NEW
YORK, Oct. 27, 2023 /PRNewswire/ -- Oppenheimer
Holdings Inc. (NYSE: OPY) (the "Company" or "Firm") today reported
net income of $13.9 million or
$1.32 basic earnings per share for
the third quarter of 2023, an increase of approximately 206.7%,
compared with net income of $4.5
million or $0.40 basic
earnings per share for the third quarter of 2022. Revenue for the
third quarter of 2023 was $312.7
million, an increase of 6.3%, compared to revenue of
$294.1 million for the third quarter
of 2022.
Albert G. Lowenthal,
Chairman and CEO commented, "The profitable results for the
quarter reflect improved performance across many of our businesses,
owing to higher interest rates and increased market volumes
emanating from a still resilient economy. The rate of
inflation continued to stabilize, while the labor market remained
strong despite higher interest rates and labor unrest. The U.S.
economy can perhaps yet achieve a "soft landing". The stronger
economy, however, has led to a market expectation that the Federal
Reserve will maintain "higher for longer" interest rates well into
2024 which, in conjunction with continued fighting in Ukraine and the new eruption of unparalleled
violence in Israel and
Gaza, has resulted in a pullback
in most major equity indices.
Our Wealth Management business continued to benefit from
recent macroeconomic conditions, with the elevated interest rate
environment driving large increases in bank deposit sweep income
and margin interest revenue compared to the prior year period.
Higher valuations in client portfolios and the addition of new
client assets also resulted in meaningful improvements in advisory
fees, though these were offset to some extent by the stock market
retreat during the quarter and lower transaction-based fees due to
subdued client activity. Our Capital Markets business also
generated strong results, with higher fixed income sales and
trading and somewhat higher equities underwriting revenues
offsetting lower M&A advisory fees.
We finished the quarter with a strong balance sheet and ample
capital levels that will permit us to continue seeking investment
opportunities across our businesses. During the quarter, the
Company completed its previously disclosed "Dutch auction" tender
offer in which we repurchased 437,183 shares of our Class A
non-voting common stock at a price of $40.00 per share. During the quarter, the Company
also purchased 168,904 shares (2%) of our Class A non-voting common
stock at an average price of $38.30
per share in the open market under our share repurchase program.
This resulted in 10,289,233 shares of Class A non-voting common
stock remaining outstanding, resulting in book value and tangible
book value per share at record levels as of September 30,
2023."
Summary Operating Results
(Unaudited)
|
('000s, except per share amounts or otherwise
indicated)
|
Firm
|
3Q-23
|
3Q-22
|
Revenue
|
$ 312,667
|
$ 294,111
|
Compensation
Expense
|
$ 195,684
|
$ 179,134
|
Non-compensation
Expense
|
$
95,396
|
$ 107,739
|
Pre-Tax
Income
|
$
21,587
|
$
7,238
|
Income Taxes
Provision
|
$
7,808
|
$
2,573
|
Net Income
(1)
|
$
13,861
|
$
4,520
|
Earnings Per Share
(Basic) (1)
|
$
1.32
|
$
0.40
|
Earnings Per Share
(Diluted) (1)
|
$
1.21
|
$
0.37
|
Book Value Per
Share
|
$
75.01
|
$
70.23
|
Tangible Book Value Per
Share (2)
|
$
58.65
|
$
54.74
|
Private Client
|
|
|
Revenue
|
$ 193,254
|
$ 178,614
|
Pre-Tax
Income
|
$
65,249
|
$
29,973
|
Assets Under
Administration (billions)
|
$
110.7
|
$
100.3
|
Asset Management
|
|
|
Revenue
|
$
20,830
|
$
24,870
|
Pre-Tax
Income
|
$
4,951
|
$
8,322
|
Assets Under Management
(billions)
|
$
40.4
|
$
35.3
|
Capital Markets
|
|
|
Revenue
|
$
94,576
|
$
90,947
|
Pre-Tax Income
(Loss)
|
$ (15,254)
|
$
2,401
|
|
|
|
(1) Attributable to
Oppenheimer Holdings Inc
|
(2) Represents book
value less goodwill and intangible assets divided by number of
shares outstanding
|
Highlights
- Increased revenue for the third quarter of 2023 was primarily
driven by a rise in interest sensitive income, including margin
interest and bank deposit sweep income, as well as higher fixed
income sales and trading and equities underwriting revenues
- Assets under administration and under management were both at
higher levels at September 30, 2023 when compared with the
same period last year, benefiting from market appreciation and
positive net asset flows
- Non-compensation expenses decreased from the prior year quarter
largely due to lower legal costs partially offset by higher
interest expense
- The Company completed its "Dutch Auction" tender offer,
resulting in the repurchase of 437,183 shares of the Company's
Class A non-voting common stock. The Company also repurchased
168,904 shares of Class A Stock during the third quarter of 2023
under its previously announced share repurchase program, or
approximately 2% of shares outstanding at year-end 2022
- Book value and tangible book value per share reached new record
highs as a result of positive earnings and share re-purchases
Private Client
Private Client reported revenue for the current quarter of
$193.3 million, 8.2% higher when
compared with the prior year period. Pre-tax income was
$65.2 million, compared with pre-tax
income of $30.0 million in the prior
year period. Financial advisor headcount at the end of the current
quarter was 946 compared to 985 at the end of the third quarter of
2022.
