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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Oppenheimer Holdings Inc | NYSE:OPY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.35 | 0.86% | 40.83 | 40.96 | 40.52 | 40.96 | 14,506 | 22:30:00 |
NEW YORK, July 30, 2020 /CNW/ - Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or "Firm") today reported net income of $17.6 million or $1.40 basic earnings per share for the second quarter of 2020 compared with net income of $12.4 million or $0.95 basic earnings per share for the second quarter of 2019. Revenue for the second quarter of 2020 was $264.7 million compared to revenue of $250.9 million for the second quarter of 2019.
Albert G. Lowenthal, Chairman and CEO commented, "I am extremely proud of how our employees have risen to the challenges of the current environment. While navigating new working arrangements, whether remotely or in a less populated office environment, the Firm's associates were able to work productively and contribute to what turned out to be a very solid quarter, both in terms of revenue and profit, given the headwinds created by a very low interest rate environment. Continued volatility in the equity markets and huge demand for capital raising led to stronger than expected operating results for the period.
Investment banking led the way with a significant increase in the number of equity underwriting transactions in May and June. We also saw substantially increased activity in fixed income, both taxable and municipal finance, including higher public finance issuances. This helped offset lower M&A activity during the quarter. The broader equities markets saw the largest quarterly increase in two decades contributing to higher retail and institutional commission revenue as investors reacted to very high levels of volatility. The recovery in asset values also contributed to record assets under management at June 30, 2020, which will drive advisory fee revenue for the third quarter of 2020. A continuation of market volatility and robust capital markets activity would drive positive operating results for the last half of the year".
Summary Operating Results (Unaudited) | |||||
('000s, except per share amounts or otherwise indicated) | |||||
Firm | 2Q-20 | 2Q-19 | |||
Revenue | $ | 264,730 | $ | 250,935 | |
Compensation expense | $ | 179,594 | $ | 155,783 | |
Non-compensation expense | $ | 61,872 | $ | 77,761 | |
Pre-Tax Income | $ | 23,264 | $ | 17,391 | |
Income Taxes | $ | 5,615 | $ | 5,016 | |
Net Income | $ | 17,649 | $ | 12,375 | |
Earnings per share (basic) | $ | 1.40 | $ | 0.95 | |
Earnings per share (diluted) | $ | 1.34 | $ | 0.89 | |
Book Value Per Share | $ | 47.92 | $ | 43.84 | |
Tangible Book Value Per Share (1) | $ | 34.37 | $ | 30.62 | |
Private Client | |||||
Revenue | $ | 141,825 | $ | 161,928 | |
Pre-Tax Income | $ | 24,349 | $ | 43,416 | |
Assets Under Administration (billions) | $ | 89.7 | $ | 87.3 | |
Asset Management | |||||
Revenue | $ | 17,515 | $ | 18,622 | |
Pre-Tax Income | $ | 3,983 | $ | 5,318 | |
Assets Under Management (billions) | $ | 32.7 | $ | 30.2 | |
Capital Markets | |||||
Revenue | $ | 105,270 | $ | 71,819 | |
Pre-Tax Income (Loss) | $ | 22,322 | $ | (1,801) | |
(1) Represents book value less goodwill and intangible assets divided by number of shares outstanding |
Highlights
Private Client
Private Client reported revenue for the current quarter of $141.8 million, 12.4% lower compared with a year ago. Pre-tax income of $24.3 million in the current quarter resulted in a pre-tax profit margin of 17.2%.
('000s, except financial advisor headcount or otherwise indicated) | ||||
2Q-20 | 2Q-19 | |||
Revenue | $ | 141,825 | $ | 161,928 |
Commissions | $ | 50,295 | $ | 47,150 |
Advisory fees | $ | 58,465 | $ | 62,080 |
Bank deposit sweep income | $ | 7,122 | $ | 31,830 |
Interest | $ | 5,134 | $ | 9,639 |
Other | $ | 20,809 | $ | 11,229 |
Total Expenses | $ | 117,476 | $ | 118,513 |
Compensation | $ | 90,512 | $ | 85,540 |
Non-compensation | $ | 26,964 | $ | 32,973 |
Assets Under Administration (billions) | $ | 89.7 | $ | 87.3 |
Cash Sweep Balances (billions) | $ | 6.3 | $ | 5.0 |
Financial Advisor Headcount | 1,029 | 1,036 | ||
Revenue:
Total Expenses:
Asset Management
Asset Management reported revenue for the current quarter of $17.5 million, 5.9% lower compared with a year ago. Pre-tax income was $4.0 million, a decrease of 25.1% compared with a year ago.
