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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Piper Jaffray Companies | NYSE:PJC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 79.62 | 0 | 01:00:00 |
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
30-0168701
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer Identification No.)
|
|
|
|
800 Nicollet Mall, Suite 800
Minneapolis, Minnesota
|
|
55402
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer:
þ
|
|
Accelerated filer:
o
|
|
Non-accelerated filer:
o
|
|
Smaller reporting company:
o
|
(Do not check if a smaller reporting company)
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
(Amounts in thousands, except share data)
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
41,678
|
|
|
$
|
85,807
|
|
Cash and cash equivalents segregated for regulatory purposes
|
33,011
|
|
|
25,008
|
|
||
Receivables:
|
|
|
|
||||
Customers
|
17,590
|
|
|
24,196
|
|
||
Brokers, dealers and clearing organizations
|
169,455
|
|
|
124,661
|
|
||
Securities purchased under agreements to resell
|
88,163
|
|
|
160,146
|
|
||
|
|
|
|
||||
Financial instruments and other inventory positions owned
|
421,191
|
|
|
391,694
|
|
||
Financial instruments and other inventory positions owned and pledged as collateral
|
734,073
|
|
|
405,887
|
|
||
Total financial instruments and other inventory positions owned
|
1,155,264
|
|
|
797,581
|
|
||
|
|
|
|
||||
Fixed assets (net of accumulated depreciation and amortization of $60,264 and $58,923, respectively)
|
16,651
|
|
|
21,793
|
|
||
Goodwill
|
202,352
|
|
|
202,352
|
|
||
Intangible assets (net of accumulated amortization of $27,459 and $21,708, respectively)
|
45,553
|
|
|
51,304
|
|
||
Other receivables
|
52,851
|
|
|
41,570
|
|
||
Other assets
|
137,985
|
|
|
121,303
|
|
||
Total assets
|
$
|
1,960,553
|
|
|
$
|
1,655,721
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
|
|
|
|
||||
Short-term financing
|
$
|
446,472
|
|
|
$
|
168,701
|
|
Bank syndicated financing
|
83,488
|
|
|
115,000
|
|
||
Payables:
|
|
|
|
||||
Customers
|
51,403
|
|
|
29,373
|
|
||
Brokers, dealers and clearing organizations
|
151,302
|
|
|
35,436
|
|
||
Securities sold under agreements to repurchase
|
50,000
|
|
|
109,080
|
|
||
Financial instruments and other inventory positions sold, but not yet purchased
|
271,696
|
|
|
303,504
|
|
||
Accrued compensation
|
97,673
|
|
|
109,588
|
|
||
Other liabilities and accrued expenses
|
37,943
|
|
|
34,439
|
|
||
Total liabilities
|
1,189,977
|
|
|
905,121
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value:
|
|
|
|
||||
Shares authorized: 100,000,000 at September 30, 2012 and December 31, 2011;
|
|
|
|
||||
Shares issued: 19,530,359 at September 30, 2012 and 19,524,512 at December 31, 2011;
|
|
|
|
||||
Shares outstanding: 15,227,977 at September 30, 2012 and 15,750,188 at December 31, 2011
|
195
|
|
|
195
|
|
||
Additional paid-in capital
|
757,637
|
|
|
791,166
|
|
||
Retained earnings
|
106,979
|
|
|
77,535
|
|
||
Less common stock held in treasury, at cost: 4,302,382 shares at September 30, 2012 and 3,774,324 shares at December 31, 2011
|
(140,931
|
)
|
|
(151,110
|
)
|
||
Accumulated other comprehensive income
|
736
|
|
|
605
|
|
||
Total common shareholders’ equity
|
724,616
|
|
|
718,391
|
|
||
|
|
|
|
||||
Noncontrolling interests
|
45,960
|
|
|
32,209
|
|
||
Total shareholders’ equity
|
770,576
|
|
|
750,600
|
|
||
|
|
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
1,960,553
|
|
|
$
|
1,655,721
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Amounts in thousands, except per share data)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Investment banking
|
$
|
51,083
|
|
|
$
|
44,031
|
|
|
$
|
148,536
|
|
|
$
|
151,834
|
|
Institutional brokerage
|
58,719
|
|
|
28,689
|
|
|
134,006
|
|
|
111,732
|
|
||||
Asset management
|
17,588
|
|
|
15,205
|
|
|
52,927
|
|
|
52,774
|
|
||||
Interest
|
12,457
|
|
|
15,116
|
|
|
35,742
|
|
|
42,407
|
|
||||
Other income
|
235
|
|
|
1,710
|
|
|
1,242
|
|
|
10,018
|
|
||||
Total revenues
|
140,082
|
|
|
104,751
|
|
|
372,453
|
|
|
368,765
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
7,125
|
|
|
8,894
|
|
|
20,184
|
|
|
24,748
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
132,957
|
|
|
95,857
|
|
|
352,269
|
|
|
344,017
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-interest expenses:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
78,738
|
|
|
60,505
|
|
|
211,564
|
|
|
207,591
|
|
||||
Occupancy and equipment
|
6,232
|
|
|
6,638
|
|
|
20,171
|
|
|
22,427
|
|
||||
Communications
|
5,374
|
|
|
5,595
|
|
|
16,421
|
|
|
17,611
|
|
||||
Floor brokerage and clearance
|
1,827
|
|
|
2,143
|
|
|
5,939
|
|
|
6,684
|
|
||||
Marketing and business development
|
4,285
|
|
|
5,059
|
|
|
15,097
|
|
|
16,868
|
|
||||
Outside services
|
7,557
|
|
|
6,263
|
|
|
21,027
|
|
|
20,632
|
|
||||
Restructuring-related expense
|
—
|
|
|
—
|
|
|
3,642
|
|
|
—
|
|
||||
Intangible asset amortization expense
|
1,917
|
|
|
2,069
|
|
|
5,751
|
|
|
6,207
|
|
||||
Other operating expenses
|
4,313
|
|
|
2,457
|
|
|
9,164
|
|
|
8,468
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total non-interest expenses
|
110,243
|
|
|
90,729
|
|
|
308,776
|
|
|
306,488
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations before income tax expense
|
22,714
|
|
|
5,128
|
|
|
43,493
|
|
|
37,529
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
9,188
|
|
|
1,361
|
|
|
11,365
|
|
|
11,892
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
13,526
|
|
|
3,767
|
|
|
32,128
|
|
|
25,637
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Income/(loss) from discontinued operations, net of tax
|
6,803
|
|
|
(7,143
|
)
|
|
(13
|
)
|
|
(10,447
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income/(loss)
|
20,329
|
|
|
(3,376
|
)
|
|
32,115
|
|
|
15,190
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income applicable to noncontrolling interests
|
665
|
|
|
207
|
|
|
2,671
|
|
|
846
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income/(loss) applicable to Piper Jaffray Companies
|
$
|
19,664
|
|
|
$
|
(3,583
|
)
|
|
$
|
29,444
|
|
|
$
|
14,344
|
|
|
|
|
|
|
|
|
|
||||||||
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders
|
$
|
16,840
|
|
|
$
|
(3,583
|
)
|
|
$
|
25,151
|
|
|
$
|
11,648
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts applicable to Piper Jaffray Companies
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
12,861
|
|
|
$
|
3,560
|
|
|
$
|
29,457
|
|
|
$
|
24,791
|
|
Income/(loss) from discontinued operations, net of tax
|
6,803
|
|
|
(7,143
|
)
|
|
(13
|
)
|
|
(10,447
|
)
|
||||
Net income/(loss) applicable to Piper Jaffray Companies
|
$
|
19,664
|
|
|
$
|
(3,583
|
)
|
|
$
|
29,444
|
|
|
$
|
14,344
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) per basic common share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.72
|
|
|
$
|
0.22
|
|
|
$
|
1.60
|
|
|
$
|
1.29
|
|
Income/(loss) from discontinued operations
|
0.38
|
|
|
(0.45
|
)
|
|
—
|
|
|
(0.54
|
)
|
||||
Earnings/(loss) per basic common share
|
$
|
1.11
|
|
|
$
|
(0.23
|
)
|
|
$
|
1.60
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) per diluted common share
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.72
|
|
|
$
|
0.22
|
|
|
$
|
1.60
|
|
|
$
|
1.29
|
|
Income/(loss) from discontinued operations
|
0.38
|
|
|
(0.45
|
)
|
|
—
|
|
|
(0.54
|
)
|
||||
Earnings/(loss) per diluted common share
|
$
|
1.11
|
|
|
$
|
(0.23
|
)
|
(1)
|
$
|
1.60
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
15,210
|
|
|
15,889
|
|
|
15,736
|
|
|
15,638
|
|
||||
Diluted
|
15,210
|
|
|
15,889
|
|
(1)
|
15,736
|
|
|
15,655
|
|
(1)
|
Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss in incurred.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Amounts in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income/(loss)
|
$
|
20,329
|
|
|
$
|
(3,376
|
)
|
|
$
|
32,115
|
|
|
$
|
15,190
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
122
|
|
|
(111
|
)
|
|
131
|
|
|
(56
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income/(loss)
|
20,451
|
|
|
(3,487
|
)
|
|
32,246
|
|
|
15,134
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income applicable to noncontrolling interests
|
665
|
|
|
207
|
|
|
2,671
|
|
|
846
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income/(loss) applicable to Piper Jaffray Companies
|
$
|
19,786
|
|
|
$
|
(3,694
|
)
|
|
$
|
29,575
|
|
|
$
|
14,288
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
32,115
|
|
|
$
|
15,190
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization of fixed assets
|
5,436
|
|
|
5,439
|
|
||
Deferred income taxes
|
6,056
|
|
|
16,852
|
|
||
Share-based and deferred compensation
|
14,532
|
|
|
21,114
|
|
||
Amortization of intangible assets
|
5,751
|
|
|
6,207
|
|
||
Amortization of forgivable loans
|
6,077
|
|
|
5,935
|
|
||
Decrease/(increase) in operating assets:
|
|
|
|
||||
Cash and cash equivalents segregated for regulatory purposes
|
(8,003
|
)
|
|
18,000
|
|
||
Receivables:
|
|
|
|
||||
Customers
|
6,600
|
|
|
(4,891
|
)
|
||
Brokers, dealers and clearing organizations
