Oppenheimer(OPY) - 2021 Q3 - Quarterly Report

Financial Performance - The Company reported a net income of $26.3 million, or $2.07 basic earnings per share, for Q3 2021, representing a 67.8% increase compared to $15.6 million, or $1.25 per share, in Q3 2020[219]. - Revenue for Q3 2021 was $315.3 million, an increase of 14.1% from $276.3 million in Q3 2020, driven by strong investment banking and advisory fees[219]. - The Capital Markets segment reported record revenue of $128.6 million for Q3 2021, a 12.5% increase from the previous year, driven by strong M&A advisory and placement fees[223]. - Advisory fee revenue increased by 32.2% in Q3 2021 due to higher AUM during the billing period compared to Q3 2020[226]. - Revenue for Q3 2021 was $26.9 million, a 30.4% increase from $20.6 million in Q3 2020[229]. - Advisory fee revenue rose by 30.3% to $26.9 million, driven by higher assets under management (AUM) during the billing period[231]. - Investment banking revenue increased by 30.4% to $82.0 million, while advisory fees surged by 68.7% to $51.8 million[236]. Assets and Equity - Client assets under administration (CAUA) reached a record $117.8 billion, up 24.9% from $94.3 billion a year ago, while assets under management (AUM) increased by 26.4% to $43.6 billion[220]. - The Company’s shareholders' equity reached a record high of $775.0 million as of September 30, 2021[222]. - AUM reached $43.6 billion, up 26.4% from $34.5 billion a year ago, with $7.7 billion from higher asset values and $1.4 billion from net contributions[231]. - Total assets increased by 6.5% from December 31, 2020, reaching $1.88 billion as of September 30, 2021[241]. Expenses - Compensation expenses for Q3 2021 were $206.3 million, an increase of 8.8% from $189.7 million in Q3 2020[220]. - Total expenses increased by 23.1% to $17.5 million, with non-compensation expenses rising by 38.4% due to higher portfolio management costs[229]. - Compensation expenses increased by 2.1% to $6.1 million, primarily due to increased production-related compensation costs[230]. Cash and Liquidity - The net increase in cash and cash equivalents for the nine months ended September 30, 2021, was $105.4 million, compared to a decrease of $47.5 million for the same period in 2020[265]. - Cash provided by operating activities for the nine months ended September 30, 2021, was $135.2 million, compared to cash used of $148.4 million in 2020[265]. - The company had a cash surrender value of $89.5 million for certain life insurance policies as of September 30, 2021, which could provide additional liquidity if needed[263]. Regulatory and Market Conditions - The Company is focused on enhancing its technology platform to support client service and compliance with industry regulations[213]. - The Federal Reserve's interest rate policies have negatively impacted earnings, with low rates affecting fees from FDIC-insured deposits[215]. - The company has made significant structural and operational changes to comply with Regulation Best Interest, which may involve increased costs[274]. - The Company has identified various factors that could cause actual results to differ materially from anticipated results, including market volatility and economic conditions[279]. - No material changes were reported regarding market risk disclosures for the nine months ended September 30, 2021, compared to the previous annual report[280]. Debt and Financing - As of September 30, 2021, the company had $72.3 million in bank call loans, down from $82.0 million at December 31, 2020[254]. - The average daily bank loan outstanding for the three months ended September 30, 2021, was $76.0 million, compared to $97.5 million for the same period in 2020[254]. - Securities loan balances totaled $286.2 million as of September 30, 2021, compared to $249.5 million at December 31, 2020[255]. - The gross balances of reverse repurchase agreements and repurchase agreements were $96.8 million and $440.7 million, respectively, as of September 30, 2021[259]. - The company's gross leverage ratio was 3.7 as of September 30, 2021[260]. - Operating lease obligations totaled $256.9 million as of September 30, 2021, with $41.8 million due in less than one year[269]. Credit Ratings - The Company received credit rating upgrades from S&P and Moody's, reflecting improved financial stability and outlook[251].