Oppenheimer Holdings Inc. Reports Second Quarter 2024 Earnings
Oppenheimer Holdings Inc. (NYSE: OPY) reported net income of $10.3 million or $0.99 basic earnings per share for Q2 2024, compared to a net loss of $(9.4) million in Q2 2023. Revenue increased 8.0% to $330.6 million. The company benefited from strong equity markets, driving retail trading activity and AUM to new records. However, high interest rates led to a decline in FDIC sweep balances and related fees. Investment banking saw less capital market activity compared to Q1. The Private Client segment reported revenue of $208.7 million, up 3.7% year-over-year, while the Asset Management segment's revenue increased 16.3% to $25.8 million. The Capital Markets segment's revenue rose 15.8% to $92.1 million but reported a pre-tax loss of $21.8 million.
Oppenheimer Holdings Inc. (NYSE: OPY) ha riportato un utile netto di 10,3 milioni di dollari o 0,99 dollari di utile base per azione per il secondo trimestre del 2024, rispetto a una perdita netta di $(9,4) milioni nel secondo trimestre del 2023. Il fatturato è aumentato dell'8,0% a 330,6 milioni di dollari. L'azienda ha beneficiato di mercati azionari forti, che hanno stimulato l'attività di trading al dettaglio e i beni in gestione (AUM) a nuovi record. Tuttavia, i tassi d'interesse elevati hanno portato a una diminuzione dei saldi FDIC e delle relative commissioni. Le attività di investment banking hanno registrato meno attività di mercato del capitale rispetto al primo trimestre. Il segmento Clienti Privati ha riportato un fatturato di 208,7 milioni di dollari, in aumento del 3,7% rispetto all'anno precedente, mentre il fatturato del segmento Gestione degli Asset è aumentato del 16,3% a 25,8 milioni di dollari. Il fatturato del segmento Mercati di Capitale è aumentato del 15,8% a 92,1 milioni di dollari, ma ha riportato una perdita ante imposte di 21,8 milioni di dollari.
Oppenheimer Holdings Inc. (NYSE: OPY) reportó un ingreso neto de 10,3 millones de dólares o 0,99 dólares de ganancias básicas por acción para el segundo trimestre de 2024, en comparación con una pérdida neta de $(9,4) millones en el segundo trimestre de 2023. Los ingresos aumentaron un 8,0% a 330,6 millones de dólares. La compañía se benefició de fuertes mercados de acciones, lo que estimuló la actividad de trading al por menor y los activos bajo gestión (AUM) a nuevos récords. Sin embargo, las altas tasas de interés llevaron a una disminución en los saldos de barrido FDIC y tarifas relacionadas. La banca de inversión vio menos actividad de mercado de capitales en comparación con el primer trimestre. El segmento de Clientes Privados reportó ingresos de 208,7 millones de dólares, un aumento del 3,7% interanual, mientras que los ingresos del segmento de Gestión de Activos aumentaron un 16,3% a 25,8 millones de dólares. Los ingresos del segmento de Mercados de Capital aumentaron un 15,8% a 92,1 millones de dólares, pero reportaron una pérdida antes de impuestos de 21,8 millones de dólares.
오펜하이머 홀딩스 주식회사 (NYSE: OPY)는 2024년 2분기 동안 순이익 1030만 달러 또는 주당 기본 이익 0.99 달러를 보고했으며, 2023년 2분기에는 $(940만) 달러의 순손실을 기록했습니다. 수익은 8.0% 증가하여 3억 3060만 달러에 달했습니다. 회사는 강력한 주식 시장의 혜택을 받으며 소매 거래 활동과 운용 자산(AUM)에서 새로운 기록을 세웠습니다. 그러나 높은 금리는 FDIC 스윕 잔액과 관련 수수료의 감소로 이어졌습니다. 투자은행은 1분기와 비교하여 자본 시장 활동이 줄어들었습니다. 프라이빗 클라이언트 부문은 2억 870만 달러의 수익을 보고했으며, 이는 작년 대비 3.7% 증가한 수치입니다. 자산 관리 부문의 수익은 16.3% 증가하여 2580만 달러로 늘었습니다. 자본 시장 부문의 수익은 15.8% 증가하여 9210만 달러에 달했지만, 2180만 달러의 세전 손실을 기록했습니다.