|
(44,790
|
)
|
|
44,031
|
|
||
Securities purchased under agreements to resell
|
71,983
|
|
|
63,338
|
|
||
Net financial instruments and other inventory positions owned
|
(389,491
|
)
|
|
(267,613
|
)
|
||
Other receivables
|
(17,353
|
)
|
|
958
|
|
||
Other assets
|
(22,665
|
)
|
|
(9,087
|
)
|
||
Increase/(decrease) in operating liabilities:
|
|
|
|
||||
Payables:
|
|
|
|
||||
Customers
|
21,988
|
|
|
(15,653
|
)
|
||
Brokers, dealers and clearing organizations
|
115,867
|
|
|
67,647
|
|
||
Securities sold under agreements to repurchase
|
—
|
|
|
3,759
|
|
||
Accrued compensation
|
(7,306
|
)
|
|
(45,861
|
)
|
||
Other liabilities and accrued expenses
|
3,587
|
|
|
(35,870
|
)
|
||
|
|
|
|
||||
Net cash used in operating activities
|
(199,616
|
)
|
|
(110,505
|
)
|
||
|
|
|
|
||||
Investing Activities:
|
|
|
|
||||
Business acquisitions, net of cash acquired
|
—
|
|
|
(56
|
)
|
||
Purchases of fixed assets, net
|
(248
|
)
|
|
(6,534
|
)
|
||
|
|
|
|
||||
Net cash used in investing activities
|
(248
|
)
|
|
(6,590
|
)
|
||
|
|
|
|
||||
Financing Activities:
|
|
|
|
||||
Increase/(decrease) in short-term financing
|
277,771
|
|
|
(7,655
|
)
|
||
Decrease in bank syndicated financing
|
(31,512
|
)
|
|
(7,500
|
)
|
||
Increase/(decrease) in securities sold under agreements to repurchase
|
(59,080
|
)
|
|
118,897
|
|
||
Increase in noncontrolling interests
|
11,080
|
|
|
25,998
|
|
||
Repurchase of common stock
|
(42,514
|
)
|
|
(20,280
|
)
|
||
Proceeds from stock option transactions
|
—
|
|
|
40
|
|
||
|
|
|
|
||||
Net cash provided by financing activities
|
155,745
|
|
|
109,500
|
|
||
|
|
|
|
||||
Currency adjustment:
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(10
|
)
|
|
(199
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(44,129
|
)
|
|
(7,794
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
85,807
|
|
|
50,602
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
41,678
|
|
|
$
|
42,808
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information -
|
|
|
|
||||
Cash paid/(received) during the period for:
|
|
|
|
||||
Interest
|
$
|
20,756
|
|
|
$
|
26,642
|
|
Income taxes
|
$
|
(1,784
|
)
|
|
$
|
20,618
|
|
|
|
|
|
||||
Non-cash financing activities -
|
|
|
|
||||
Issuance of common stock for retirement plan obligations:
|
|
|
|
||||
165,241 shares and 90,085 shares for the nine months ended September 30, 2012 and 2011, respectively
|
$
|
3,814
|
|
|
$
|
3,814
|
|
|
|
|
|
||||
Issuance of restricted common stock for annual equity award:
|
|
|
|
||||
487,181 shares and 592,697 shares for the nine months ended September 30, 2012 and 2011, respectively
|
$
|
11,244
|
|
|
$
|
25,095
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
(Dollars in thousands)
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
2,674
|
|
|
$
|
2,124
|
|
|
$
|
6,625
|
|
|
$
|
11,517
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring expenses
|
11,057
|
|
|
—
|
|
|
11,057
|
|
|
—
|
|
||||
Operating expenses
|
5,843
|
|
|
6,952
|
|
|
16,550
|
|
|
20,078
|
|
||||
Total non-interest expenses
|
16,900
|
|
|
6,952
|
|
|
27,607
|
|
|
20,078
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income tax expense/(benefit)
|
(14,226
|
)
|
|
(4,828
|
)
|
|
(20,982
|
)
|
|
(8,561
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense/(benefit)
|
(21,029
|
)
|
|
2,315
|
|
|
(20,969
|
)
|
|
1,886
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income/(loss) from discontinued operations, net of tax
|
$
|
6,803
|
|
|
$
|
(7,143
|
)
|
|
$
|
(13
|
)
|
|
$
|
(10,447
|
)
|
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
||||
Financial instruments and other inventory positions owned:
|
|
|
|
||||
Corporate securities:
|
|
|
|
||||
Equity securities
|
$
|
3,928
|
|
|
$
|
29,233
|
|
Convertible securities
|
49,822
|
|
|
34,480
|
|
||
Fixed income securities
|
35,358
|
|
|
14,924
|
|
||
Municipal securities:
|
|
|
|
||||
Taxable securities
|
137,711
|
|
|
231,999
|
|
||
Tax-exempt securities
|
457,866
|
|
|
209,317
|
|
||
Short-term securities
|
84,778
|
|
|
47,387
|
|
||
Asset-backed securities
|
96,728
|
|
|
61,830
|
|
||
U.S. government agency securities
|
240,380
|
|
|
118,387
|
|
||
U.S. government securities
|
11,854
|
|
|
8,266
|
|
||
Derivative contracts
|
36,839
|
|
|
41,758
|
|
||
|
$
|
1,155,264
|
|
|
$
|
797,581
|
|
|
|
|
|
||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
||||
Corporate securities:
|
|
|
|
||||
Equity securities
|
$
|
24,683
|
|
|
$
|
33,737
|
|
Convertible securities
|
365
|
|
|
3,118
|
|
||
Fixed income securities
|
19,027
|
|
|
12,621
|
|
||
Municipal securities:
|
|
|
|
||||
Tax-exempt securities
|
—
|
|
|
3,270
|
|
||
Short-term securities
|
—
|
|
|
145
|
|
||
Asset-backed securities
|
687
|
|
|
11,333
|
|
||
U.S. government agency securities
|
56,037
|
|
|
37,903
|
|
||
U.S. government securities
|
158,543
|
|
|
195,662
|
|
||
Derivative contracts
|
12,354
|
|
|
5,715
|
|
||
|
$
|
271,696
|
|
|
$
|
303,504
|
|
(Dollars in thousands)
|
|
|
|
September 30,
|
|
December 31,
|
||||
Transaction Type or Hedged Security
|
|
Derivative Category
|
|
2012
|
|
2011
|
||||
Customer matched-book
|
|
Interest rate derivative contract
|
|
$
|
5,605,359
|
|
|
$
|
5,848,530
|
|
Trading securities
|
|
Interest rate derivative contract
|
|
326,250
|
|
|
99,750
|
|
||
Trading securities
|
|
Credit default swap index contract
|
|
208,650
|
|
|
188,000
|
|
||
|
|
|
|
$
|
6,140,259
|
|
|
$
|
6,136,280
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(Dollars in thousands)
|
|
|
|
September 30,
|
|
September 30,
|
||||||||||||
Derivative Category
|
|
Operations Category
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Interest rate derivative contract
|
|
Investment banking
|
|
$
|
(440
|
)
|
|
$
|
238
|
|
|
$
|
(2,045
|
)
|
|
$
|
(3,107
|
)
|
Interest rate derivative contract
|
|
Institutional brokerage
|
|
(4,735
|
)
|
|
(10,090
|
)
|
|
(8,003
|
)
|
|
(17,315
|
)
|
||||
Credit default swap index contract
|
|
Institutional brokerage
|
|
(1,782
|
)
|
|
1,416
|
|
|
(1,422
|
)
|
|
1,356
|
|
||||
Foreign currency forward contract
|
|
Other operating expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
|
|
|
|
$
|
(6,957
|
)
|
|
$
|
(8,436
|
)
|
|
$
|
(11,470
|
)
|
|
$
|
(19,007
|
)
|
|
|
|
|
Asset Value at
|
|
|
|
Liability Value at
|
||||
(Dollars in thousands)
|
|
|
|
September 30,
|
|
|
|
September 30,
|
||||
Derivative Category
|
|
Financial Condition Location
|
|
2012
|
|
Financial Condition Location
|
|
2012
|
||||
Interest rate derivative contract
|
|
Financial instruments and other inventory positions owned
|
|
$
|
632,504
|
|
|
Financial instruments and other inventory positions sold, but not yet purchased
|
|
$
|
616,904
|
|
Credit default swap index contract
|
|
Financial instruments and other inventory positions owned
|
|
2,536
|
|
|
Financial instruments and other inventory positions sold, but not yet purchased
|
|
3,342
|
|
||
|
|
|
|
$
|
635,040
|
|
|
|
|
$
|
620,246
|
|
(1)
|
Amounts are disclosed at gross fair value in accordance with the requirement of FASB Accounting Standards Codification Topic 815, “Derivatives and Hedging” (“ASC 815”).
|
|
Valuation
Technique
|
|
Unobservable Input
|
|
Range
|
|
Weighted
Average
|
Assets:
|
|
|
|
|
|
|
|
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
Corporate securities:
|
|
|
|
|
|
|
|
Convertible securities
|
Discounted cash flow
|
|
Option adjusted spreads over the U.S. treasury securities curve
(1)
|
|
3631 - 4326 bps
|
|
4111.0 bps
|
Municipal securities:
|
|
|
|
|
|
|
|
Tax-exempt securities
|
Discounted cash flow
|
|
Debt service coverage ratio
(2)
|
|
11 - 68%
|
|
62.3%
|
Short-term securities
|
Discounted cash flow
|
|
Expected recovery rate (% of par)
(2)
|
|
65%
|
|
65.0%
|
Asset-backed securities:
|
|
|
|
|
|
|
|
Collateralized by residential mortgages
|
Discounted cash flow
|
|
Credit default rates
(3)
|
|
4 - 16%
|
|
8.3%
|
|
|
|
Prepayment rates
(4)
|
|
2 - 16%
|
|
9.6%
|
|
|
|
Loss severity
(3)
|
|
48 - 95%
|
|
78.9%
|
|
|
|
Valuation yields
(3)
|
|
6 - 9%
|
|
7.4%
|
Derivative contracts:
|
|
|
|
|
|
|
|
Interest rate locks
|
Discounted cash flow
|
|
Unamortized premium over the MMD curve
(1)
|
|
8 - 31 bps
|
|
14.9 bps
|
Investments:
|
|
|
|
|
|
|
|
Warrants in public and private companies
|
Black-Scholes option pricing model
|
|
Liquidity discount rates
(1)
|
|
30 - 40%
|
|
35.6%
|
Warrants in private companies
|
Black-Scholes option pricing model
|
|
Stock volatility factors of comparable companies
(2)
|
|
35 - 133%
|
|
80.5%
|
Equity securities in private companies
|
Discounted cash flow/ Market approach
|
|
Revenue multiple
(2)
|
|
2 - 4 times
|
|
3.3 times
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
Derivative contracts:
|
|
|
|
|
|
|
|
Interest rate locks
|
Discounted cash flow
|
|
Unamortized premium over the MMD curve
(1)
|
|
2 - 32 bps
|
|
13.2 bps
|
(1)
|
Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement.
|
(2)
|
Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement.
|
(3)
|
Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields.
|
(4)
|
The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value.
