Oppenheimer Holdings, Inc. · NYSE:OPY
Oppenheimer — Q3 2015 Earnings Presentation
27 slides from Oppenheimer's earnings presentation, November 2015
Slide 1: Oppenheimer Holdings Inc.
OPPENHEIMER HOLDINGS INC. NOVEMBER 2015 Presented by: Robert Lowenthal Senior Managing Director, Chairman of Management Committee Jeffrey Alfano Executive Vice President & Chief Financial Officer
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation and other written or oral statements made from time to time by representatives of Oppenheimer Holdings Inc. (the “company”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
Slide 3: About Us
ABOUT US Oppenheimer is a leading investment bank and full-service investment firm that provides financial services and advice to high net worth investors, individuals, businesses and institutions. Wealth Commercial Mortgage Capital Markets Management Banking Private client services and Investment b
Slide 4: Heritage
HERITAGE For over 130 years, we have provided investors with the necessary expertise and insight to meet the challenge of achieving their financial goals. Fahnestock Fahnestock & Co. acquires & Co. Oppenheimer Private Client Founded Fahnestock Viner & Asset Management Oppenheimer Holdings becomes li
Slide 5: Where We Operate
WHERE WE OPERATE Oppenheimer serves clients from 91 offices located throughout the United States as well as select global money centers. Seattle Minneapolis Michigan Boston Chicago New York Kansas City Pittsburgh Philadelphia Denver Baltimore San Francisco Cincinnati St. Louis Los Angeles Dallas Atl
Slide 6: Our Commitment
OUR COMMITMENT Our commitment to our clients' investment needs and our experienced and dedicated professionals empower us in our proud tradition to deliver effective and innovative solutions to our clients. Client Focus Trusted Reputation Tailored Advice Flexibility At Scale Open Architecture Herita
Slide 7: Our Industry
OUR INDUSTRY Bulge Bracket Investment Banks Foreign Money Center Banks Advisory Boutiques Full Service / Mid-Market Investment Banks Capital Markets Boutiques 7
Slide 8: What Differentiates Us
WHAT DIFFERENTIATES US Each of our business lines benefits from the dedicated, senior-level commitment of a boutique combined with the capabilities of a global, full-service investment bank. Full service Experienced professionals lead capabilities customer engagement Global distribution Top‐ranked r
Slide 9: Growth Strategy
GROWTH STRATEGY Oppenheimer is pursuing a number of initiatives to grow our client base and revenue streams, while also leveraging our operations to improve profitability. Refining operations and increasing productivity within our core businesses Developing new product offerings Adding the rig
Slide 10: Let's Look at Our Results
LET’S LOOK AT OUR RESULTS Snapshot Shareholders' Equity at 9/30/15 (‘000s) $529,777 Book-value at 9/30/15 $38.92 Tangible Book-value at 9/30/15 $26.29 Market Cap at 10/29/15 (‘000s) $258,348 Share Price at 10/29/15 $18.91 LTM Revenue 9/30/15 (‘000s) $952,953 Business Segment Results LTM September 30
Slide 11: Financial Results Continued
FINANCIAL RESULTS CONTINUED Gross Revenue ($M) $1,060 $1,040 $1,020 $1,000 $980 $960 $940 $920 $900 $880 $860 $840 2007 2008 2009 2010 2011 2012 2013 2014 LTM 3Q‐15 Net Income/(Loss) $100,000 ($ thousands) $80,000 $60,000 $40,000 $20,000 $‐ $(20,000) $(40,000) LTM 2007 2008 2009 2010 2011 2012 2013
Slide 12: Capital Structure as of September 30, 2015
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2015 Conservative Risk Profile Capital Structure ($ in thousands) September 30, 2015 Straight-forward balance sheet Total Assets: $2,854,252 Level 3 assets represent 4.1% of total assets (primarily ARS) Stockholders’ Equity: $529,777 Long-Term Debt: $150,000
Slide 13: Select Financial Measures
SELECT FINANCIAL MEASURES Pretax Margin (%) ROE 16.0% 20.0% 18.3% 13.9% 14.0% 18.0% 16.0% 12.0% 14.0% 10.0% 12.0% 8.0% 6.6% 10.0% 7.6% 6.0% 4.3% 8.0% 3.7% 6.0% 4.5% 4.8% 4.0% 1.9% 2.6% 2.2% 2.0% 4.0% 2.0% 1.7% 1.5% 2.0% 0.0% 0.0% -2.0% -0.1% -2.0% -0.7% -4.0% -4.0% -6.0% -4.0% -6.0% -4.6% 2007 2008
