Oppenheimer Holdings Inc. Reports First Quarter 2014 Earnings and Announces Quarterly Dividend

 Oppenheimer Holdings Inc. Reports First Quarter 2014 Earnings and Announces  Quarterly Dividend  NEW YORK, May 1, 2014 /CNW/ - Oppenheimer Holdings Inc. (NYSE: OPY) today  reported net income of $3.2 million or $0.24 per share for the first quarter  of 2014 compared with net income of $3.7 million or $0.27 per share for the  first quarter of 2013, a decrease in net income of 12.0%. Revenue for the  first quarter of 2014 was $255.2 million compared with $239.1 million in the  first quarter of 2013, an increase of 6.7%.                             Summary Operating Results (Unaudited)     ('000s, except Earnings Per Share and Book Value Per Share)                                                     For the 3-Months Ended                                        3/31/14        3/31/13     % ”     Revenue                          $  255,168      $  239,146    6.7     Net Income(1)                       $ 3,224         $ 3,663 (12.0)     Earnings Per Share(1)                                               Basic                              $ 0.24          $ 0.27 (11.1)       Diluted                            $ 0.23          $ 0.26 (11.5)     Weighted Average # of Common Shares Outstanding                          Basic                              13,537          13,608  (0.5)       Diluted                            14,115          14,029    0.6                                                                                                                                                                                                     As of:                                        3/31/14          3/31/13   % ”       Book Value Per Share              $ 38.56         $ 37.07    4.0       Tangible Book Value Per Share     $ 26.10         $ 24.61    6.1  (1) Attributable to Oppenheimer Holdings Inc.  After a minor setback in the early part of the quarter, the U.S. equities  markets rebounded with the S&P 500 returning 1.3% for the first quarter of  2014.  Concerns in the quarter were due in part to the Federal Reserve's  tapering program, the slowdown in China's economy, and volatility in emerging  markets.  That coupled with geo-political tensions around Russia's annexation  of Crimea, continuing upheaval in the Middle East as well as the reduction in  the rate of growth of the U.S. economy due to the extreme winter weather  across much of the U.S. provided the impetus for increases in bond prices and  volatility in the equity markets during the first quarter.  Albert G. Lowenthal, Chairman and CEO, "While we are generally pleased with  our operating results for the first quarter, we continue to operate in a  difficult regulatory environment.  Recent developments in two related  regulatory matters based on activities that occurred a number of years ago  have caused the Company to set aside reserves that negatively impacted results  for the first quarter.  We hope to put these matters behind us over the next  few quarters so that we can more fully realize the progress we have made in  our operating units.  During the quarter, we began to see some of the investments we made last year  in the investment banking business starting to pay off.  As a result, our fee  income from participation in mergers and acquisitions activity increased and  we continued to benefit from the strong demand for equity issuances.  In  addition to the record revenue during the first quarter in our fee-based  business, the Company continues to see improvement in its transaction-based  business.  The first quarter marked a strong finish in the equity markets  which resulted in favorable valuations of our assets under management, which  will ultimately lead in the second quarter to the eight consecutive record for  our fee-based business.  The combination of a favorable operating environment  and lower financing costs due to the early redemption and retirement of 25% of  our high coupon long-term senior debt on April 15(th) should help our business  over the remainder of the year."  Financial Highlights         --  Commission revenue was $122.1 million for the first quarter of             2014, an increase of 2.1% compared with the first quarter of             2013.         --  Principal transactions revenue decreased 43.9% to $8.8 million             during the first quarter of 2014 compared with the first             quarter of 2013 due to decreases in both equities and fixed             income trading profits during the period.         --  Investment banking revenue was up 81.7% to $33.5 million for             the first quarter of 2014 compared with $18.4 million for the             first quarter of 2013 due to increased fees from equity             underwritings and from mergers and acquisition activity during             the 2014 quarter.         --  Advisory fees were $68.2 million during the first quarter of             2014, an increase of 20.2% compared with the first quarter of             2013 due to increased management fees earned on managed             products.                     Business Segment Results (Unaudited)                                       For the 3-Months Ended     ('000s)                         3/31/14    3/31/13    % ”     Revenue                                                          Private Client               $ 147,820  $ 143,369    3.1       Asset Management                24,610     20,956   17.4       Capital Markets                 77,881     65,131   19.6       Commercial Mortgage Banking      4,872      8,066 (39.6)       Corporate/Other                   (15)      1,624     *                                       255,168    239,146    6.7     Income (Loss) Before Income Taxes                                Private Client                  10,308     17,327 (40.5)       Asset Management                 7,683      6,543   17.4       Capital Markets                 11,184      3,533  216.6       Commercial Mortgage Banking      1,849      2,878 (35.8)       Corporate/Other               (25,915)   (23,568) (10.0)                                      $ 5,109    $ 6,713 (23.9)  * Not comparable  Private Client  Private Client reported revenue of $147.8 million for the first quarter of  2014, 3.1% higher than the first quarter of 2013 due to an increase in  fee-based business during the first quarter of 2014.  