|
(Dollars in thousands)
|
Level I
|
|
Level II
|
|
Level III
|
|
Counterparty and Cash Collateral Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
1,099
|
|
|
$
|
2,829
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,928
|
|
Convertible securities
|
—
|
|
|
37,361
|
|
|
12,461
|
|
|
—
|
|
|
49,822
|
|
|||||
Fixed income securities
|
—
|
|
|
35,358
|
|
|
—
|
|
|
—
|
|
|
35,358
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable securities
|
—
|
|
|
137,711
|
|
|
—
|
|
|
—
|
|
|
137,711
|
|
|||||
Tax-exempt securities
|
—
|
|
|
456,340
|
|
|
1,526
|
|
|
—
|
|
|
457,866
|
|
|||||
Short-term securities
|
—
|
|
|
84,342
|
|
|
436
|
|
|
—
|
|
|
84,778
|
|
|||||
Asset-backed securities
|
—
|
|
|
1,258
|
|
|
95,470
|
|
|
—
|
|
|
96,728
|
|
|||||
U.S. government agency securities
|
—
|
|
|
240,380
|
|
|
—
|
|
|
—
|
|
|
240,380
|
|
|||||
U.S. government securities
|
11,854
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,854
|
|
|||||
Derivative contracts
|
—
|
|
|
634,400
|
|
|
640
|
|
|
(598,201
|
)
|
|
36,839
|
|
|||||
Total financial instruments and other inventory positions owned:
|
12,953
|
|
|
1,629,979
|
|
|
110,533
|
|
|
(598,201
|
)
|
|
1,155,264
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash equivalents
|
12,577
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,577
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
5,670
|
|
|
—
|
|
|
33,629
|
|
|
—
|
|
|
39,299
|
|
|||||
Total assets
|
$
|
31,200
|
|
|
$
|
1,629,979
|
|
|
$
|
144,162
|
|
|
$
|
(598,201
|
)
|
|
$
|
1,207,140
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
24,683
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,683
|
|
Convertible securities
|
—
|
|
|
365
|
|
|
—
|
|
|
—
|
|
|
365
|
|
|||||
Fixed income securities
|
—
|
|
|
19,027
|
|
|
—
|
|
|
—
|
|
|
19,027
|
|
|||||
Asset-backed securities
|
—
|
|
|
687
|
|
|
—
|
|
|
—
|
|
|
687
|
|
|||||
U.S. government agency securities
|
—
|
|
|
56,037
|
|
|
—
|
|
|
—
|
|
|
56,037
|
|
|||||
U.S. government securities
|
158,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158,543
|
|
|||||
Derivative contracts
|
—
|
|
|
608,008
|
|
|
12,238
|
|
|
(607,892
|
)
|
|
12,354
|
|
|||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
183,226
|
|
|
$
|
684,124
|
|
|
$
|
12,238
|
|
|
$
|
(607,892
|
)
|
|
$
|
271,696
|
|
(1)
|
Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties.
|
(Dollars in thousands)
|
Level I
|
|
Level II
|
|
Level III
|
|
Counterparty
and Cash
Collateral
Netting (1)
|
|
Total
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
25,039
|
|
|
$
|
4,194
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,233
|
|
Convertible securities
|
—
|
|
|
34,480
|
|
|
—
|
|
|
—
|
|
|
34,480
|
|
|||||
Fixed income securities
|
—
|
|
|
12,109
|
|
|
2,815
|
|
|
—
|
|
|
14,924
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Taxable securities
|
—
|
|
|
231,999
|
|
|
—
|
|
|
—
|
|
|
231,999
|
|
|||||
Tax-exempt securities
|
—
|
|
|
206,182
|
|
|
3,135
|
|
|
—
|
|
|
209,317
|
|
|||||
Short-term securities
|
—
|
|
|
47,212
|
|
|
175
|
|
|
—
|
|
|
47,387
|
|
|||||
Asset-backed securities
|
—
|
|
|
8,742
|
|
|
53,088
|
|
|
—
|
|
|
61,830
|
|
|||||
U.S. government agency securities
|
—
|
|
|
118,387
|
|
|
—
|
|
|
—
|
|
|
118,387
|
|
|||||
U.S. government securities
|
8,266
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,266
|
|
|||||
Derivative contracts
|
—
|
|
|
628,121
|
|
|
—
|
|
|
(586,363
|
)
|
|
41,758
|
|
|||||
Total financial instruments and other inventory positions owned:
|
33,305
|
|
|
1,291,426
|
|
|
59,213
|
|
|
(586,363
|
)
|
|
797,581
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash equivalents
|
65,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65,690
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments
|
5,159
|
|
|
—
|
|
|
21,341
|
|
|
—
|
|
|
26,500
|
|
|||||
Total assets
|
$
|
104,154
|
|
|
$
|
1,291,426
|
|
|
$
|
80,554
|
|
|
$
|
(586,363
|
)
|
|
$
|
889,771
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
$
|
33,495
|
|
|
$
|
242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,737
|
|
Convertible securities
|
—
|
|
|
1,947
|
|
|
1,171
|
|
|
—
|
|
|
3,118
|
|
|||||
Fixed income securities
|
—
|
|
|
11,721
|
|
|
900
|
|
|
—
|
|
|
12,621
|
|
|||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax-exempt securities
|
—
|
|
|
3,270
|
|
|
—
|
|
|
—
|
|
|
3,270
|
|
|||||
Short-term securities
|
—
|
|
|
145
|
|
|
—
|
|
|
—
|
|
|
145
|
|
|||||
Asset-backed securities
|
—
|
|
|
11,333
|
|
|
—
|
|
|
—
|
|
|
11,333
|
|
|||||
U.S. government agency securities
|
—
|
|
|
37,903
|
|
|
—
|
|
|
—
|
|
|
37,903
|
|
|||||
U.S. government securities
|
195,662
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,662
|
|
|||||
Derivative contracts
|
—
|
|
|
599,627
|
|
|
3,594
|
|
|
(597,506
|
)
|
|
5,715
|
|
|||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
229,157
|
|
|
$
|
666,188
|
|
|
$
|
5,665
|
|
|
$
|
(597,506
|
)
|
|
$
|
303,504
|
|
(1)
|
Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties.
|
(Dollars in thousands)
|
Balance at June 30, 2012
|
|
Purchases
|
|
Sales
|
|
Transfers in
|
|
Transfers out
|
|
Realized
gains/
(losses) (1)
|
|
Unrealized
gains/
(losses) (1)
|
|
Balance at September 30, 2012
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible securities
|
$
|
3,681
|
|
|
$
|
27,142
|
|
|
$
|
(21,249
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,051
|
|
|
$
|
836
|
|
|
$
|
12,461
|
|
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Tax-exempt securities
|
2,373
|
|
|
20
|
|
|
(1,102
|
)
|
|
266
|
|
|
—
|
|
|
(584
|
)
|
|
553
|
|
|
1,526
|
|
||||||||
Short-term securities
|
394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
436
|
|
||||||||
Asset-backed securities
|
89,871
|
|
|
107,239
|
|
|
(122,943
|
)
|
|
—
|
|
|
—
|
|
|
18,117
|
|
|
3,186
|
|
|
95,470
|
|
||||||||
Derivative contracts
|
216
|
|
|
—
|
|
|
(975
|
)
|
|
—
|
|
|
—
|
|
|
975
|
|
|
424
|
|
|
640
|
|
||||||||
Total financial instruments and other inventory positions owned:
|
96,535
|
|
|
134,401
|
|
|
(146,269
|
)
|
|
266
|
|
|
—
|
|
|
20,559
|
|
|
5,041
|
|
|
110,533
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
19,864
|
|
|
14,000
|
|
|
—
|
|
|
—
|
|
|
(266
|
)
|
|
—
|
|
|
31
|
|
|
33,629
|
|
||||||||
Total assets
|
$
|
116,399
|
|
|
$
|
148,401
|
|
|
$
|
(146,269
|
)
|
|
$
|
266
|
|
|
$
|
(266
|
)
|
|
$
|
20,559
|
|
|
$
|
5,072
|
|
|
$
|
144,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative contracts
|
7,079
|
|
|
(9,438
|
)
|
|
54
|
|
|
—
|
|
|
—
|
|
|
9,384
|
|
|
5,159
|
|
|
12,238
|
|
||||||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
7,079
|
|
|
$
|
(9,438
|
)
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,384
|
|
|
$
|
5,159
|
|
|
$
|
12,238
|
|
(Dollars in thousands)
|
Balance at June 30, 2011
|
|
Purchases
|
|
Sales
|
|
Transfers in
|
|
Transfers out
|
|
Realized
gains/
(losses) (1)
|
|
Unrealized
gains/
(losses) (1)
|
|
Balance at September 30, 2011
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible securities
|
3,603
|
|
|
21,138
|
|
|
(15,948
|
)
|
|
2,316
|
|
|
(3,603
|
)
|
|
(230
|
)
|
|
(1,597
|
)
|
|
5,679
|
|
||||||||
Fixed income securities
|
459
|
|
|
657
|
|
|
(498
|
)
|
|
3,003
|
|
|
—
|
|
|
(4
|
)
|
|
112
|
|
|
3,729
|
|
||||||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Tax-exempt securities
|
4,193
|
|
|
13,799
|
|
|
(10,311
|
)
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(27
|
)
|
|
7,694
|
|
||||||||
Short-term securities
|
175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||||||
Asset-backed securities
|
35,205
|
|
|
69,624
|
|
|
(39,342
|
)
|
|
3,595
|
|
|
(2,012
|
)
|
|
(144
|
)
|
|
274
|
|
|
67,200
|
|
||||||||
U.S. government agency securities
|
—
|
|
|
121
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
72
|
|
||||||||
Derivative contracts
|
935
|
|
|
935
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(935
|
)
|
|
208
|
|
|
1,143
|
|
||||||||
Total financial instruments and other inventory positions owned:
|
44,570
|
|
|
106,274
|
|
|
(66,147
|
)
|
|
8,914
|
|
|
(5,615
|
)
|
|
(1,273
|
)
|
|
(1,031
|
)
|
|
85,692
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
20,648
|
|
|
5,866
|
|
|
—
|
|
|
—
|
|
|
(4,725
|
)
|
|
—
|
|
|
169
|
|
|
21,958
|
|
||||||||
Total assets
|
$
|
65,218
|
|
|
$
|
112,140
|
|
|
$
|
(66,147
|
)
|
|
$
|
8,914
|
|
|
$
|
(10,340
|
)
|
|
$
|
(1,273
|
)
|
|
$
|
(862
|
)
|
|
$
|
107,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income securities
|
3,278
|
|
|
(4,727
|
)
|
|
3,986
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(39
|
)
|
|
2,467
|
|
||||||||
Asset-backed securities
|
—
|
|
|
(1,982
|
)
|
|
35
|
|
|
3,643
|
|
|
—
|
|
|
(62
|
)
|
|
(27
|
)
|
|
1,607
|
|
||||||||
Derivative contracts
|
4,385
|
|
|
(2,185
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,185
|
|
|
10,297
|
|
|
14,682
|
|
||||||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
7,663
|
|
|
$
|
(8,894
|
)
|
|
$
|
4,021
|
|
|
$
|
3,643
|
|
|
$
|
—
|
|
|
$
|
2,092
|
|
|
$
|
10,231
|
|
|
$
|
18,756
|
|
(1)
|
Realized and unrealized gains/(losses) related to financial instruments, with the exception of foreign currency forward contracts and customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to foreign currency forward contracts are recorded in other operating expenses. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or other income/(loss) on the consolidated statements of operations.