Oppenheimer Holdings Inc. (NYSE: OPY) a annoncé un revenu net de 10,3 millions de dollars ou un bénéfice de base de 0,99 $ par action pour le deuxième trimestre de 2024, comparé à une perte nette de $(9,4) millions au deuxième trimestre de 2023. Le chiffre d'affaires a augmenté de 8,0 % pour atteindre 330,6 millions de dollars. L'entreprise a tiré parti des marchés boursiers solides, stimulant l'activité de trading au détail et les actifs sous gestion (AUM) à de nouveaux records. Cependant, des taux d'intérêt élevés ont entraîné une diminution des soldes de balayage FDIC et des frais liés. La banque d'investissement a vu une activité de marché des capitaux réduite par rapport au premier trimestre. Le secteur des clients privés a rapporté des revenus de 208,7 millions de dollars, en hausse de 3,7 % par rapport à l'année précédente, tandis que le secteur de la gestion d'actifs a vu son chiffre d'affaires augmenter de 16,3 % pour atteindre 25,8 millions de dollars. Le secteur des marchés de capitaux a vu son chiffre d'affaires augmenter de 15,8 % pour atteindre 92,1 millions de dollars, mais a enregistré une perte avant impôts de 21,8 millions de dollars.
Oppenheimer Holdings Inc. (NYSE: OPY) meldete einen Nettoverdienst von 10,3 Millionen Dollar oder 0,99 Dollar Grundgewinn pro Aktie für das zweite Quartal 2024, verglichen mit einem Nettoverlust von $(9,4) Millionen im zweiten Quartal 2023. Der Umsatz stieg um 8,0% auf 330,6 Millionen Dollar. Das Unternehmen profitierte von starken Aktienmärkten, was die Handelsaktivität im Einzelhandel und die verwalteten Vermögenswerte (AUM) auf neue Rekorde trieb. Hohe Zinssätze führten jedoch zu einem Rückgang der FDIC-Sweep-Salden und der damit verbundenen Gebühren. Das Investment Banking verzeichnete im Vergleich zum ersten Quartal weniger Kapitalmarktaktivitäten. Der Private Client-Sektor berichtete von Einnahmen in Höhe von 208,7 Millionen Dollar, was einem Anstieg von 3,7% im Jahresvergleich entspricht, während der Umsatz des Asset Management-Segments um 16,3% auf 25,8 Millionen Dollar stieg. Der Umsatz des Capital Markets-Segments stieg um 15,8% auf 92,1 Millionen Dollar, meldete jedoch einen Vorsteuerverlust von 21,8 Millionen Dollar.
- Net income of $10.3 million in Q2 2024, compared to a net loss in Q2 2023
- Revenue increased 8.0% year-over-year to $330.6 million
- Assets under administration and management reached record levels
- Private Client segment revenue up 3.7% to $208.7 million
- Asset Management segment revenue increased 16.3% to $25.8 million
- Capital Markets segment revenue rose 15.8% to $92.1 million
- Book value and tangible book value per share reached new record highs
- 20% increase in quarterly dividend to $0.18 per share
- Decline in FDIC sweep balances and related fees due to high interest rates
- Less capital market activity in investment banking compared to Q1
- Capital Markets segment reported a pre-tax loss of $21.8 million
- Compensation expenses increased due to higher incentive compensation and new hires
- Effective tax rate increased to 35.3% from 18.2% in the prior year period
Insights
Oppenheimer Holdings Inc.'s Q2 2024 results present a mixed picture. The company reported net income of
Key positives include:
- Record assets under administration (
$126.0 billion ) and management ($47.5 billion ) - Strong performance in the Private Client segment with a
26.6% pre-tax margin - Asset Management revenue up
16.3% year-over-year
However, there are concerns:
- Capital Markets segment reported a pre-tax loss of
$21.8 million - Compensation expenses increased significantly, rising to
66.8% of revenue - Decline in FDIC sweep balances and related fees
The
Oppenheimer's Q2 results reflect broader market trends and investor behavior. The surge in AI-related stocks has boosted market indices, benefiting Oppenheimer's asset-based revenues. However, this tech-driven rally masks underlying economic concerns.
Key observations:
- Retail trading activity increased, likely driven by the AI hype and market momentum
- High interest rates are a double-edged sword, improving interest revenue but causing a shift in client funds away from low-yield sweep accounts
- Investment banking activity remains subdued, indicating continued caution in capital markets
- The
16.5% increase in retail commissions suggests renewed retail investor enthusiasm, potentially driven by fear of missing out (FOMO) on the AI rally
The decline in financial advisor headcount (934 vs. 964 year-over-year) is concerning and may indicate challenges in advisor retention or recruitment. This could impact future growth in the Private Client segment.