('000s, except otherwise
indicated)
|
|
3Q-23
|
3Q-22
|
|
|
|
Revenue
|
$
193,254
|
$
178,614
|
Commissions
|
$
44,385
|
$
46,893
|
Advisory
Fees
|
$
82,774
|
$
78,055
|
Bank Deposit Sweep
Income
|
$
42,304
|
$
35,769
|
Interest
|
$
21,248
|
$
14,471
|
Other
|
$
2,543
|
$
3,426
|
|
|
|
Total Expenses
|
$
128,005
|
$
148,641
|
Compensation
|
$
92,383
|
$
87,555
|
Non-compensation
|
$
35,622
|
$
61,086
|
|
|
|
Pre-Tax Income
|
$
65,249
|
$
29,973
|
|
|
|
Compensation
Ratio
|
47.8 %
|
49.0 %
|
Non-compensation
Ratio
|
18.4 %
|
34.2 %
|
Pre-Tax Margin
|
33.8 %
|
16.8 %
|
|
|
|
Assets Under Administration
(billions)
|
$
110.7
|
$
100.3
|
Cash Sweep Balances (billions)
|
$
3.5
|
$
6.5
|
Revenue:
- Retail commissions were reduced compared with the prior year
quarter due to continued subdued retail trading activity
- Advisory fees increased 6.0% from a year ago primarily due to
higher AUM during the billing period for the current quarter when
compared to the third quarter of last year
- Bank deposit sweep income increased $6.5
million or 18.3% from a year ago due to higher short-term
interest rates partially offset by lower cash sweep balances
- Interest revenue increased 46.8% from a year ago due to higher
short-term interest rates
- Other revenue decreased from a year ago primarily due to lower
Company-owned life insurance death benefit proceeds
Total Expenses:
- Compensation expenses increased 5.5% from a year ago primarily
due to higher production-related expenses and deferred compensation
costs, partially offset by lower share-based compensation
expenses
- Non-compensation expenses decreased 41.7% from a year ago
primarily due to lower legal costs
Asset Management
Asset Management reported revenue for the current quarter of
$20.8 million, 16.2% lower when
compared with the prior year period. Pre-tax income was
$5.0 million, a decrease of
$3.4 million compared with the prior
year period.
('000s, except otherwise
indicated)
|
|
3Q-23
|
3Q-22
|
|
|
|
Revenue
|
$
20,830
|
$
24,870
|
Advisory
Fees
|
$
25,188
|
$
24,787
|
Other
|
$
(4,358)
|
$
83
|
|
|
|
Total Expenses
|
$
15,879
|
$
16,548
|
Compensation
|
$
5,585
|
$
6,702
|
Non-compensation
|
$
10,294
|
$
9,846
|
|
|
|
Pre-Tax Income
|
$
4,951
|
$
8,322
|
|
|
|
Compensation
Ratio
|
26.8 %
|
26.9 %
|
Non-compensation
Ratio
|
49.4 %
|
39.6 %
|
Pre-Tax Margin
|
23.8 %
|
33.5 %
|
|
|
|
AUM (billions)
|
$
40.4
|
$
35.3
|
Revenue:
- Advisory fees increased 1.6% from a year ago due to an increase
in management fees resulting from the higher net value of billable
AUM during the quarter
- Other revenue decreased $4.4
million from a year ago due to a decrease in fair value of
the positions held in private equity funds
Assets under Management (AUM):
- AUM increased to $40.4 billion at
September 30, 2023, which is the basis for advisory fee
billings for October 2023
- The increase in AUM was comprised of higher asset values of
$4.4 billion on existing client
holdings and a net contribution of $0.7
billion in new assets
Total Expenses:
- Compensation expenses were down 16.7% from a year ago which was
due to decreases in incentive compensation
- Non-compensation expenses were up 4.6% when compared to the
prior year period mostly due to higher external portfolio
management costs which are directly related to the increase in
billable AUM
Capital Markets
Capital Markets reported revenue for the current quarter of
$94.6 million, 4.0% higher when
compared with the prior year period. Pre-tax loss was
$15.3 million, compared with pre-tax
income of $2.4 million in the prior
year period.