|
(Dollars in thousands)
|
Balance at December 31, 2011
|
|
Purchases
|
|
Sales
|
|
Transfers in
|
|
Transfers out
|
|
Realized
gains/
(losses) (1)
|
|
Unrealized
gains/
(losses) (1)
|
|
Balance at September 30, 2012
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible securities
|
$
|
—
|
|
|
$
|
30,272
|
|
|
$
|
(23,400
|
)
|
|
$
|
2,960
|
|
|
$
|
—
|
|
|
$
|
2,010
|
|
|
$
|
619
|
|
|
$
|
12,461
|
|
Fixed income securities
|
2,815
|
|
|
38,433
|
|
|
(37,149
|
)
|
|
226
|
|
|
(4,263
|
)
|
|
49
|
|
|
(111
|
)
|
|
—
|
|
||||||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Tax-exempt securities
|
3,135
|
|
|
1,570
|
|
|
(2,997
|
)
|
|
266
|
|
|
—
|
|
|
(1,156
|
)
|
|
708
|
|
|
1,526
|
|
||||||||
Short-term securities
|
175
|
|
|
3,075
|
|
|
(1,755
|
)
|
|
—
|
|
|
—
|
|
|
(945
|
)
|
|
(114
|
)
|
|
436
|
|
||||||||
Asset-backed securities
|
53,088
|
|
|
279,014
|
|
|
(262,383
|
)
|
|
—
|
|
|
—
|
|
|
19,713
|
|
|
6,038
|
|
|
95,470
|
|
||||||||
Derivative contracts
|
—
|
|
|
—
|
|
|
(3,264
|
)
|
|
—
|
|
|
—
|
|
|
3,264
|
|
|
640
|
|
|
640
|
|
||||||||
Total financial instruments and other inventory positions owned:
|
59,213
|
|
|
352,364
|
|
|
(330,948
|
)
|
|
3,452
|
|
|
(4,263
|
)
|
|
22,935
|
|
|
7,780
|
|
|
110,533
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
21,341
|
|
|
14,000
|
|
|
(3
|
)
|
|
—
|
|
|
(266
|
)
|
|
3
|
|
|
(1,446
|
)
|
|
33,629
|
|
||||||||
Total assets
|
$
|
80,554
|
|
|
$
|
366,364
|
|
|
$
|
(330,951
|
)
|
|
$
|
3,452
|
|
|
$
|
(4,529
|
)
|
|
$
|
22,938
|
|
|
$
|
6,334
|
|
|
$
|
144,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible securities
|
$
|
1,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,171
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed income securities
|
900
|
|
|
(897
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
46
|
|
|
—
|
|
||||||||
Derivative contracts
|
3,594
|
|
|
(18,858
|
)
|
|
1,434
|
|
|
—
|
|
|
—
|
|
|
17,424
|
|
|
8,644
|
|
|
12,238
|
|
||||||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
5,665
|
|
|
$
|
(19,755
|
)
|
|
$
|
1,434
|
|
|
$
|
—
|
|
|
$
|
(1,171
|
)
|
|
$
|
17,375
|
|
|
$
|
8,690
|
|
|
$
|
12,238
|
|
(Dollars in thousands)
|
Balance at December 31, 2010
|
|
Purchases
|
|
Sales
|
|
Transfers in
|
|
Transfers out
|
|
Realized
gains/
(losses) (1)
|
|
Unrealized
gains/
(losses) (1)
|
|
Balance at September 30, 2011
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions owned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities
|
$
|
1,340
|
|
|
$
|
—
|
|
|
$
|
(1,467
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible securities
|
2,885
|
|
|
101,985
|
|
|
(97,622
|
)
|
|
2,550
|
|
|
(2,885
|
)
|
|
729
|
|
|
(1,963
|
)
|
|
5,679
|
|
||||||||
Fixed income securities
|
6,268
|
|
|
24,435
|
|
|
(27,437
|
)
|
|
198
|
|
|
—
|
|
|
113
|
|
|
152
|
|
|
3,729
|
|
||||||||
Municipal securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Tax-exempt securities
|
6,118
|
|
|
13,799
|
|
|
(15,934
|
)
|
|
3,791
|
|
|
—
|
|
|
47
|
|
|
(127
|
)
|
|
7,694
|
|
||||||||
Short-term securities
|
125
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||||||
Asset-backed securities
|
45,170
|
|
|
128,641
|
|
|
(106,609
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(5
|
)
|
|
67,200
|
|
||||||||
U.S. government agency securities
|
—
|
|
|
121
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
72
|
|
||||||||
Derivative contracts
|
4,665
|
|
|
2,141
|
|
|
(2,363
|
)
|
|
—
|
|
|
—
|
|
|
222
|
|
|
(3,522
|
)
|
|
1,143
|
|
||||||||
Total financial instruments and other inventory positions owned:
|
66,571
|
|
|
271,172
|
|
|
(251,480
|
)
|
|
6,539
|
|
|
(2,885
|
)
|
|
1,241
|
|
|
(5,466
|
)
|
|
85,692
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investments
|
9,682
|
|
|
14,421
|
|
|
(688
|
)
|
|
—
|
|
|
(4,536
|
)
|
|
688
|
|
|
2,391
|
|
|
21,958
|
|
||||||||
Total assets
|
$
|
76,253
|
|
|
$
|
285,593
|
|
|
$
|
(252,168
|
)
|
|
$
|
6,539
|
|
|
$
|
(7,421
|
)
|
|
$
|
1,929
|
|
|
$
|
(3,075
|
)
|
|
$
|
107,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible securities
|
$
|
1,777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,777
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed income securities
|
2,323
|
|
|
(2,581
|
)
|
|
4,613
|
|
|
—
|
|
|
(1,838
|
)
|
|
(21
|
)
|
|
(29
|
)
|
|
2,467
|
|
||||||||
Asset-backed securities
|
2,115
|
|
|
(4,925
|
)
|
|
841
|
|
|
3,643
|
|
|
—
|
|
|
19
|
|
|
(86
|
)
|
|
1,607
|
|
||||||||
Derivative contracts
|
339
|
|
|
(1,482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,482
|
|
|
14,343
|
|
|
14,682
|
|
||||||||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
6,554
|
|
|
$
|
(8,988
|
)
|
|
$
|
5,454
|
|
|
$
|
3,643
|
|
|
$
|
(3,615
|
)
|
|
$
|
1,480
|
|
|
$
|
14,228
|
|
|
$
|
18,756
|
|
(1)
|
Realized and unrealized gains/(losses) related to financial instruments, with the exception of foreign currency forward contracts and customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to foreign currency forward contracts are recorded in other operating expenses. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or other income/(loss) on the consolidated statements of operations.
|
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
||||
Receivable arising from unsettled securities transactions
|
$
|
80,818
|
|
|
$
|
279
|
|
Deposits paid for securities borrowed
|
35,327
|
|
|
46,298
|
|
||
Receivable from clearing organizations
|
4,380
|
|
|
20,453
|
|
||
Deposits with clearing organizations
|
30,251
|
|
|
31,061
|
|
||
Securities failed to deliver
|
9,152
|
|
|
23,140
|
|
||
Other
|
9,527
|
|
|
3,430
|
|
||
|
$
|
169,455
|
|
|
$
|
124,661
|
|
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
||||
Payable arising from unsettled securities transactions, net
|
$
|
119,089
|
|
|
$
|
29,005
|
|
Payable to clearing organizations
|
15,435
|
|
|
3,064
|
|
||
Securities failed to receive
|
8,837
|
|
|
1,402
|
|
||
Other
|
7,941
|
|
|
1,965
|
|
||
|
$
|
151,302
|
|
|
$
|
35,436
|
|
(Dollars in thousands)
|
Repurchase
Liabilities
|
|
Fair Market
Value
|
|
Interest Rate
|
||||
Term over 90 day maturities:
|
|
|
|
|
|
||||
Municipal securities:
|
|
|
|
|
|
||||
Tax-exempt securities
|
$
|
42,601
|
|
|
$
|
51,084
|
|
|
1.90%
|
Short-term securities
|
7,399
|
|
|
8,879
|
|
|
1.90%
|
||
|
$
|
50,000
|
|
|
$
|
59,963
|
|
|
|
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
||||
Net deferred income tax assets
|
$
|
39,024
|
|
|
$
|
45,080
|
|
Investments at fair value
|
39,299
|
|
|
26,500
|
|
||
Investments at cost
|
26,739
|
|
|
25,672
|
|
||
Investments accounted for under the equity method
|
18,553
|
|
|
16,157
|
|
||
Income tax receivables
|
8,496
|
|
|
—
|
|
||
Prepaid expenses
|
4,651
|
|
|
6,036
|
|
||
Other
|
1,223
|
|
|
1,858
|
|
||
Total other assets
|
$
|
137,985
|
|
|
$
|
121,303
|
|
|
Asset
|
||
(Dollars in thousands)
|
Management
|
||
Goodwill
|
|
||
Balance at December 31, 2011
|
$
|
202,352
|
|
Goodwill acquired
|
—
|
|
|
Impairment charge
|
—
|
|
|
Balance at September 30, 2012
|
$
|
202,352
|
|
|
|
||
Intangible assets
|
|
||
Balance at December 31, 2011
|
$
|
51,304
|
|
Amortization of intangible assets
|
(5,751
|
)
|
|
Balance at September 30, 2012
|
$
|
45,553
|
|
|
Outstanding Balance
|
|
Weighted Average Interest Rate as of
|
||||||||
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
|
September 30,
2012 |
|
December 31,
2011 |
||||
Prime broker arrangement
|
$
|
152,763
|
|
|
$
|
2,526
|
|
|
0.96%
|
|
1.05%
|
Commercial paper (secured)
|
293,709
|
|
|
166,175
|
|
|
1.92%
|
|
1.37%
|
||
Total short-term financing
|
$
|
446,472
|
|
|
$
|
168,701
|
|
|
|
|
|
|
Outstanding Balance
|
|
Weighted Average
Interest Rate as of
|
||||||||
(Dollars in thousands)
|
September 30,
2012 |
|
December 31,
2011 |
|
September 30,
2012 |
|
December 31,
2011 |
||||
Term loan
|
$
|
58,488
|
|
|
$
|
90,000
|
|
|
2.97%
|
|
3.05%
|
Revolving credit facility
|
25,000
|
|
|
25,000
|
|
|
2.97%
|
|
3.05%
|
||
Total bank syndicated financing
|
$
|
83,488
|
|
|
$
|
115,000
|
|
|
|
|
|
(Dollars in thousands)
|
|
||
Remainder of 2012
|
$
|
3,307
|
|
2013
|
12,523
|
|
|
2014
|
9,939
|
|
|
2015
|
8,683
|
|
|
2016
|
8,865
|
|
|
Thereafter
|
42,151
|
|
|
|
$
|
85,468
|
|
(Dollars in thousands)
|
Common
Shareholders’
Equity
|
|
Noncontrolling Interests
|
|
Total
Shareholders’
Equity
|
||||||
Balance at December 31, 2011
|
$
|
718,391
|
|
|
$
|
32,209
|
|
|
$
|
750,600
|
|
Net income
|
29,444
|
|
|
2,671
|
|
|
32,115
|
|
|||
Amortization/issuance of restricted stock
|
15,111
|
|
|
—
|
|
|
15,111
|
|
|||
Other comprehensive income
|
131
|
|
|
—
|
|
|
131
|
|
|||
Repurchase of common stock through share repurchase program
|
(33,468
|
)
|
|
—
|
|
|
(33,468
|
)
|
|||
Repurchase of common stock for employee tax withholding
|
(9,046
|
)
|
|
—
|
|
|
(9,046
|
)
|
|||
Issuance of treasury shares for 401k match
|
3,814
|
|
|
—
|
|
|
3,814
|
|
|||
Shares reserved to meet deferred compensation obligations
|
239
|
|
|
—
|
|
|
239
|
|
|||
Fund capital contributions
|
—
|
|
|
11,084
|
|
|
11,084
|
|
|||
Fund capital withdrawals
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||
Balance at September 30, 2012
|
$
|
724,616
|
|
|
$
|
45,960
|
|
|
$
|
770,576
|
|
(1)
|
The Company issued restricted stock as part of deal consideration for ARI.