('000s, except otherwise indicated) | ||||
2Q-20 | 2Q-19 | |||
Revenue | $ | 17,515 | $ | 18,622 |
Advisory fees | $ | 17,507 | $ | 18,617 |
Other | $ | 8 | $ | 5 |
Total Expenses | $ | 13,532 | $ | 13,304 |
Compensation | $ | 5,676 | $ | 5,316 |
Non-compensation | $ | 7,856 | $ | 7,988 |
AUM (billions) | $ | 32.7 | $ | 30.2 |
Revenue:
Assets under Management (AUM):
Total Expenses:
Capital Markets
Capital Markets reported revenue for the current quarter of $105.3 million, 46.6% higher compared with a year ago. Pre-Tax income was $22.3 million compared with a pre-tax loss of $1.8 million a year ago.
('000s) | ||||
2Q-20 | 2Q-19 | |||
Revenue | $ | 105,270 | $ | 71,819 |
Investment Banking | $ | 42,716 | $ | 27,742 |
Advisory fees | $ | 7,244 | $ | 13,045 |
Equities underwriting | $ | 27,787 | $ | 13,020 |
Fixed income underwriting | $ | 7,685 | $ | 1,677 |
Sales and Trading | $ | 61,878 | $ | 43,508 |
Equities | $ | 30,858 | $ | 23,391 |
Fixed Income | $ | 31,020 | $ | 20,117 |
Other | $ | 676 | $ | 569 |
Total Expenses | $ | 82,949 | $ | 73,620 |
Compensation | $ | 62,295 | $ | 45,848 |
Non-compensation | $ | 20,654 | $ | 27,772 |
Revenue:
Investment Banking
Sales and Trading
Total Expenses:
Other Matters
(In millions, except number of shares and per share amounts) | ||||||
2Q-20 | 2Q-19 | |||||
Capital | ||||||
Shareholders' equity | $ | 601.1 | $ | 563.6 | ||
Regulatory Net Capital (1) | $ | 251.3 | $ | 201.7 | ||
Regulatory Excess Net Capital (1) | $ | 228.3 | $ | 185.0 | ||
Common Stock Repurchases | ||||||
Repurchases | $ | 3.8 | $ | 4.3 | ||
Number of Shares | 191,044 | 167,209 | ||||
Average Price | $ | 20.06 | $ | 25.82 | ||
Period End Shares | 12,445,479 | 12,756,308 | ||||
Effective Tax Rate | 24.1 | % | 28.8 | % | ||
(1) Attributable to Oppenheimer & Co. Inc. broker-dealer |
Coronavirus Pandemic ("COVID-19")
The Company continues to monitor the effects of the pandemic both on a national level as well as regional and local effects and is responding accordingly. In addition, we continue to provide frequent communications to clients, employees, and regulators. We have adopted enhanced cleaning practices and other health protocols in our offices, taken measures to significantly restrict non-essential business travel and have practices in place to mandate that employees who may have been exposed to COVID-19, or show any relevant symptoms, self-quarantine. In early March 2020, the Company executed on its Business Continuity Plan whereby the vast majority of our employees began to work remotely with only "essential" employees reporting to our offices. We accomplished this by significantly expanding the use of technology infrastructure that facilitates remote operations. Our ability to avoid significant business disruptions are reliant on the continued ability to have the vast majority of employees working remotely. To date, there have been no significant disruptions to our business or control processes as a result of this dispersion of employees. Recent outbreaks in various states indicate that COVID-19 will continue to impact the economy and, by extension, our business, well into 2021. We currently anticipate that a large number of our employees will continue to work remotely for the indefinite future.