('000s)
|
|
|
|
3Q-23
|
3Q-22
|
|
|
|
Revenue
|
$
94,576
|
$
90,947
|
|
|
|
Investment Banking
|
$
36,000
|
$
36,951
|
Advisory
Fees
|
$
18,001
|
$
29,270
|
Equities
Underwriting
|
$
15,246
|
$
5,061
|
Fixed Income
Underwriting
|
$
2,049
|
$
2,111
|
Other
|
$
704
|
$
509
|
|
|
|
Sales and Trading
|
$
58,102
|
$
53,093
|
Equities
|
$
30,985
|
$
34,877
|
Fixed
Income
|
$
27,117
|
$
18,216
|
|
|
|
Other
|
$
474
|
$
903
|
|
|
|
Total Expenses
|
$
109,830
|
$
88,546
|
Compensation
|
$
72,933
|
$
60,415
|
Non-compensation
|
$
36,897
|
$
28,131
|
|
|
|
Pre-Tax Income (Loss)
|
$
(15,254)
|
$
2,401
|
|
|
|
Compensation
Ratio
|
77.1 %
|
66.4 %
|
Non-compensation
Ratio
|
39.0 %
|
30.9 %
|
Pre-Tax Margin
|
(16.1) %
|
2.6 %
|
Revenue:
Investment Banking
- Advisory fees earned from investment banking activities
decreased 38.5% compared with a year ago due to fewer M&A
transactions
- Equities underwriting fees increased 201.2% when compared with
a year ago due to higher new issuance volumes and deal sizes
- Fixed income underwriting fees were relatively flat with the
prior year
Sales and Trading
- Equities sales and trading revenue decreased 11.2% compared
with a year ago due to reduced volumes as a result of lower market
volatility
- Fixed income sales and trading revenue increased by 48.9%
compared with a year ago primarily due to an increase in trading
income attributable to higher volatility and higher volumes
Total Expenses:
- Compensation expenses increased 20.7% compared with a year ago
primarily due to costs associated with opportunistic hiring and
increased incentive compensation
- Non-compensation expenses were 31.2% higher than a year ago
primarily due to an increase in interest expense in financing
trading inventories
Other Matters
(In millions, except number of shares and per share
amounts)
|
|
3Q-23
|
3Q-22
|
Capital
|
|
|
Stockholders' Equity
(1)
|
$ 779.3
|
$ 770.7
|
Regulatory Net Capital
(2)
|
$ 437.1
|
$ 425.8
|
Regulatory Excess Net
Capital (2)
|
$ 415.4
|
$ 399.4
|
|
|
|
Common Stock Repurchases
|
Share Repurchase Program
|
Repurchases
|
$
6.5
|
$
14.0
|
Number of
Shares
|
168,904
|
413,052
|
Average Price Per
Share
|
$ 38.30
|
$ 33.86
|
|
|
|
"Dutch Auction" Tender
Offer
|
Repurchases
|
$
17.5
|
$
—
|
Number of
Shares
|
437,183
|
—
|
Average Price Per
Share
|
$ 40.00
|
$
—
|
|
|
|
Period End Shares
|
10,388,898
|
10,974,655
|
Effective Tax Rate
|
36.2 %
|
35.5 %
|
|
|
|
(1) Attributable to Oppenheimer Holdings
Inc
|
(2) Attributable to Oppenheimer &
Co. Inc. broker-dealer
|
- The Board of Directors announced a quarterly dividend in the
amount of $0.15 per share payable on
November 24, 2023 to holders of Class
A non-voting and Class B voting common stock of record on
November 10, 2023
- Compensation expense as a percentage of revenue was higher at
62.6% during the current period versus 60.9% during the same period
last year due to opportunistic hiring and the impact of
inflation on salary levels during the year
- The effective tax rate for the current period was 36.2%
compared with 35.5% for the prior year period and was impacted by
permanent items and non-deductible losses in non-U.S.
businesses
Company Information
Oppenheimer Holdings Inc., through its operating subsidiaries,
is a leading middle market investment bank and full service
broker-dealer that is engaged in a broad range of activities in the
financial services industry, including retail securities brokerage,
institutional sales and trading, investment banking (corporate and
public finance), equity and fixed income research, market-making,
trust services, and investment advisory and asset management
services. With roots tracing back to 1881, the Company is
headquartered in New York and has
92 retail branch offices in the United
States and 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. 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, 2022 and Factors Affecting "Forward-Looking
Statements" in Part I, Item 2 in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30,
2023.