|
|
Unvested
Restricted
Stock
|
|
Weighted Average
Grant Date
Fair Value
|
|||
December 31, 2011
|
3,152,001
|
|
|
$
|
38.79
|
|
Granted
|
635,136
|
|
|
22.89
|
|
|
Vested
|
(1,164,618
|
)
|
|
33.23
|
|
|
Cancelled
|
(102,160
|
)
|
|
38.23
|
|
|
September 30, 2012
|
2,520,359
|
|
|
$
|
37.37
|
|
|
Unvested
Restricted
Stock Units
|
|
Weighted Average
Grant Date
Fair Value
|
|||
December 31, 2011
|
—
|
|
|
$
|
—
|
|
Granted
|
214,526
|
|
|
12.12
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Cancelled
|
(16,502
|
)
|
|
12.12
|
|
|
September 30, 2012
|
198,024
|
|
|
$
|
12.12
|
|
|
Options
Outstanding
|
|
Weighted Average
Exercise Price
|
|
Weighted Average Remaining Contractual Term (in Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
December 31, 2011
|
502,623
|
|
|
$
|
44.71
|
|
|
3.9
|
|
$
|
—
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
Cancelled
|
(3,370
|
)
|
|
41.48
|
|
|
|
|
|
|||
September 30, 2012
|
499,253
|
|
|
$
|
44.73
|
|
|
3.1
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|||||
Options exercisable at September 30, 2012
|
499,253
|
|
|
$
|
44.73
|
|
|
3.1
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Amounts in thousands, except per share data)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Income from continuing operations applicable to Piper Jaffray Companies
|
$
|
12,861
|
|
|
$
|
3,560
|
|
|
$
|
29,457
|
|
|
$
|
24,791
|
|
Income/(loss) from discontinued operations, net of tax
|
6,803
|
|
|
(7,143
|
)
|
|
(13
|
)
|
|
(10,447
|
)
|
||||
Net income/(loss) applicable to Piper Jaffray Companies
|
19,664
|
|
|
(3,583
|
)
|
|
29,444
|
|
|
14,344
|
|
||||
Earnings allocated to participating securities
(1)
|
(2,824
|
)
|
|
—
|
|
|
(4,293
|
)
|
|
(2,696
|
)
|
||||
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders
(2)
|
$
|
16,840
|
|
|
$
|
(3,583
|
)
|
|
$
|
25,151
|
|
|
$
|
11,648
|
|
|
|
|
|
|
|
|
|
||||||||
Shares for basic and diluted calculations:
|
|
|
|
|
|
|
|
||||||||
Average shares used in basic computation
|
15,210
|
|
|
15,889
|
|
|
15,736
|
|
|
15,638
|
|
||||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Restricted stock
|
—
|
|
|
2,730
|
|
|
—
|
|
|
—
|
|
||||
Average shares used in diluted computation
|
15,210
|
|
|
18,619
|
|
(3)
|
15,736
|
|
|
15,655
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings/(loss) per basic common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.72
|
|
|
$
|
0.22
|
|
|
$
|
1.60
|
|
|
$
|
1.29
|
|
Income/(loss) from discontinued operations
|
0.38
|
|
|
(0.45
|
)
|
|
—
|
|
|
(0.54
|
)
|
||||
Earnings/(loss) per basic common share
|
$
|
1.11
|
|
|
$
|
(0.23
|
)
|
|
$
|
1.60
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
||||||||
Earnins/(loss) per diluted common share:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
0.72
|
|
|
$
|
0.22
|
|
|
$
|
1.60
|
|
|
$
|
1.29
|
|
Income/(loss) from discontinued operations
|
0.38
|
|
|
(0.45
|
)
|
|
—
|
|
|
(0.54
|
)
|
||||
Earnings/(loss) per diluted common share
|
$
|
1.11
|
|
|
$
|
(0.23
|
)
|
(3)
|
$
|
1.60
|
|
|
$
|
0.74
|
|
(1)
|
Represents the allocation of earnings to participating securities. Losses are not allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were
2,550,888
and
3,326,973
for the
three
months ended
September 30, 2012
and
2011
, respectively, and
2,686,255
and
3,624,463
for the
nine
months ended
September 30, 2012
and
2011
, respectively.
|
(2)
|
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS.
|
(3)
|
Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss in incurred.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Capital Markets
|
|
|
|
|
|
|
|
||||||||
Investment banking
|
|
|
|
|
|
|
|
||||||||
Financing
|
|
|
|
|
|
|
|
||||||||
Equities
|
$
|
18,781
|
|
|
$
|
6,569
|
|
|
$
|
55,141
|
|
|
$
|
58,682
|
|
Debt
|
16,573
|
|
|
11,105
|
|
|
53,598
|
|
|
39,354
|
|
||||
Advisory services
|
16,317
|
|
|
26,951
|
|
|
41,670
|
|
|
55,763
|
|
||||
Total investment banking
|
51,671
|
|
|
44,625
|
|
|
150,409
|
|
|
153,799
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Institutional sales and trading
|
|
|
|
|
|
|
|
||||||||
Equities
|
17,927
|
|
|
22,020
|
|
|
55,589
|
|
|
66,028
|
|
||||
Fixed income
|
46,690
|
|
|
13,681
|
|
|
95,773
|
|
|
65,920
|
|
||||
Total institutional sales and trading
|
64,617
|
|
|
35,701
|
|
|
151,362
|
|
|
131,948
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income/(loss)
|
(1,039
|
)
|
|
1,072
|
|
|
(2,141
|
)
|
|
5,953
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
115,249
|
|
|
81,398
|
|
|
299,630
|
|
|
291,700
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
94,671
|
|
|
77,694
|
|
|
266,529
|
|
|
264,599
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Segment pre-tax operating income
|
$
|
20,578
|
|
|
$
|
3,704
|
|
|
$
|
33,101
|
|
|
$
|
27,101
|
|
|
|
|
|
|
|
|
|
||||||||
Segment pre-tax operating margin
|
17.9
|
%
|
|
4.6
|
%
|
|
11.0
|
%
|
|
9.3
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Asset Management
|
|
|
|
|
|
|
|
||||||||
Management and performance fees
|
|
|
|
|
|
|
|
||||||||
Management fees
|
$
|
17,252
|
|
|
$
|
15,149
|
|
|
$
|
51,441
|
|
|
$
|
50,946
|
|
Performance fees
|
22
|
|
|
—
|
|
|
664
|
|
|
1,746
|
|
||||
Total management and performance fees
|
17,274
|
|
|
15,149
|
|
|
52,105
|
|
|
52,692
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income/(loss)
|
434
|
|
|
(690
|
)
|
|
534
|
|
|
(375
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
17,708
|
|
|
14,459
|
|
|
52,639
|
|
|
52,317
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses (1)
|
15,572
|
|
|
13,035
|
|
|
42,247
|
|
|
41,889
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Segment pre-tax operating income
|
$
|
2,136
|
|
|
$
|
1,424
|
|
|
$
|
10,392
|
|
|
$
|
10,428
|
|
|
|
|
|
|
|
|
|
||||||||
Segment pre-tax operating margin
|
12.1
|
%
|
|
9.8
|
%
|
|
19.7
|
%
|
|
19.9
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net revenues
|
$
|
132,957
|
|
|
$
|
95,857
|
|
|
$
|
352,269
|
|
|
$
|
344,017
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses (1)
|
110,243
|
|
|
90,729
|
|
|
308,776
|
|
|
306,488
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total segment pre-tax operating income
|
$
|
22,714
|
|
|
$
|
5,128
|
|
|
$
|
43,493
|
|
|
$
|
37,529
|
|
|
|
|
|
|
|
|
|
||||||||
Pre-tax operating margin
|
17.1
|
%
|
|
5.3
|
%
|
|
12.3
|
%
|
|
10.9
|
%
|
(1)
|
Operating expenses include intangible asset amortization expense of
$1.9 million
and
$2.1 million
for the
three
months ended
September 30, 2012
and
2011
, respectively, and
$5.8 million
and
$6.2 million
for the
nine
months ended
September 30, 2012
and
2011
, respectively.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
130,032
|
|
|
$
|
92,083
|
|
|
$
|
343,955
|
|
|
$
|
327,412
|
|
Europe
|
2,925
|
|
|
3,774
|
|
|
8,314
|
|
|
16,605
|
|
||||
Consolidated
|
$
|
132,957
|
|
|
$
|
95,857
|
|
|
$
|
352,269
|
|
|
$
|
344,017
|
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
Long-lived assets:
|
|
|
|
||||
United States
|
$
|
301,834
|
|
|
$
|
317,187
|
|
Asia
|
—
|
|
|
2,055
|
|
||
Europe
|
1,746
|
|
|
1,287
|
|
||
Consolidated
|
$
|
303,580
|
|
|
$
|
320,529
|
|
|
|
|
|
|
|
|
As a Percentage of
|
|||||||||
|
Three Months Ended
|
|
Net Revenues for the
|
|||||||||||||
|
September 30,
|
|
Three Months Ended
|
|||||||||||||
|
|
|
|
|
2012
|
|
September 30,
|
|||||||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|
