                                                            
provision (benefit)      9,673    (3,768)      *        17,756        324   5,380.2
Net income (loss)                                                     
for the period          13,686    (3,367)      *        26,153      (851)       *
Less net income
attributable to
non-controlling                                                       
interest, net of
tax                        373        333     12.0         1,092      2,762    (60.5)
Net income (loss)
attributable to                                                       
Oppenheimer
Holdings Inc.          $13,313   ($3,700)      *       $25,061   ($3,613)       *
                                                                       
Earnings (Loss) per
share attributable                                                    
to Oppenheimer
Holdings Inc.                                                                  
Basic              $0.99   ($0.27)     *       $1.85   ($0.27)      *
Diluted            $0.94   ($0.27)     *       $1.77   ($0.27)      *
                                                                       
Weighted Average
Number of Common                                                      
Shares Outstanding                                                             
Basic             13,492    13,611   (0.9)      13,578    13,602    (0.2)
Diluted           14,143    13,611     3.9      14,124    13,602      3.8

* Not comparable





SOURCE Oppenheimer Holdings Inc.
 
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