Income before income  taxes was $10.3 million, a decrease of 40.5% compared with the first quarter  of 2013 primarily due to increases in legal and regulatory costs during the  first quarter of 2014.         --  Client assets under administration were $87.2 billion at March             31, 2014 compared to $84.9 billion at March 31, 2013, an             increase of 2.7% and a record for the Company.         --  Financial Advisor headcount was 1,390 at the end of the first             quarter of 2014, down from 1,405 at the end of the first             quarter of 2013.         --  Retail commissions were $79.3 million for the first quarter of             2014, a decrease of 3.4% from the prior year quarter.         --  Advisory fee revenue on traditional and alternative managed             products was $45.2 million for the first quarter of 2014, an             increase of 22.0% over the prior year quarter (see Asset             Management below for further information).         --  Money market fees were reduced by waivers in the amount of $7.9             million during the first quarter of 2014 versus waivers of $7.2             million during the first quarter of 2013.  Asset Management  Asset Management reported revenue of $24.6 million for the first quarter of  2014, 17.4% higher than the first quarter of 2013.  Income before income taxes  was $7.7 million, an increase of 17.4% compared with the first quarter of  2013, as a result of increased fees earned on managed products.         --  Advisory fee revenue on traditional and alternative managed             products was $23.0 million for the first quarter of 2014, an             increase of 16.9% 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 $25.3 billion at December 31, 2013 ($20.9 billion at             December 31, 2012) and are allocated to the Private Client and             Asset Management Divisions.         --  AUM increased 14.3% to $25.6 billion at March 31, 2014, a             record for the Company, compared to $22.4 billion at March 31,             2013, which is the basis for advisory fee billings for the             second quarter of 2014.  The increase in AUM was comprised of             asset appreciation of $0.8 billion and net new assets of $2.4             billion.  Capital Markets  Capital Markets reported revenue of $77.9 million for the first quarter of  2014, 19.6% higher than the first quarter of 2013 due to increased fees from  equity underwritings and from mergers and acquisition activity.  Income before  income taxes was $11.2 million for the first quarter of 2014, an increase of  216.6% compared with income before income taxes of $3.5 million for the first  quarter of 2013.         --  Institutional equities commissions were $29.1 million for the             first quarter of 2014, an increase of 15.5% compared with the             prior year period.         --  Advisory fees from investment banking activities increased             133.5% to $13.5 million in the first quarter of 2014 compared             with the prior year period.         --  Equity underwriting fees increased 63.0% or $5.4 million to             $14.0 million for the first quarter of 2014 compared with the             prior year period.         --  Revenue from Taxable Fixed Income decreased 17.0% to $17.3             million for the first quarter of 2014 compared with the prior             year period.         --  Public Finance and Municipal Trading revenue was down 9.7% to             $5.0 million for the first quarter of 2014 compared with the             prior year period.  Commercial Mortgage Banking  Commercial Mortgage Banking reported revenue of $4.9 million for the first  quarter of 2014, 39.6% lower than the first quarter of 2013, due to a decrease  in the dollar volume of loans originated during the 2014 period.  Income  before income taxes was $1.8 million, a decrease of 35.8% compared with the  first quarter of 2013.         --  Loan origination fees for the first quarter of 2014 were             $683,000, a decrease of 57.3% compared with the prior year             period, as the Company originated 5 commercial loans (20 in the             first quarter of 2013) with an aggregate principal loan balance             of $62.4 million ($151 million in the first quarter of 2013).         --  Net servicing revenue for the first quarter of 2014 was $1.3             million compared with $1.2 million for the comparable period in             2013.         --  Principal loan balances related to servicing activities totaled             $3.9 billion at March 31, 2014, up 11.4% from March 31, 2013.  Compensation and Benefit Expenses  Compensation and benefits (including salaries, production and incentive  compensation, share-based compensation, deferred compensation, and other  benefit-related items) totaled $172.0 million during the first quarter of  2014, an increase of 8.0% over the first quarter of 2013.  An increase in  production-related and incentive compensation contributed to much of the  increase based on increased revenue during the period.  This was offset by  decreases in expenses associated with deferred compensation during the period.   