The company's focus on attracting new advisors and investment banking professionals suggests a strategic push for growth, but success will depend on market conditions and the competitive landscape. The current market environment, while favorable for asset-based revenues, may prove challenging for sustained profitability if market sentiment shifts or if the AI-driven rally loses steam.
Albert G. Lowenthal, Chairman and CEO commented, "The Firm was profitable for the second quarter during a mostly favorable business environment. During the quarter, continued investor interest in artificial intelligence ("AI") stocks allowed all major indices to reach fresh records, despite continuing concerns about high interest rates and weakening employment data. Strong equity markets provided a backdrop for greater retail trading activity and drove our AUM to yet another new record, benefiting both our transaction driven revenues and AUM-based advisory fees.
The elevated interest rate environment resulted in improved interest revenue though the high interest rates also contributed to a significant decline in our FDIC sweep balances and related fees as clients sought higher returns elsewhere. The environment was also less favorable for our investment banking business, which saw less capital market activity when compared to the first quarter.
While we are somewhat disappointed in our earnings for the quarter, they were particularly impacted by the lack of follow through in underwriting revenue after a strong first quarter. We continue to believe that our investment in senior personnel will pay off in future quarters as those markets strongly re-open. Results from the Wealth Management business continue to be strong amidst the background of a very strong equity market.
The Company ended the quarter with a strong balance sheet and record book value per share levels. We remain focused on both attracting new financial advisors and retaining existing advisors while concurrently attracting qualified professionals to our investment banking platform and building our Equity and Fixed Income groups in order to position us well for growth as we move into the second half of 2024."
Summary Operating Results (Unaudited) | ||
('000s, except per share amounts or otherwise indicated) | ||
Firm | 2Q-24 | 2Q-23 |
Revenue | $ 330,589 | $ 306,189 |
Compensation Expenses | $ 220,727 | $ 187,224 |
Non-compensation Expenses | $ 93,997 | $ 130,664 |
Pre-Tax Income (Loss) | $ 15,865 | $ (11,699) |
Income Tax Provision (Benefit) | $ 5,599 | $ (2,131) |
Net Income (Loss) (1) | $ 10,266 | $ (9,400) |
Earnings Per Share (Basic) (1) | $ 0.99 | $ (0.85) |
Earnings Per Share (Diluted) (1) | $ 0.92 | $ (0.85) |
Book Value Per Share | $ 78.63 | $ 71.77 |
Tangible Book Value Per Share (2) | $ 61.56 | $ 56.29 |
Private Client | ||
Revenue | $ 208,701 | $ 201,245 |
Pre-Tax Income | $ 55,537 | $ 20,794 |
Assets Under Administration (billions) | $ 126.0 | $ 113.2 |
Asset Management | ||
Revenue | $ 25,826 | $ 22,198 |
Pre-Tax Income | $ 8,694 | $ 6,534 |
Assets Under Management (billions) | $ 47.5 | $ 41.2 |
Capital Markets | ||
Revenue | $ 92,141 | $ 79,582 |
Pre-Tax Loss | $ (21,775) | $ (14,051) |
(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 second quarter of 2024 was primarily driven by significantly higher advisory fees attributable to a rise in billable assets under management ("AUM") as well as improved investment banking and interest revenues
- Assets under administration and under management were both at record levels at June 30, 2024, benefiting from market appreciation and positive net asset flows
- Compensation expenses increased from the prior year quarter largely as a result of higher incentive compensation expenses, share-based compensation costs and production-related expenses
- Non-compensation expenses decreased from the prior year quarter primarily due to lower legal costs partially offset by higher interest expense
- Book value and tangible book value per share reached new record highs as a result of positive earnings
Private Client
Private Client reported revenue for the current quarter of
('000s, except otherwise indicated) | ||
2Q-24 | 2Q-23 | |
Revenue | ||
Commissions | ||
Advisory Fees | ||
Bank Deposit Sweep Income | ||
Interest | ||
Other | $ 8,410 | |
Total Expenses | ||
Compensation | ||
Non-compensation | ||
Pre-Tax Income | ||
Compensation Ratio | 56.3 % | 49.5 % |
Non-compensation Ratio | 17.1 % | 40.2 % |
Pre-Tax Margin | 26.6 % | 10.3 % |
Assets Under Administration (billions) | $ 126.0 | $ 113.2 |
Cash Sweep Balances (billions) | $ 2.9 | $ 3.9 |
Revenue:
- Retail commissions increased
16.5% from a year ago primarily due to higher retail trading activity - Advisory fees increased
15.4% due to higher AUM during the billing period for the current quarter when compared to the second quarter of last year - Bank deposit sweep income decreased
$9.2 million - Interest revenue decreased modestly from the prior year period due to lower stock borrow income
- Other revenue decreased from a year ago primarily due to smaller movements in the cash surrender value of Company-owned life insurance policies, which fluctuates based on changes in the fair value of the policies' underlying investments
Total Expenses:
- Compensation expenses increased
18.0% from a year ago primarily due to higher production related and share-based compensation expenses - Non-compensation expenses decreased
55.8% from a year ago primarily due to lower legal costs
Asset Management
Asset Management reported revenue for the current quarter of
('000s, except otherwise indicated) | ||
2Q-24 | 2Q-23 | |
Revenue | $ 25,826 | $ 22,198 |
Advisory Fees | $ 26,241 | $ 22,196 |
Other | $ (415) | $ 2 |
Total Expenses | $ 17,132 | $ 15,664 |
Compensation | $ 6,120 | $ 6,283 |
Non-compensation | $ 11,012 | $ 9,381 |
Pre-Tax Income | $ 8,694 | $ 6,534 |
Compensation Ratio | 23.7 % | 28.3 % |
Non-compensation Ratio | 42.6 % | 42.3 % |
Pre-Tax Margin | 33.7 % | 29.4 % |
AUM (billions) | $ 47.5 | $ 41.2 |
Revenue:
- Advisory fee revenue increased
18.2% from a year ago due to increased management fees resulting from the higher net value of billable AUM during the current quarter
Assets under Management (AUM):
- AUM increased to
$47.5 billion - The increase in AUM was comprised of higher asset values of
$6.1 billion $0.2 billion
Total Expenses:
- Compensation expenses were down
2.6% from a year ago primarily resulting from decreases in incentive compensation - Non-compensation expenses were up
17.4% when compared to the prior year period mostly due to higher external portfolio management costs which are directly related to the increase in AUM
Capital Markets
Capital Markets reported revenue for the current quarter of
('000s) | ||
2Q-24 | 2Q-23 | |
Revenue | ||
Investment Banking | ||
Advisory Fees | ||
Equities Underwriting | $ 5,478 | |
Fixed Income Underwriting | $ 2,815 | $ 1,867 |
Other | $ 386 | $ 459 |
Sales and Trading | ||
Equities | ||
Fixed Income | ||
Other | $ 676 | $ 617 |
Total Expenses | ||
Compensation | ||
Non-compensation | ||
Pre-Tax Loss | ||
Compensation Ratio | 79.5 % | 77.0 % |
Non-compensation Ratio | 44.1 % | 40.7 % |
Pre-Tax Margin | (23.6) % | (17.7) % |
Revenue:
Investment Banking
- Advisory fees earned from investment banking activities increased
12.3% compared with a year ago due to higher M&A volumes - Equity underwriting fees increased
104.6% when compared with a year ago due to higher new issuance volumes - Fixed income underwriting fees were modestly higher than the prior year period
Sales and Trading
- Equities sales and trading revenue was relatively flat when compared with the prior year period
- Fixed income sales and trading revenue increased
22.3% compared with a year ago primarily due to an increase in trading income attributable to higher interest rates and volumes
Total Expenses:
- Compensation expenses increased
19.6% compared with a year ago primarily due to costs associated with opportunistic new hires and higher incentive compensation - Non-compensation expenses were
25.5% 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) | ||
2Q-24 | 2Q-23 | |
Capital | ||
Stockholders' Equity (1) | $ 812.1 | $ 788.3 |
Regulatory Net Capital (2) | $ 460.7 | $ 417.5 |
Regulatory Excess Net Capital (2) | $ 439.7 | $ 394.7 |
Common Stock Repurchases | ||
Repurchases | $ 0.9 | $ 3.6 |
Number of Shares | 23,102 | 96,135 |
Average Price | $ 40.01 | $ 37.43 |
Period End Shares | 10,327,510 | 10,984,240 |
Effective Tax Rate | 35.3 % | 18.2 % |
(1) Attributable to Oppenheimer Holdings Inc. | ||
(2) Attributable to Oppenheimer & Co. Inc. broker-dealer | ||
- The Board of Directors announced a
$0.03 20% increase in the quarterly dividend to$0.18 - Compensation expense as a percentage of revenue was higher at
66.8% during the current period versus61.1% during the same period last year due to opportunistic new hires and increased share based compensation costs - The effective tax rate for the current period was
35.3% compared with18.2% for the prior year period. The effective tax rate for the second quarter of 2024 was negatively 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
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, 2023.