2012
|
|
2011
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Investment banking
|
$
|
51,083
|
|
|
$
|
44,031
|
|
|
16.0
|
%
|
|
38.4
|
%
|
|
45.9
|
%
|
Institutional brokerage
|
58,719
|
|
|
28,689
|
|
|
104.7
|
|
|
44.2
|
|
|
29.9
|
|
||
Asset management
|
17,588
|
|
|
15,205
|
|
|
15.7
|
|
|
13.2
|
|
|
15.9
|
|
||
Interest
|
12,457
|
|
|
15,116
|
|
|
(17.6
|
)
|
|
9.4
|
|
|
15.8
|
|
||
Other income
|
235
|
|
|
1,710
|
|
|
(86.3
|
)
|
|
0.2
|
|
|
1.8
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenues
|
140,082
|
|
|
104,751
|
|
|
33.7
|
|
|
105.4
|
|
|
109.3
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
7,125
|
|
|
8,894
|
|
|
(19.9
|
)
|
|
5.4
|
|
|
9.3
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net revenues
|
132,957
|
|
|
95,857
|
|
|
38.7
|
|
|
100.0
|
|
|
100.0
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits
|
78,738
|
|
|
60,505
|
|
|
30.1
|
|
|
59.2
|
|
|
63.1
|
|
||
Occupancy and equipment
|
6,232
|
|
|
6,638
|
|
|
(6.1
|
)
|
|
4.7
|
|
|
6.9
|
|
||
Communications
|
5,374
|
|
|
5,595
|
|
|
(3.9
|
)
|
|
4.0
|
|
|
5.8
|
|
||
Floor brokerage and clearance
|
1,827
|
|
|
2,143
|
|
|
(14.7
|
)
|
|
1.4
|
|
|
2.2
|
|
||
Marketing and business development
|
4,285
|
|
|
5,059
|
|
|
(15.3
|
)
|
|
3.2
|
|
|
5.3
|
|
||
Outside services
|
7,557
|
|
|
6,263
|
|
|
20.7
|
|
|
5.7
|
|
|
6.5
|
|
||
Intangible asset amortization expense
|
1,917
|
|
|
2,069
|
|
|
(7.3
|
)
|
|
1.4
|
|
|
2.2
|
|
||
Other operating expenses
|
4,313
|
|
|
2,457
|
|
|
75.5
|
|
|
3.2
|
|
|
2.6
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Total non-interest expenses
|
110,243
|
|
|
90,729
|
|
|
21.5
|
|
|
82.9
|
|
|
94.7
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations before income tax expense
|
22,714
|
|
|
5,128
|
|
|
342.9
|
|
|
17.1
|
|
|
5.3
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income tax expense
|
9,188
|
|
|
1,361
|
|
|
575.1
|
|
|
6.9
|
|
|
1.4
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations
|
13,526
|
|
|
3,767
|
|
|
259.1
|
|
|
10.2
|
|
|
3.9
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|||||||
Income/(loss) from discontinued operations, net of tax
|
6,803
|
|
|
(7,143
|
)
|
|
N/M
|
|
|
5.1
|
|
|
(7.5
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income/(loss)
|
20,329
|
|
|
(3,376
|
)
|
|
N/M
|
|
|
15.3
|
|
|
(3.5
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income applicable to noncontrolling interests
|
665
|
|
|
207
|
|
|
221.3
|
%
|
|
0.5
|
|
|
0.2
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income/(loss) applicable to Piper Jaffray Companies
|
$
|
19,664
|
|
|
$
|
(3,583
|
)
|
|
N/M
|
|
|
14.8
|
%
|
|
(3.7
|
)%
|
|
Three Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues
|
|
|
|
|
|
|||||
Capital Markets
|
$
|
115,249
|
|
|
$
|
81,398
|
|
|
41.6
|
%
|
Asset Management
|
17,708
|
|
|
14,459
|
|
|
22.5
|
|
||
Total net revenues
|
$
|
132,957
|
|
|
$
|
95,857
|
|
|
38.7
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
|
|
|
|
|
|||||
Capital Markets
|
$
|
20,578
|
|
|
3,704
|
|
|
455.6
|
%
|
|
Asset Management
|
2,136
|
|
|
1,424
|
|
|
50.0
|
|
||
Total pre-tax operating income
|
$
|
22,714
|
|
|
$
|
5,128
|
|
|
342.9
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating margin
|
|
|
|
|
|
|||||
Capital Markets
|
17.9
|
%
|
|
4.6
|
%
|
|
|
|||
Asset Management
|
12.1
|
%
|
|
9.8
|
%
|
|
|
|||
Total pre-tax operating margin
|
17.1
|
%
|
|
5.3
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues:
|
|
|
|
|
|
|||||
Investment banking
|
|
|
|
|
|
|||||
Financing
|
|
|
|
|
|
|||||
Equities
|
$
|
18,781
|
|
|
$
|
6,569
|
|
|
185.9
|
%
|
Debt
|
16,573
|
|
|
11,105
|
|
|
49.2
|
|
||
Advisory services
|
16,317
|
|
|
26,951
|
|
|
(39.5
|
)
|
||
Total investment banking
|
51,671
|
|
|
44,625
|
|
|
15.8
|
|
||
|
|
|
|
|
|
|||||
Institutional sales and trading
|
|
|
|
|
|
|||||
Equities
|
17,927
|
|
|
22,020
|
|
|
(18.6
|
)
|
||
Fixed income
|
46,690
|
|
|
13,681
|
|
|
241.3
|
|
||
Total institutional sales and trading
|
64,617
|
|
|
35,701
|
|
|
81.0
|
|
||
|
|
|
|
|
|
|||||
Other income/(loss)
|
(1,039
|
)
|
|
1,072
|
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Total net revenues
|
$
|
115,249
|
|
|
$
|
81,398
|
|
|
41.6
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
$
|
20,578
|
|
|
$
|
3,704
|
|
|
455.6
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating margin
|
17.9
|
%
|
|
4.6
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues:
|
|
|
|
|
|
|||||
Management and performance fees
|
|
|
|
|
|
|||||
Management fees
|
$
|
17,252
|
|
|
$
|
15,149
|
|
|
13.9
|
%
|
Performance fees
|
22
|
|
|
—
|
|
|
N/M
|
|
||
Total management and performance fees
|
17,274
|
|
|
15,149
|
|
|
14.0
|
|
||
|
|
|
|
|
|
|||||
Other income/(loss)
|
434
|
|
|
(690
|
)
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Net revenues
|
$
|
17,708
|
|
|
$
|
14,459
|
|
|
22.5
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
$
|
2,136
|
|
|
$
|
1,424
|
|
|
50.0
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating margin
|
12.1
|
%
|
|
9.8
|
%
|
|
|
|
Three Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
|
|
|
|
|
|
|||||
Net revenues
|
$
|
2,674
|
|
|
$
|
2,124
|
|
|
25.9
|
%
|
|
|
|
|
|
|
|||||
Restructuring expenses
|
11,057
|
|
|
—
|
|
|
N/M
|
|
||
Operating expenses
|
5,843
|
|
|
6,952
|
|
|
(16.0
|
)
|
||
Total non-interest expenses
|
16,900
|
|
|
6,952
|
|
|
143.1
|
%
|
||
|
|
|
|
|
|
|||||
Loss from discontinued operations before income tax expense/(benefit)
|
(14,226
|
)
|
|
(4,828
|
)
|
|
194.7
|
%
|
||
|
|
|
|
|
|
|||||
Income tax expense/(benefit)
|
(21,029
|
)
|
|
2,315
|
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Income/(loss) from discontinued operations, net of tax
|
$
|
6,803
|
|
|
$
|
(7,143
|
)
|
|
N/M
|
|
|
|
|
|
|
|
|
As a Percentage of
|
|||||||||
|
Nine Months Ended
|
|
Net Revenues for the
|
|||||||||||||
|
September 30,
|
|
Nine Months Ended
|
|||||||||||||
|
|
|
|
|
2012
|
|
September 30,
|
|||||||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|
2012
|
|
2011
|
|||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Investment banking
|
$
|
148,536
|
|
|
$
|
151,834
|
|
|
(2.2
|
)%
|
|
42.2
|
%
|
|
44.1
|
%
|
Institutional brokerage
|
134,006
|
|
|
111,732
|
|
|
19.9
|
|
|
38.0
|
|
|
32.6
|
|
||
Asset management
|
52,927
|
|
|
52,774
|
|
|
0.3
|
|
|
15.0
|
|
|
15.3
|
|
||
Interest
|
35,742
|
|
|
42,407
|
|
|
(15.7
|
)
|
|
10.1
|
|
|
12.3
|
|
||
Other income
|
1,242
|
|
|
10,018
|
|
|
(87.6
|
)
|
|
0.4
|
|
|
2.9
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenues
|
372,453
|
|
|
368,765
|
|
|
1.0
|
|
|
105.7
|
|
|
107.2
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
20,184
|
|
|
24,748
|
|
|
(18.4
|
)
|
|
5.7
|
|
|
7.2
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net revenues
|
352,269
|
|
|
344,017
|
|
|
2.4
|
|
|
100.0
|
|
|
100.0
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Non-interest expenses:
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Compensation and benefits
|
211,564
|
|
|
207,591
|
|
|
1.9
|
|
|
60.1
|
|
|
60.3
|
|
||
Occupancy and equipment
|
20,171
|
|
|
22,427
|
|
|
(10.1
|
)
|
|
5.7
|
|
|
6.5
|
|
||
Communications
|
16,421
|
|
|
17,611
|
|
|
(6.8
|
)
|
|
4.7
|
|
|
5.1
|
|
||
Floor brokerage and clearance
|
5,939
|
|
|
6,684
|
|
|
(11.1
|
)
|
|
1.7
|
|
|
1.9
|
|
||
Marketing and business development
|
15,097
|
|
|
16,868
|
|
|
(10.5