Oppenheimer Holdings Inc
|
Condensed Consolidated Income Statements
(Unaudited)
|
('000s, except number of shares and per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30,
|
|
For the Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
% Change
|
|
2023
|
|
2022
|
|
% Change
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions
|
$
83,933
|
|
$
89,608
|
|
(6.3)
|
|
$
259,174
|
|
$
282,307
|
|
(8.2)
|
|
Advisory
fees
|
107,969
|
|
102,927
|
|
4.9
|
|
310,214
|
|
326,098
|
|
(4.9)
|
|
Investment
banking
|
37,411
|
|
38,393
|
|
(2.6)
|
|
95,354
|
|
93,516
|
|
2.0
|
|
Bank deposit sweep
income
|
42,304
|
|
35,769
|
|
18.3
|
|
135,273
|
|
54,968
|
|
146.1
|
|
Interest
|
26,430
|
|
17,361
|
|
52.2
|
|
78,691
|
|
38,667
|
|
103.5
|
|
Principal transactions,
net
|
16,892
|
|
6,502
|
|
159.8
|
|
46,635
|
|
10,124
|
|
360.6
|
|
Other
|
(2,272)
|
|
3,551
|
|
*
|
|
15,195
|
|
(8,319)
|
|
*
|
|
Total
revenue
|
312,667
|
|
294,111
|
|
6.3
|
|
940,536
|
|
797,361
|
|
18.0
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
related expenses
|
195,684
|
|
179,134
|
|
9.2
|
|
589,200
|
|
543,144
|
|
8.5
|
|
Communications and
technology
|
22,590
|
|
21,500
|
|
5.1
|
|
67,813
|
|
63,981
|
|
6.0
|
|
Occupancy and equipment
costs
|
17,281
|
|
15,457
|
|
11.8
|
|
49,622
|
|
44,701
|
|
11.0
|
|
Clearing and exchange
fees
|
6,051
|
|
6,705
|
|
(9.8)
|
|
18,241
|
|
18,923
|
|
(3.6)
|
|
Interest
|
19,744
|
|
7,018
|
|
181.3
|
|
50,353
|
|
13,158
|
|
282.7
|
|
Other
|
29,730
|
|
57,059
|
|
(47.9)
|
|
136,369
|
|
98,172
|
|
38.9
|
|
Total
expenses
|
291,080
|
|
286,873
|
|
1.5
|
|
911,598
|
|
782,079
|
|
16.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-Tax Income
|
21,587
|
|
7,238
|
|
198.2
|
|
28,938
|
|
15,282
|
|
89.4
|
Income taxes
provision
|
7,808
|
|
2,573
|
|
203.5
|
|
10,262
|
|
5,559
|
|
84.6
|
Net Income
|
$
13,779
|
|
$
4,665
|
|
195.4
|
|
$
18,676
|
|
$
9,723
|
|
92.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income (loss)
attributable to
noncontrolling interest, net of tax
|
(82)
|
|
145
|
|
*
|
|
(403)
|
|
(215)
|
|
87.4
|
Net income attributable to
Oppenheimer Holdings Inc
|
$
13,861
|
|
$
4,520
|
|
206.7
|
|
$
19,079
|
|
$
9,938
|
|
92.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Oppenheimer
Holdings Inc
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.32
|
|
$
0.40
|
|
230.0
|
|
$
1.75
|
|
$
0.84
|
|
108.3
|
|
Diluted
|
$
1.21
|
|
$
0.37
|
|
227.0
|
|
$
1.62
|
|
$
0.78
|
|
107.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
10,519,431
|
|
11,270,589
|
|
(6.7)
|
|
10,874,055
|
|
11,901,727
|
|
(8.6)
|
|
Diluted
|
11,440,229
|
|
12,190,425
|
|
(6.2)
|
|
11,746,337
|
|
12,809,000
|
|
(8.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period end number of common
shares outstanding
|
10,388,898
|
|
10,974,655
|
|
(5.3)
|
|
10,388,898
|
|
10,974,655
|
|
(5.3)
|
* Percentage not meaningful
|
Media Contact:
oppenheimer@haventower.com
View original
content:https://www.prnewswire.com/news-releases/oppenheimer-holdings-inc-reports-third-quarter-2023-earnings-301969585.html
SOURCE Oppenheimer Holdings Inc.