Oppenheimer Holdings Inc. | ||||||||||||
Consolidated Income Statements (Unaudited) | ||||||||||||
('000s, except number of shares and per share amounts) | ||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||
REVENUE | ||||||||||||
Commissions | $ 97,055 | $ 88,544 | 9.6 | $ 192,905 | $ 175,241 | 10.1 | ||||||
Advisory fees | 117,197 | 101,015 | 16.0 | 232,044 | 201,559 | 15.1 | ||||||
Investment banking | 29,119 | 19,978 | 45.8 | 79,656 | 57,943 | 37.5 | ||||||
Bank deposit sweep income | 34,846 | 44,060 | (20.9) | 71,531 | 92,969 | (23.1) | ||||||
Interest | 34,805 | 27,320 | 27.4 | 61,571 | 52,261 | 17.8 | ||||||
Principal transactions, net | 10,074 | 16,253 | (38.0) | 28,308 | 29,743 | (4.8) | ||||||
Other | 7,493 | 9,019 | (16.9) | 17,712 | 18,152 | (2.4) | ||||||
Total revenue | 330,589 | 306,189 | 8.0 | 683,727 | 627,868 | 8.9 | ||||||
EXPENSES | ||||||||||||
Compensation and related expenses | 220,727 | 187,224 | 17.9 | 442,440 | 393,516 | 12.4 | ||||||
Communications and technology | 24,682 | 22,783 | 8.3 | 49,258 | 45,223 | 8.9 | ||||||
Occupancy and equipment costs | 15,516 | 16,440 | (5.6) | 31,364 | 32,341 | (3.0) | ||||||
Clearing and exchange fees | 6,780 | 5,927 | 14.4 | 12,622 | 12,190 | 3.5 | ||||||
Interest | 21,980 | 17,467 | 25.8 | 42,528 | 30,609 | 38.9 | ||||||
Other | 25,039 | 68,047 | (63.2) | 52,195 | 106,639 | (51.1) | ||||||
Total expenses | 314,724 | 317,888 | (1.0) | 630,407 | 620,518 | 1.6 | ||||||
Pre-Tax Income (Loss) | 15,865 | (11,699) | * | 53,320 | 7,350 | 625.4 | ||||||
Income tax provision (benefit) | 5,599 | (2,131) | * | 17,310 | 2,454 | 605.4 | ||||||
Net Income (Loss) | $ 10,266 | $ (9,568) | * | $ 36,010 | $ 4,896 | 635.5 | ||||||
Less: Net loss attributable to non-controlling interest, net of tax | — | (168) | * | (310) | (321) | * | ||||||
Net income (loss) attributable to Oppenheimer Holdings Inc. | $ 10,266 | $ (9,400) | * | $ 36,320 | $ 5,217 | 596.2 | ||||||
Earnings (loss) per share attributable to Oppenheimer Holdings Inc. | ||||||||||||
Basic | $ 0.99 | $ (0.85) | * | $ 3.49 | $ 0.47 | 642.6 | ||||||
Diluted | $ 0.92 | $ (0.85) | * | $ 3.29 | $ 0.44 | 647.7 | ||||||
Weighted average number of common shares outstanding | ||||||||||||
Basic | 10,327,818 | 11,016,430 | (6.3) | 10,367,636 | 11,054,306 | (6.2) | ||||||
Diluted | 11,111,903 | 11,016,430 | 0.9 | 11,083,422 | 11,911,379 | (7.0) | ||||||
Period end number of common shares outstanding | 10,327,510 | 10,984,240 | (6.0) | 10,327,510 | 10,984,240 | (6.0) | ||||||
* Percentage not meaningful |
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SOURCE Oppenheimer Holdings Inc.
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