|
)
|
|
4.3
|
|
|
4.9
|
|
||
Outside services
|
21,027
|
|
|
20,632
|
|
|
1.9
|
|
|
6.0
|
|
|
6.0
|
|
||
Restructuring-related expense
|
3,642
|
|
|
—
|
|
|
N/M
|
|
|
1.0
|
|
|
—
|
|
||
Intangible asset amortization expense
|
5,751
|
|
|
6,207
|
|
|
(7.3
|
)
|
|
1.6
|
|
|
1.8
|
|
||
Other operating expenses
|
9,164
|
|
|
8,468
|
|
|
8.2
|
|
|
2.6
|
|
|
2.5
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Total non-interest expenses
|
308,776
|
|
|
306,488
|
|
|
0.7
|
|
|
87.7
|
|
|
89.1
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations before income tax expense
|
43,493
|
|
|
37,529
|
|
|
15.9
|
|
|
12.3
|
|
|
10.9
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income tax expense
|
11,365
|
|
|
11,892
|
|
|
(4.4
|
)
|
|
3.2
|
|
|
3.6
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations
|
32,128
|
|
|
25,637
|
|
|
25.3
|
|
|
9.1
|
|
|
7.4
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|||||||
Loss from discontinued operations, net of tax
|
(13
|
)
|
|
(10,447
|
)
|
|
(99.9
|
)
|
|
—
|
|
|
(3.0
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
32,115
|
|
|
15,190
|
|
|
111.4
|
|
|
9.1
|
|
|
4.4
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income applicable to noncontrolling interests
|
2,671
|
|
|
846
|
|
|
215.7
|
|
|
0.8
|
|
|
0.2
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Net income applicable to Piper Jaffray Companies
|
$
|
29,444
|
|
|
$
|
14,344
|
|
|
105.3
|
%
|
|
8.4
|
%
|
|
4.2
|
%
|
|
Nine Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues
|
|
|
|
|
|
|||||
Capital Markets
|
$
|
299,630
|
|
|
$
|
291,700
|
|
|
2.7
|
%
|
Asset Management
|
52,639
|
|
|
52,317
|
|
|
0.6
|
|
||
Total net revenues
|
$
|
352,269
|
|
|
$
|
344,017
|
|
|
2.4
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
|
|
|
|
|
|
|
|||
Capital Markets
|
$
|
33,101
|
|
|
$
|
27,101
|
|
|
22.1
|
%
|
Asset Management
|
10,392
|
|
|
10,428
|
|
|
(0.3
|
)
|
||
Total pre-tax operating income
|
$
|
43,493
|
|
|
$
|
37,529
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|||
Pre-tax operating margin
|
|
|
|
|
|
|||||
Capital Markets
|
11.0
|
%
|
|
9.3
|
%
|
|
|
|||
Asset Management
|
19.7
|
%
|
|
19.9
|
%
|
|
|
|||
Total pre-tax operating margin
|
12.3
|
%
|
|
10.9
|
%
|
|
|
|
Nine Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues:
|
|
|
|
|
|
|||||
Investment banking
|
|
|
|
|
|
|||||
Financing
|
|
|
|
|
|
|||||
Equities
|
$
|
55,141
|
|
|
$
|
58,682
|
|
|
(6.0
|
)%
|
Debt
|
53,598
|
|
|
39,354
|
|
|
36.2
|
|
||
Advisory services
|
41,670
|
|
|
55,763
|
|
|
(25.3
|
)
|
||
Total investment banking
|
150,409
|
|
|
153,799
|
|
|
(2.2
|
)
|
||
|
|
|
|
|
|
|||||
Institutional sales and trading
|
|
|
|
|
|
|||||
Equities
|
55,589
|
|
|
66,028
|
|
|
(15.8
|
)
|
||
Fixed income
|
95,773
|
|
|
65,920
|
|
|
45.3
|
|
||
Total institutional sales and trading
|
151,362
|
|
|
131,948
|
|
|
14.7
|
|
||
|
|
|
|
|
|
|||||
Other income/(loss)
|
(2,141
|
)
|
|
5,953
|
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Net revenues
|
$
|
299,630
|
|
|
$
|
291,700
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
$
|
33,101
|
|
|
$
|
27,101
|
|
|
22.1
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating margin
|
11.0
|
%
|
|
9.3
|
%
|
|
|
|
Nine Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
Net revenues:
|
|
|
|
|
|
|||||
Management and performance fees
|
|
|
|
|
|
|||||
Management fees
|
$
|
51,441
|
|
|
$
|
50,946
|
|
|
1.0
|
%
|
Performance fees
|
664
|
|
|
1,746
|
|
|
(62.0
|
)
|
||
Total management and performance fees
|
52,105
|
|
|
52,692
|
|
|
(1.1
|
)
|
||
|
|
|
|
|
|
|||||
Other income/(loss)
|
534
|
|
|
(375
|
)
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Total net revenues
|
$
|
52,639
|
|
|
$
|
52,317
|
|
|
0.6
|
%
|
|
|
|
|
|
|
|||||
Pre-tax operating income
|
$
|
10,392
|
|
|
$
|
10,428
|
|
|
(0.3
|
)%
|
|
|
|
|
|
|
|||||
Pre-tax operating margin
|
19.7
|
%
|
|
19.9
|
%
|
|
|
|
Nine Months Ended
|
|
|
|||||||
|
September 30,
|
|
|
|||||||
|
|
|
|
|
2012
|
|||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
v2011
|
|||||
|
|
|
|
|
|
|||||
Net revenues
|
$
|
6,625
|
|
|
$
|
11,517
|
|
|
(42.5
|
)%
|
|
|
|
|
|
|
|||||
Restructuring expenses
|
11,057
|
|
|
—
|
|
|
N/M
|
|
||
Operating expenses
|
16,550
|
|
|
20,078
|
|
|
(17.6
|
)
|
||
Total non-interest expenses
|
27,607
|
|
|
20,078
|
|
|
37.5
|
%
|
||
|
|
|
|
|
|
|||||
Loss from discontinued operations before income tax expense/(benefit)
|
(20,982
|
)
|
|
(8,561
|
)
|
|
145.1
|
|
||
|
|
|
|
|
|
|||||
Income tax expense/(benefit)
|
(20,969
|
)
|
|
1,886
|
|
|
N/M
|
|
||
|
|
|
|
|
|
|||||
Loss from discontinued operations, net of tax
|
$
|
(13
|
)
|
|
$
|
(10,447
|
)
|
|
N/M
|
|
|
Level III
|
||||||
|
September 30,
|
|
December 31,
|
||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
Assets:
|
|
|
|
||||
Financial instruments and other inventory positions owned:
|
|
|
|
||||
Corporate securities:
|
|
|
|
||||
Convertible securities
|
$
|
12,461
|
|
|
$
|
—
|
|
Fixed income securities
|
—
|
|
|
2,815
|
|
||
Municipal securities:
|
|
|
|
||||
Tax-exempt securities
|
1,526
|
|
|
3,135
|
|
||
Short-term securities
|
436
|
|
|
175
|
|
||
Asset-backed securities
|
95,470
|
|
|
53,088
|
|
||
Derivative contracts
|
640
|
|
|
—
|
|
||
Total financial instruments and other inventory positions owned:
|
110,533
|
|
|
59,213
|
|
||
|
|
|
|
|
|
||
Investments
|
33,629
|
|
|
21,341
|
|
||
Total assets
|
$
|
144,162
|
|
|
$
|
80,554
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Financial instruments and other inventory positions sold, but not yet purchased:
|
|
|
|
||||
Corporate securities:
|
|
|
|
||||
Convertible securities
|
$
|
—
|
|
|
$
|
1,171
|
|
Fixed income securities
|
—
|
|
|
900
|
|
||
Derivative contracts
|
12,238
|
|
|
3,594
|
|
||
Total financial instruments and other inventory positions sold, but not yet purchased:
|
$
|
12,238
|
|
|
$
|
5,665
|
|
|
Nine Months Ended September 30,
|
||||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
Assets:
|
|
|
|
||||
Purchases
|
$
|
366,364
|
|
|
$
|
285,593
|
|
Sales
|
(330,951
|
)
|
|
(252,168
|
)
|
||
Transfers in
|
3,452
|
|
|
6,539
|
|
||
Transfers out
|
(4,529
|
)
|
|
(7,421
|
)
|
||
Realized gains/(losses)
|
22,938
|
|
|
1,929
|
|
||
Unrealized gains/(losses)
|
6,334
|
|
|
(3,075
|
)
|
||
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Purchases
|
$
|
(19,755
|
)
|
|
$
|
(8,988
|
)
|
Sales
|
1,434
|
|
|
5,454
|
|
||
Transfers in
|
—
|
|
|
3,643
|
|
||
Transfers out
|
(1,171
|
)
|
|
(3,615
|
)
|
||
Realized gains/(losses)
|
17,375
|
|
|
1,480
|
|
||
Unrealized gains/(losses)
|
8,690
|
|
|
14,228
|
|
|
|
|
|
|
Average Balance for the Three Months Ended
|
|
||||||||||||||
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
||||||||||
(Dollars in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2011
|
|
||||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash in banks
|
$
|
29,101
|
|
|
$
|
20,117
|
|
|
$
|
50,611
|
|
|
$
|
26,761
|
|
|
$
|
27,763
|
|
|
Cash in banks reserved for Credit Agreement repayment
|
11,763
|
|
|
14,240
|
|
|
11,761
|
|
|
10,690
|
|
|
7,021
|
|
|
|||||
Money market investments
|
814
|
|
|
51,450
|
|
|
38,808
|
|
|
22,505
|
|
|
18,636
|
|
|
|||||
Total cash and cash equivalents
|
$
|
41,678
|
|
|
$
|
85,807
|
|
|
$
|
101,180
|
|
(1)
|
$
|
59,956
|
|
(1)
|
$
|
53,420
|
|
(1)
|
(1)
|
Average balance calculated based upon ending daily balances.