Compensation as a percentage of revenue was 67.4% during the first quarter of  2014 compared to 66.6% during the first quarter of 2013.  The increase in  compensation as a percentage of revenue was largely attributable to the  increased share-based compensation costs resulting from employee compensation  plans where the value is associated with the Company's stock price.  Non-Compensation Expenses  Non-compensation expenses were $78.1 million during the first quarter of 2014,  an increase of 6.7% compared to $73.2 million during the same period last year  due to increases in legal and regulatory costs which were partially offset by  decreases in occupancy and equipment and interest costs during the period. The  increase in legal and regulatory costs largely reflects an increase in  reserves of $7.7 million during the first quarter of 2014 related to  regulatory matters.  Provision for Income Taxes  The effective income tax rate for the first quarter of 2014 was 33.1% compared  with 42.0% for the prior year first quarter due to income tax benefits related  to the revaluation of deferred tax liabilities recorded in the first quarter  of 2014.  Such changes were, in large part, due to the enactment of the New  York State corporate tax reform and to smaller losses incurred by the foreign  subsidiaries in the first quarter of 2014 compared to the corresponding prior  year period whose tax effect is accrued at lower statutory rates.  Balance Sheet and Liquidity         --  At March 31, 2014, total equity was $530.6 millioncompared with             $527.9 millionat December 31, 2013.         --  At March 31, 2014, book value per share was $38.56 (compared             with $38.77 at December 31, 2013) and tangible book value per             share was $26.10 (compared with $26.19 at December 31, 2013).         --  The Company's level 3 assets, primarily auction rate             securities, were $96.8 million at December 31, 2013 (compared             with $93.7 million at December 31, 2013).         --  On April 15, 2014, the Company early retired a total of $50             million (25%) of its 8.75% Senior Secured Notes due 2018 (the             "Notes").  The Company redeemed $45 million aggregate principal             amount of the outstanding Notes at a redemption price equal to             106.563% of the principal amount of the Notes, plus accrued and             unpaid interest.  In addition, the Company retired the $5             million aggregate principal amount of the Notes that it held.              Upon completion of the redemption and retirement on April 15,             2014, $150 million aggregate principal amount of the Notes             remains outstanding.  The retirement of the Notes will reduce             the Company's interest costs by $3.9 million annually.  Dividend Announcement  The Company today announced a quarterly dividend in the amount of $0.11 per  share payable on May 27, 2014 to holders of Class A non-voting and Class B  voting common stock of record on May 15, 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,  2013.                                 Oppenheimer Holdings Inc.                    Consolidated Income Statements (unaudited)     ('000s, except EPS)                                                                                         For the 3-Months Ended                                            3/31/14  3/31/13    % ”     REVENUE                                                               Commissions                          $122,138 $119,580    2.1       Advisory fees                          68,205   56,720   20.2       Investment banking                     33,524   18,448   81.7       Interest                               12,390   12,371    0.2       Principal transactions, net             8,817   15,717 (43.9)       Other                                  10,094   16,310 (38.1)                                             255,168  239,146    6.7                                                                         EXPENSES                                                              Compensation and related expenses     171,950  159,209    8.0       Occupancy and equipment costs          15,397   17,565 (12.3)       Communications and technology          16,734   15,864    5.5       Interest                                5,164    6,862 (24.7)       Clearing and exchange fees              5,892    6,042  (2.5)       Other                                  34,922   26,891   29.9                                             250,059  232,433    7.6                                                                         Income before income taxes                5,109    6,713 (23.9)     Income tax provision                      1,689    2,820 (40.1)     Net income for the period                 3,420    3,893 (12.1)     Less net income attributable to             196      230 (14.8)     non-controlling interest, net of tax     Net income attributable to Oppenheimer   $3,224   $3,663 (12.0)     Holdings Inc.                                                                         Earnings per share attributable to Oppenheimer Holdings             Inc.       Basic                                   $0.24    $0.27 (11.1)       Diluted                                 $0.23    $0.26 (11.5)                                                                         Weighted Average Number of Common Shares Outstanding                  Basic                                  13,537   13,608  (0.5)       Diluted                                14,115   14,029    0.6    SOURCE  Oppenheimer Holdings Inc.  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/May2014/01/c6168.html  CO: Oppenheimer Holdings Inc. ST: New York NI: FIN ERN DIV  
Press spacebar to pause and continue. Press esc to stop.