Breaking News

Tweet TWEET

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 
NEW YORK, Jan. 31, 2014 /CNW/ - 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    % ”      12/31/13    12/31/12  % ”
    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    % ”                                
         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    % ”      12/31/13    12/31/12     % ”
    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 millioncompared
            with $505.0 millionat 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     % ”      12/31/13    12/31/12      % ”
    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. 
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/January2014/31/c6518.html 
CO: Oppenheimer Holdings Inc.
ST: New York
NI: FIN ERN DIV  
-0- Jan/31/2014 13:00 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.