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
|
|
|
|
||||
Total assets
|
$
|
1,960,553
|
|
|
$
|
1,655,721
|
|
Deduct: Goodwill and intangible assets
|
(247,905
|
)
|
|
(253,656
|
)
|
||
Adjusted assets
|
$
|
1,712,648
|
|
|
$
|
1,402,065
|
|
|
|
|
|
||||
Total shareholders' equity
|
$
|
770,576
|
|
|
$
|
750,600
|
|
Deduct: Goodwill and intangible assets
|
(247,905
|
)
|
|
(253,656
|
)
|
||
Tangible shareholders' equity
|
$
|
522,671
|
|
|
$
|
496,944
|
|
|
|
|
|
||||
Leverage ratio (1)
|
2.5
|
|
|
2.2
|
|
||
|
|
|
|
||||
Adjusted leverage ratio (2)
|
3.3
|
|
|
2.8
|
|
(1)
|
Leverage ratio equals total assets divided by total shareholders’ equity.
|
(2)
|
Adjusted leverage ratio equals adjusted assets divided by tangible shareholders’ equity.
|
|
|
|
Average Balance for the Three Months Ended
|
||||||||||
(Dollars in millions)
|
|
|
Sept. 30, 2012
|
|
June 30, 2012
|
|
Mar. 31, 2012
|
||||||
Funding source:
|
|
|
|
|
|
|
|
||||||
Repurchase agreements
|
|
|
$
|
71.0
|
|
|
$
|
158.5
|
|
|
$
|
114.3
|
|
Commercial paper
|
|
|
278.5
|
|
|
238.8
|
|
|
201.2
|
|
|||
Prime broker arrangement
|
|
|
154.7
|
|
|
32.1
|
|
|
5.8
|
|
|||
Short-term bank loans
|
|
|
3.5
|
|
|
40.9
|
|
|
9.7
|
|
|||
Total
|
|
|
$
|
507.7
|
|
|
$
|
470.3
|
|
|
$
|
331.0
|
|
|
Average Balance for the Three Months Ended
|
||||||||||||||
(Dollars in millions)
|
Dec. 31, 2011
|
|
Sept. 30, 2011
|
|
June 30, 2011
|
|
Mar. 31, 2011
|
||||||||
Funding source:
|
|
|
|
|
|
|
|
||||||||
Repurchase agreements
|
$
|
252.7
|
|
|
$
|
324.6
|
|
|
$
|
326.5
|
|
|
$
|
253.6
|
|
Commercial paper
|
147.1
|
|
|
125.7
|
|
|
117.9
|
|
|
112.1
|
|
||||
Prime broker arrangement
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Short-term bank loans
|
13.4
|
|
|
68.1
|
|
|
68.7
|
|
|
24.7
|
|
||||
Total
|
$
|
419.0
|
|
|
$
|
518.4
|
|
|
$
|
513.1
|
|
|
$
|
390.4
|
|
|
|
|
For the Three Months Ended
|
||||||||||
(Dollars in millions)
|
|
|
Sept. 30, 2012
|
|
June 30, 2012
|
|
Mar. 31, 2012
|
||||||
|
|
|
|
|
|
|
|
||||||
Maximum amount of daily funding
|
|
|
$
|
613.8
|
|
|
$
|
666.1
|
|
|
$
|
486.0
|
|
|
For the Three Months Ended
|
||||||||||||||
(Dollars in millions)
|
Dec. 31, 2011
|
|
Sept. 30, 2011
|
|
June 30, 2011
|
|
Mar. 31, 2011
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Maximum amount of daily funding
|
$
|
597.3
|
|
|
$
|
678.5
|
|
|
$
|
661.2
|
|
|
$
|
569.2
|
|
|
Remainder
|
|
2013
|
|
2015
|
|
2017 and
|
|
|
||||||||||
(Dollars in millions)
|
of 2012
|
|
- 2014
|
|
- 2016
|
|
thereafter
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
|
$
|
3.3
|
|
|
$
|
22.5
|
|
|
$
|
17.5
|
|
|
$
|
42.2
|
|
|
$
|
85.5
|
|
Purchase commitments
|
2.7
|
|
|
10.2
|
|
|
2.9
|
|
|
3.0
|
|
|
18.8
|
|
|||||
Investment commitments (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46.4
|
|
|||||
Loan commitments (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Bank syndicated credit agreement (c)
|
5.1
|
|
|
78.4
|
|
|
—
|
|
|
—
|
|
|
83.5
|
|
(a)
|
The investment commitments have no specified call dates; however, the investment period for these funds is through 2016. The timing of capital calls is based on market conditions and investment opportunities.
|
(b)
|
We may commit to merchant banking financing for our clients or make commitments to underwrite debt. We are unable to estimate the timing on the funding of these commitments and have no commitments outstanding at this time.
|
(c)
|
The amount outstanding under the bank syndicated credit agreement includes $25 million related to the revolving credit facility which expires on December 29, 2013.
|
|
Expiration Per Period at September 30, 2012
|
|
Total Contractual Amount
|
||||||||||||||||||||||||||||
|
Remainder
|
|
|
|
|
|
2015
|
|
2017
|
|
|
|
September 30,
|
|
December 31,
|
||||||||||||||||
(Dollars in thousands)
|
of 2012
|
|
2013
|
|
2014
|
|
- 2016
|
|
- 2018
|
|
Later
|
|
2012
|
|
2011
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Customer matched-book derivative contracts
(1) (2)
|
$
|
—
|
|
|
$
|
50,620
|
|
|
$
|
30,000
|
|
|
$
|
140,423
|
|
|
$
|
71,740
|
|
|
$
|
5,312,576
|
|
|
$
|
5,605,359
|
|
|
$
|
5,848,530
|
|
Trading securities derivative contracts
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326,250
|
|
|
326,250
|
|
|
99,750
|
|
||||||||
Credit default swap index contracts
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
144,000
|
|
|
64,650
|
|
|
—
|
|
|
208,650
|
|
|
188,000
|
|
||||||||
Private equity investment commitments
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,442
|
|
|
1,520
|
|
(1)
|
Consists of interest rate swaps. We have minimal market risk related to these matched-book derivative contracts; however, we do have counterparty risk with two major financial institutions, which is mitigated by collateral deposits. In addition, we have a limited number of counterparties (contractual amount of
$204.0 million
at
September 30, 2012
) who are not required to post collateral. Based on market movements, the uncollateralized amounts representing the fair value of the derivative contracts could become material, exposing us to the credit risk of these counterparties. At
September 30, 2012
, we had
$34.4 million
of credit exposure with these counterparties, including
$18.9 million
of credit exposure with one counterparty.
|
(2)
|
We believe the fair value of these derivative contracts is a more relevant measure of the obligations because we believe the notional or contract amount overstates the expected payout. At
September 30, 2012
and
December 31, 2011
, the net fair value of these derivative contracts approximated
$24.5 million
and
$36.0 million
, respectively.
|
(3)
|
The investment commitments have no specified call dates; however, the investment period for these funds is through 2016. The timing of capital calls is based on market conditions and investment opportunities.
|
|
September 30,
|
|
December 31,
|
||||
(Dollars in thousands)
|
2012
|
|
2011
|
||||
Interest Rate Risk
|
$
|
634
|
|
|
$
|
696
|
|
Equity Price Risk
|
1,651
|
|
|
1,005
|
|
||
Diversification Effect (1)
|
(798
|
)
|
|
(734
|
)
|
||
Total Value-at-Risk
|
$
|
1,487
|
|
|
$
|
967
|
|
(1)
|
Equals the difference between total VaR and the sum of the VaRs for the two risk categories. This effect arises because the two market risk categories are not perfectly correlated.
|
(Dollars in thousands)
|
High
|
|
Low
|
|
Average
|
||||||
For the Nine Months Ended September 30, 2012
|
|
|
|
|
|
||||||
Interest Rate Risk
|
$
|
1,273
|
|
|
$
|
369
|
|
|
$
|
783
|
|
Equity Price Risk
|
2,664
|
|
|
169
|
|
|
943
|
|
|||
Diversification Effect (1)
|
|
|
|
|
(713
|
)
|
|||||
Total Value-at-Risk
|
$
|
2,451
|
|
|
$
|
539
|
|
|
$
|
1,013
|
|
(Dollars in thousands)
|
High
|
|
Low
|
|
Average
|
||||||
For the Year Ended December 31, 2011
|
|
|
|
|
|
||||||
Interest Rate Risk
|
$
|
1,968
|
|
|
$
|
604
|
|
|
$
|
1,072
|
|
Equity Price Risk
|
1,451
|
|
|
25
|
|
|
280
|
|
|||
Diversification Effect (1)
|
|
|
|
|
(300
|
)
|
|||||
Total Value-at-Risk
|
$
|
1,889
|
|
|
$
|
589
|
|
|
$
|
1,052
|
|
(1)
|
Equals the difference between total VaR and the sum of the VaRs for the two risk categories. This effect arises because the two market risk categories are not perfectly correlated. Because high and low VaR numbers for these risk categories may have occurred on different days, high and low numbers for diversification benefit would not be meaningful.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares Yet To Be Purchased Under the Plans or Programs (1)
|
|||||||
|
|
|
|
||||||||||||
|
|
|
|
||||||||||||
|
|
|
|
||||||||||||
Month #1
|
|
|
|
|
|
|
|
|
|
||||||
(July 1, 2012 to July 31, 2012)
|
|
996
|
|
|
$
|
21.63
|
|
|
—
|
|
|
$
|
18
|
|
million
|
Month #2
|
|
|
|
|
|
|
|
|
|
||||||
(August 1, 2012 to August 31, 2012)
|
|
8,722
|
|
|
$
|
22.57
|
|
|
—
|
|
|
$
|
18
|
|
million
|
Month #3
|
|
|
|
|
|
|
|
|
|
||||||
(September 1, 2012 to September 30, 2012)
|
|
133
|
|
|
$
|
27.81
|
|
|
—
|
|
|
$
|
18
|
|
million
|
Total
|
|
9,851
|
|
|
$
|
22.54
|
|
|
—
|
|
|
$
|
18
|
|
million
|
(1)
|
On July 28, 2010, we announced that our board of directors had authorized the repurchase of up to
$75 million
of common stock through
September 30, 2012
.
|
Exhibit
Number
|
|
Description
|
Method of
Filing
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chairman and Chief Executive Officer
|
Filed herewith
|
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Filed herewith
|
|
|
|
|
32.1
|
|
Section 1350 Certifications
|
Filed herewith
|
|
|
|
|
101
|
|
Interactive data files pursuant to Rule 405 Registration S-T: (i) the Consolidated Statements of Financial Condition as of September 30, 2012 and December 31, 2011, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 and (v) the notes to the Consolidated Financial Statements.
|
Filed herewith
|
PIPER JAFFRAY COMPANIES
|
||
|
|
|
By
|
|
/s/ Andrew S. Duff
|
Its
|
|
Chairman and Chief Executive Officer
|
|
|
|
By
|
|
/s/ Debbra L. Schoneman
|
Its
|
|
Chief Financial Officer
|
Exhibit Number
|
|
Description
|
Method of Filing
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chairman and Chief Executive Officer
|
Filed herewith
|
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
Filed herewith
|
|
|
|
|
32.1
|
|
Section 1350 Certifications
|
Filed herewith
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101
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Interactive data files pursuant to Rule 405 Registration S-T: (i) the Consolidated Statements of Financial Condition as of September 30, 2012 and December 31, 2011, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2012 and 2011, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011 and (v) the notes to the Consolidated Financial Statements.
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Filed herewith
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1 Year Piper Jaffray Companies Chart |
1 Month Piper Jaffray Companies Chart |
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