Slide 14: Investing in Regulatory Compliance
INVESTING IN REGULATORY COMPLIANCE Oppenheimer has spent a significant amount of time and resources to address legal, compliance & regulatory matters. Tone at the Top & Compliance Regime Purchase & development of technology Appointment of qualified leadership applications Increased staffing
Slide 15: We Continue to Address the ARS Matter
WE CONTINUE TO ADDRESS THE ARS MATTER Auction Rate Securities (“ARS”) failed in Feb. 2008 with over $330B outstanding in market Oppenheimer clients held $2.8B in Feb. 2008 Settlement with New York Attorney General and Massachusetts Securities Division in Feb. 2010 ARS purchased from clients
Slide 16: Positioned Well for a Rising Interest Rate Environment
POSITIONED WELL FOR A RISING INTEREST RATE ENVIRONMENT Cash Sweep Low interest rates have had significant Balances* ($M) impact on interest and fee revenues 9,000 8,000 7,000 Gross interest revenues down 6,000 approximately $74M annually since 5,000 2010 due to low interest rates 4,000 3,000 2,0
Slide 17: Why Oppenheimer
WHY OPPENHEIMER Oppenheimer has a strong history The firm has navigated through a difficult environment Our client assets are near all time highs Our business model is low risk and well diversified We are poised to benefit from a rising interest rate environment We are investing in our f
Slide 18: Appendix
APPENDIX (_)PPENHEIMER
Slide 19: Wealth Management Overview
WEALTH MANAGEMENT OVERVIEW Wealth Management represents Private Client and Asset Management business segments Wealth Management Services Provide a full range of products and services to Planning Services Asset Allocation clients to meet their complex and evolving Retirement Services Inve
Slide 20: Wealth Management (Continued)
WEALTH MANAGEMENT (CONTINUED) $61.2M of assets per financial advisor Assets Under Management ($B) Increase in AUM comprised of asset 30 25.3 25.9 appreciation and new assets 25 23.7 20.9 Continued focus on shift in client assets to 20 17.5 16.4 18.8 18.6 fee-based programs 15 12.5 Recent con
Slide 21: Wealth Management (Continued)
WEALTH MANAGEMENT (CONTINUED) Traditional Multi-Asset Strategies Distribution of AUM 3Q-15 ˗ Professional money management $23.7B ˗ Access to a unique selection of investment advisers subject to Other a rigorous due diligence process 9% ˗ Portfolios encompassing multiple strategies ˗ Flexible, ope
Slide 22: Capital Markets
CAPITAL MARKETS Capital Markets Revenue Breakdown Institutional Equities LTM 3Q-15 $280M ˗ Sales & Trading Public Finance ˗ Equity Research $22.9 8% ˗ Corporate Access Institutional Fixed Income Investment Institutional Banking ˗ Taxable Fixed Income $59.4 Equities 21% $131.9 ˗ Non-Taxable Fixed
Slide 23: Institutional Equities
INSTITUTIONAL EQUITIES 100+ research Premier Research, Trading and Capital Markets Solutions for professionals the Markets we serve. covering 570+ companies Global Investment & Research Equity Institutional Portfolio Marketing 100+ sales Research Sales Strategy Services professionals throughout
Slide 24: Institutional Fixed Income
INSTITUTIONAL FIXED INCOME 100 Institutional Product Capabilities Sales People and Investment 60 Traders Short Term Euro Bond High Yield Grade Credit Trading Trading Trading Trading More than $115B raised Money funds Non-U.S. Dollar U.S. Dollar Non-Investment Denominated Denominated Grad
Slide 25: Investment Banking
INVESTMENT BANKING Full-service investment banking capabilities focused on Investment Banking middle-market and emerging growth clients Engagements(1) Multi-sector, multi-product model enlarges market M&A, opportunity and diversifies the revenue stream 17% Capital Corporate and financial spons
Slide 26: Commercial Mortgage Banking
COMMERCIAL MORTGAGE BANKING Commercial Mortgage Banking segment is made up Operating Profit Margin of Oppenheimer Multifamily Housing & Healthcare Finance, Inc., a Pennsylvania corporation 45.0% 42.8% 39.5% (“OMHHF”) 40.0% 36.6% 35.0% 33.4% 33.0% The Firm owns an 83.68% controlling interest; 30.
Slide 27: Thank You For Your Time
THANK YOU FOR YOUR TIME (_)PPENHEIMER