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, and investment management. With roots tracing back to 1881, the firm is headquartered in New York and has 93 retail branch offices in the United States and has institutional businesses located in London, Tel Aviv, and Hong Kong.
Forward-Looking Statements
This press release includes certain "forward-looking statements" relating to anticipated future performance including the projected impact of COVID-19 on the Company's business, financial performance, and operating results. The following factors, among others, could cause actual results to vary from the forward-looking statements: the severity and duration of the COVID-19; COVID-19 impact on the U.S. and global economies; and Federal, state and local governmental responses to the pandemic. 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, 2019 and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
Oppenheimer Holdings Inc. | ||||||||||||||||
Consolidated Statements of Income (Unaudited) | ||||||||||||||||
('000s, except number of shares and per share amounts) | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||
REVENUE | ||||||||||||||||
Commissions | $ | 101,636 | $ | 80,896 | 25.6 | $ | 204,885 | $ | 160,305 | 27.8 | ||||||
Advisory fees | 75,981 | 80,707 | (5.9) | 162,145 | 154,354 | 5.0 | ||||||||||
Investment banking | 46,186 | 32,006 | 44.3 | 71,914 | 60,049 | 19.8 | ||||||||||
Bank deposit sweep income | 7,122 | 31,830 | (77.6) | 25,948 | 65,798 | (60.6) | ||||||||||
Interest | 6,220 | 13,550 | (54.1) | 17,110 | 26,277 | (34.9) | ||||||||||
Principal transactions, net | 12,064 | 3,045 | 296.2 | 11,196 | 14,483 | (22.7) | ||||||||||
Other | 15,521 | 8,901 | 74.4 | 6,302 | 21,439 | (70.6) | ||||||||||
Total revenue | 264,730 | 250,935 | 5.5 | $ | 499,500 | $ | 502,705 | (0.6) | ||||||||
EXPENSES | ||||||||||||||||
Compensation and related expenses | 179,594 | 155,783 | 15.3 | 337,270 | 316,138 | 6.7 | ||||||||||
Communications and technology | 21,324 | 20,499 | 4.0 | 41,215 | 40,585 | 1.6 | ||||||||||
Occupancy and equipment costs | 15,334 | 15,573 | (1.5) | 31,412 | 30,846 | 1.8 | ||||||||||
Clearing and exchange fees | 6,191 | 5,678 | 9.0 | 11,850 | 11,010 | 7.6 | ||||||||||
Interest | 2,890 | 13,192 | (78.1) | 9,440 | 26,178 | (63.9) | ||||||||||
Other | 16,133 | 22,819 | (29.3) | 34,826 | 44,505 | (21.7) | ||||||||||
Total expenses | 241,466 | 233,544 | 3.4 | 466,013 | 469,262 | (0.7) | ||||||||||
Pre-Tax Income | 23,264 | 17,391 | 33.8 | 33,487 | 33,443 | 0.1 | ||||||||||
Income taxes | 5,615 | 5,016 | 11.9 | 8,020 | 9,874 | (18.8) | ||||||||||
Net income | $ | 17,649 | $ | 12,375 | 42.6 | $ | 25,467 | $ | 23,569 | 8.1 | ||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.40 | $ | 0.95 | 47.4 | $ | 1.99 | $ | 1.81 | 9.9 | ||||||
Diluted | $ | 1.34 | $ | 0.89 | 50.6 | $ | 1.92 | $ | 1.70 | 12.9 | ||||||
Weighted average number of common shares outstanding | ||||||||||||||||
Basic | 12,640,463 | 12,976,235 | (2.6) | 12,768,096 | 12,998,168 | (1.8) | ||||||||||
Diluted | 13,124,655 | 13,861,753 | (5.3) | 13,269,494 | 13,857,616 | (4.2) |
View original content:http://www.prnewswire.com/news-releases/oppenheimer-holdings-inc-reports-second-quarter-2020-earnings-301102608.html
SOURCE Oppenheimer Holdings Inc.
Copyright 2020 Canada NewsWire
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